Schlumberger has sold its North American assets to Liberty Oilfield Services for a 37% equity interest in the Colorado-based company.
It will be the third largest well services company by North America revenue with what the companies called “supercharged technology and scale.”
The merged company had combined pro-forma revenues of $5.2 billion in 2019.
Schlumberger, with headquarters in Paris and Houston, is providing its onshore shale hydraulic fracturing business in the United States and Canada including its pressure pumping, pumpdown perforating and Permian Basin sand business with two mines.
That includes Schlumberger’s OneStim hydraulic fracturing business.
Its sudden departure from the North American shale operations came as a surprise to many and was seen as a blow to future U.S and Canada shale operations.
The merger is “a transformative step forward in our journey as a company,” said Liberty Oilfield chairman and CEO Chris Wright in a statement.
It will create an expanded technology portfolio and a breadth of operations for Liberty Oilfield, he said.
Schlumberger said the deal creates “an ideal home” for its OneStim business, said CEO Olivier Le Peuch in that statement.
The deal is expected to close in the fourth quarter 2020.
It must be approved by Liberty stockholders.
The merged company will be directed by Liberty’s current management team.
The deal comes as the O&G industry struggles to recover from the coronavirus pandemic and resulting lower demand and lower prices.
Consolidation will help the industry recover and Liberty Oilfield said it expects an industry rebound, said Wright in a statement to Reuters.
He told the media outlet that Schlumberger had approached Liberty Oilfield before the pandemic struck.
Schlumberger Limited is the No. 1 well service company in the world with 85,000 employees and operations in more than 120 countries.
It has corporate offices in Paris, Houston, London and The Hague. It had revenues of nearly $33 billion in 2019.
Source: Kallanish Energy
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