KLX Energy Services To Merge with Quintana Energy Services
The merged companies will offer large-diameter coiled-tubing, directional drilling, snubbing, wireline services, and pressure pumping services.
KLX Energy Services Holdings is set to merge with Quintana Energy Services (QES) in an all-stock merger transaction; the new company will be known as KLXE.
KLXE is set to offer large-diameter coiled-tubing assets, with an asset-light product and service offering in all major US onshore oil-and-gas basins.
The transaction agreement—in which KLXE will own 59%, and Quintana Energy shareholders will own 41% of the equity—is expected to generate annualized cost synergies of at least $40 million within the first year. The merger is expected to close in the second half of 2020.
KLX Energy Services has been a US onshore provider of oilfield services focused on completion, intervention, and production activities.
QES has been a provider of diversified oilfield services to onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all active major basins throughout the US. QES's primary services include directional drilling, snubbing, coiled tubing, wireline services, and pressure pumping.
As QES had previously announced the idling of its capital-intensive fracturing business, the new company will repurpose most pressure-pumping equipment to support its coiled-tubing assets and the wireline fleet.
“We will be rationalizing two of the largest fleets of coiled tubing and wireline assets, which will dramatically reduce future capital spending requirements and which will facilitate the pull-through of KLXE’s asset-light products and services,” said Tom McCaffrey, member of the board of directors of the combined company.
The new company’s President and CEO Chris Baker added, “Our downhole motor technology, vertical integration, and in-house machining capacity within QES’s drilling segment will serve to reduce KLXE’s downhole tool costs and will allow for cross-pollination of motor and tool technologies.”.
KLXE board member Tom McCaffrey said, “QES will add directional drilling, snubbing, and well control services to KLXE’s already broad range of product and service lines.
The combined company will provide large-diameter coiled-tubing services with 24 large-diameter coiled-tubing spreads. It will also operate one of the largest US wireline fleets with more than 130 wireline units.
QES will add 36 rig-assisted snubbing units to KLXE’s completion and production service. It will also contribute its directional drilling franchise with 117 measurement-while-drilling kits.
KLXE will close its corporate headquarters in Wellington, Florida, and the companies will combine their Houston offices to serve as the new corporate headquarters.