Completions expert Nine Energy Service Inc. is slimming down its workforce by almost one-quarter by selling its production solutions segment to cross-town operator Brigade Energy Services LLC.
The $17 million transaction includes 107 workover rigs and real estate associated with Nine’s 13 U.S. oilfield services facilities. Nine, also headquartered in Houston, mostly works in North America’s onshore with a stable of units that provide various drilling services.
“This transaction makes Nine a pure-play, asset-light completions company with differentiated technology and service offerings,” CEO Ann Fox said. “With the closing of the transaction, our employee base will decrease by approximately 24%, while simultaneously lowering capital expenditures.”
Brigade, a portfolio company of energy focused private equity Turnbridge Capital, plans to offer jobs to Nine’s workforce, said CEO Justin Bliffin.
“We believe this transaction solidifies Brigade as the largest privately held well services provider in the U.S., enabling us to more rapidly scale up alongside our growing customer demand, while unlocking substantial synergies and economies of scale,” he said.
Bruce Morgan, formerly Nine’s president of production solutions, was named president of administration and operations at Brigade. In his new role, Morgan would provide input for business and strategic planning and aid in the daily management of operations.
Nine’s decision to sell off one portion of the business would position it to have less equipment and lower costs.
During Nine’s second quarter conference call in August, Fox said the company’s larger oil-levered exploration and production customers had “remained consistent with their activity plans,” with increased activity across all service lines.
“Once again, our cementing division increased activity by approximately 1% quarter/quarter while simultaneously increasing profitability by increasing the average revenue per job by approximately 5%,” she said. The increase, she noted, came despite a 4% sequential reduction in U.S. wells drilled.
In the Permian Basin, Nine also increased its market share during the period for the second consecutive quarter.
“As a company, we increased our total stages completed by approximately 19%, despite total U.S. completions increasing by only 6%,” Fox noted. “In completion tools, we increased the number of stages completed by approximately 26%, and revenue by approximately 4% quarter/quarter.”