The merger is expected to create a major well completion and production services company in the US
Image: C&J Energy and Keane announce £1.44bn merger. Photo: courtesy of John R Perry/Pixabay.
C&J Energy Services has agreed to merge with rival Texas-based oilfield services provider Keane Group in an all-stock deal to create a diversified oilfield services company worth around $1.8bn (£1.44bn), which includes net debt of $255m (£203.42m).
Keane, which is headquartered in Houston, is a pure-play provider of integrated well completion services in the US. The company’s main services are horizontal and vertical fracturing, engineered solutions, wireline perforation and logging, and cementing among other value-added service offerings.
Also headquartered in Houston, C&J Energy provides well construction and intervention, well support, well completion, and other related oilfield services and technologies to oil and gas firms operating in onshore basins across the continental US.
The merger between the two entities is expected to create a major well completion and production services company in the US with increased scale and density in both services and geographies with a significant footprint in the most active basins in the country. These include the Permian, Eagle Ford, Marcellus/Utica, Rockies/Bakken, Mid-Continent and California basins.
The enlarged oilfield services provider will have 2.3 million hydraulic fracturing horsepower (HHP) made up of nearly 50 frac fleets, 158 wireline trucks, 81 pumpdown units, 364 workover rigs, 28 coiled tubing units, and 139 cementing units.
C&J Energy president and CEO Don Gawick said: “This agreement to merge C&J and Keane underscores the highly complementary nature of our two platforms and cultures. We are excited by the many strategic and financial benefits of this combination, including the opportunities for our employees from the greater scale and enhanced capabilities of the combined company.”
C&J Energy, Keane merger terms
As per the merger terms, C&J Energy shareholders will exchange each of their shares with 1.6149 shares of Keane common stock.
Post-merger, existing shareholders of both the firms, in the aggregate, will each own 50% of stake in the combined company, which will remain to be headquartered in Houston. The corporate name of the enlarged oilfield services provider will be announced before the closing of the deal.
Keane CEO Robert Drummond said: “With two strong teams, enhanced and diversified operations, a strong balance sheet, ample liquidity, attractive free cash flow and a legacy of successful R&D, the combined company will be well positioned to further invest in technology and innovation, as well as the career development of our employees to drive sustainable growth in our dynamic industry.”
The transaction, which will be subject to shareholders’ approvals of both the parties, regulatory approvals and other customary closing conditions, is likely to be completed in the fourth quarter of 2019.