Liberty Oilfield Services has purchased the shale fracking business of Schlumberger, in a bet on a resurgence in shale’s prospects. Reuters‘ Liz Hampton reports:
Liberty Oilfield Services’ acquisition of Schlumberger’s shale fracking business will make it the third-largest oilfield services firm by North American revenue, nudging out Baker Hughes Co (BKR.N) in a bet on a shale rebound.
Denver-based Liberty Oilfield (LBRT.N) on Tuesday agreed to swap a 37% stake in the company in exchange for Schlumberger’s North American hydraulic fracturing fleet, two Texas sand mines and other units.
The deal comes as oilfield companies have been hard-hit by the COVID-19 pandemic, which dealt a blow to fuel demand and drove shale oil and gas firms to slash drilling, cut spending and workers.
Consolidation will help the oilfield sector recover, Liberty Oilfield Chief Executive Chris Wright told Reuters.
“There are too many oil and gas companies and too many service companies. The marketplace is forcing that number to shrink,” he said.
Schlumberger, which had vowed to reduce its North American fracking presence and is undergoing a major restructuring, approached Liberty before the pandemic hit the United States, Wright said.
“We get approached all the time and most don’t seem like a good fit. This one certainly was,” he added, pointing to Schlumberger’s reputation as a technology leader.
Wright predicts fracking activity will come back, with some 200 hydraulic fracturing fleets running next year if producers keep plans to hold production flat. He declined to say how many hydraulic fracturing fleets Liberty is running, but said the number of active fleets have gone up each month since May.
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