Recently formed Kinetics Energy Services LLC has secured $100 million in startup funding and is out in the market looking for acquisition opportunities in the well completions and production enhancement sector in onshore North America.
"We really see there being some great opportunities in the market right now," CFO Alexander Somers told NGI. "Obviously, the industry is going through a difficult period right now, and we see there being some real opportunities to partner with businesses in the space and to build a completion- and production enhancement-focused platform to really provide an integrated solution for the E&P operators out there."
The company's initial focus will be on U.S. land, but Somers said there are "some interesting opportunities in Canada and Mexico as well as that country continues to open up."
Completions and production enhancement companies in unconventional production are the initial targets for acquisition. "Anything that would fall within the completion product realm," Somers said. That includes packers, sand screens, sleeves, and other downhole equipment. Kinetics also will be looking at providers of associated downhole tools and services, he said. It's not interested in companies providing big ticket items, such as coiled tubing or pressure pumping for hydraulic fracturing.
Technology that can cut costs is more important than ever with the downturn in commodity prices.
"I think any time you have a downturn like this, people are going to be looking for increased efficiencies, and there's two ways to do that. One is to look at lowering prices for services and products, and then the other is looking at technological innovation to do more with less," Somers said.
"While now is a difficult time to invest in new technologies for a lot of companies out there, I think the service companies that come up with the better mousetrap, the more efficient tool, the more efficient product will be the winners. With the lower commodity price environment that we're in, everyone needs to work to maximize the efficiency. I think it's a great opportunity for the service companies out there that can capitalize on that trend."
Kinetics' private equity financing came from Natural Gas Partners affiliate NGP Natural Resources XI, LP. Kinetics CEO is Chaden Lassoued, who previously spent two decades at Schlumberger Ltd., most recently serving as president of well intervention where he led more than 9,000 employees and had responsibility for approximately $3 billion in global revenue. Somers was previously an investment banker with Simmons & Co.