Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Keane Group Inc. (NYSE: FRAC) will up its pressure pumping services by 25% in the Permian Basin and the Bakken with a deal to buy RockPile Energy Services LLC for $284.5 million, Keane said May 18.
With the acquisition, Houston-based Keane stands to top its fleet out at 1.2 million hydraulic horsepower (HHP) while augmenting its presence in the nation’s most active shale plays, including the Permian, Bakken, Marcellus/ Utica and Scoop/Stack.
The deal continued North American pressure pumping consolidation that included the March joint venture (JV) between Schlumberger Ltd. (NYSE: SLB) and Weatherford International Plc (NYSE: WFT) to create a 2.55 million HHP juggernaut called OneStim. Barclays valued the JV at $3.8 billion.
Keane said its deal works out to about $1,000 per horsepower for 245,000 HHP and bundled wireline units after accounting for working capital and asset values.
“The acquisition of the RockPile business bolsters FRAC’s presence in both the Rockies/Bakken region as well as the Permian Basin region,” said John Daniel, senior research analyst at Piper Jaffray & Co. “Overall, we think this is a smart deal.”
Combined, Keane and RockPile would control 315,000 active horsepower in the Bakken and 415,000 active horsepower in the Permian.
“With line of sight into full utilization of our own fleet by year-end, we believe this strategic, consolidating acquisition adds even greater growth to our platform in an immediately accretive transaction and doing so at attractive economics in line with newbuild” costs, James Stewart, Keane’s chairman and CEO, said in a May 19 conference call.
RockPile’s business bears service and geographic similarities to Keane. The six-year-old company owns a fleet of 245,000 HHP as well as wireline trucks, workover rigs and cement units.
Stewart said the acquisition provides greater service density and an expanded platform that also provides Keane with further capabilities in other service offerings including cementing and workover product in the Bakken.
RockPile, based in Denver, will receive $135 million cash; Keane stock; $26.5 million for capex and adds a contingency payment of up to $20 million should Keane’s common stock price dip below $19 during a nine-month trading period.
Following the close of the transaction, Keane’s net debt will rise to about $228 million and $200 million in liquidity.
Keane executives said RockPile’s gross profit per fleet performance is in line with Keane’s expectation of up to $11 million dollars annualized gross profit per fleet by the end of the third quarter.
Keane expects the transaction to close by July.
Darren Barbee can be reached at dbarbee@hartenergy.com.
Recommended Reading
Dallas Fed Energy Survey: Permian Basin Breakeven Costs Moving Up
2024-03-28 - Breakeven costs in America’s hottest oil play continue to rise, but crude producers are still making money, according to the first-quarter Dallas Fed Energy Survey. The situation is more dire for natural gas producers.
Liberty Energy CEO: NatGas is Here to Stay as Energy Transition Lags
2024-03-27 - The energy transition hasn’t really begun given record levels of global demand for oil, natural gas and coal, Liberty Energy Chairman and CEO Chris Wright said during the DUG GAS+ Conference and Expo.
Enlight Renewable Energy Wins Funding for Serbian Wind Project
2024-03-27 - Enlight Renewable Energy said it received a $101 million loan for its second windfarm project in Serbia, which will help the country reduce its dependency on coal-fired power generation.
OEP Completes Acquisition of TechnipFMC’s Measurement Solutions Business
2024-03-27 - One Equity Partners said TechnipFMC’s measurement solutions business will be rebranded as Guidant and specialize in measurement technology, automation solutions and global systems.
PE Investors Scoop Up Offshore Services Provider Acteon Group
2024-03-27 - Acteon Group, a U.K.-based subsea services provider serving customers in offshore oil, gas and renewables, was acquired by new private equity backers.