Calgary-based Trican Well Service Ltd. said late Tuesday it is negotiating to sell its U.S. pressure pumping business to Houston's Keane Group for an undisclosed amount.
Trican, which also is one of the largest oilfield service providers in Canada, offers an array of specialized products, equipment and services to global customers for exploring and developing oil and gas reserves. Like its peers, the current industry environment has taken a toll and the company has been working over the past year to sell underperforming assets and improve the bottom line.
"Although talks are progressing, significant terms and conditions are still under negotiation," management said of the Keane negotiations. "Accordingly, there can be no guarantee that the company will conclude this transaction. Further, the timing of completion of any such transaction remains uncertain. Based upon the terms and conditions currently being discussed, management believes the offered price represents fair value for this business and that the sale of this business would be in the best interest of shareholders if acceptable terms and conditions can be negotiated."
No financial details were disclosed.
During a third quarter conference call in November, Trican management said the final two fracturing crews in Texas had been parked, leaving it with only six of its 16 U.S. pressure pumping units still in operation. U.S. operations in 3Q2015 suffered an adjusted operating loss of C$13.7 million, versus operating profits of C$19.6 million in 3Q2014. Pricing fell 30% from peak prices at the end of 2014.
Trican CFO Mike Baldwin said revenue from the U.S. operations decreased 62% year/year during 3Q2015 because of a "significant decrease in customer activity in all areas, but most notably in oil-producing regions." U.S. revenue per job declined during the period by 48% year/year, and the job count decreased by 24%.
Trican last year also suspended its international operations in Australia, Algeria, Saudi Arabia and Colombia, leaving only completion tools businesses in Norway and Russia. In August it sold its Russian pressure pumping business to a unit of OAO Rosneft.
Keane started as a family drilling rig services business in 1973. Today it has 300,000 hp of pressure pumping capacity with offices in Texas, Pennsylvania and North Dakota. In 2010 the privately held company built its first fracture fleet and began work in the Marcellus Shale. It has since started up additional fracture fleets and added crews in the Marcellus, the Bakken Shale and the Permian Basin.
Keane also has been building its onshore portfolio. Three years ago it purchased Canada's Calmena Wireline Co. and the wireline technologies of Calmena Energy Services. In 2013 Keane also acquired the assets of Permian operator Ultra Tech Frac Services LLC, based in Midland, TX.