KLX Energy Services, a renowned Florida-based oilfield service provider, and Quintana Energy Services, a Texas based leader of oilfield service provider, together announced that they have inked a new definitive agreement to merge in an all-encompassing, all-stock merger.
The resulting entity would have an asset-light, industry-leading product as well as service offering across all key US onshore gas oil basins, with over $1 billion of pro forma fy-2019 revenue and over $106 million in fy-2019 adjusted EBITDA.
Tom McCaffrey, CEO and President, KLXE, stated that QES would add snubbing, directional drilling, and well control services to the company’s existing broad range of service and product lines. The company would rationalize two of its biggest fleets of coiled wireline and tubing assets. This rationalization will drastically decrease future capital expenditure requirements and would support the pull-through of the company’s asset-light services and products.
McCaffrey further added that since QES has previously disclosed the idling of the company’s frac business, KLXE aims to repurpose the pressure pumping equipment that is currently not in use to support what would be the biggest fleet of a larger diameter coiled tubing assets across North America. Moreover, the company would also repurpose some of its pressure pumping equipment in order to support the wireline fleet. This wireline fleet would be amongst the largest fleet in the United States, and also one of the biggest independent providers of the directional drilling services.
Chairman of the KLXE Board, John Collins stated that it is the company’s belief that consolidation in the oilfield market is important to stay cost-competitive, especially in an environment where oil demand and prices may remain depressed for a longer period. Both companies’ complementary cultures and operations, as well as the shared commitment towards customer satisfaction, would give them an improved ability to serve the consumers as well as create value for shareholders.
Source credit: https://www.globenewswire.com/news-release/2020/05/04/2026473/0/en/KLX-Energy-Services-and-Quintana-Energy-Services-to-Combine-in-an-All-Stock-Merger-Establishing-an-Industry-Leading-Provider-of-Asset-Light-Oilfield-Solutions-Across-the-Full-Well-.html