Baker Hughes, private equity to form land pressure pumping firm

Oil field services firm Baker Hughes Inc. (BHI), Houston private equity firm CSL Capital Management LLC, and West Street Energy Partners LP (WSEP), a fund managed by the merchant banking division of Goldman Sachs, have agreed to form a pure-play North American land pressure pumping company.

The new company, to be headquartered in Tomball, Tex., will operate under the BJ Services Co. brand and feature 1.9 million hydraulic hp and more than 240 cementers.

Under terms of the agreement, BHI will contribute its North American land cementing and hydraulic fracturing businesses, which comprise assets in the US and Canada. This includes personnel, technology, and infrastructure.

CSL Capital will contribute its Allied Energy Services LLC platform, which provides hydraulic fracturing and cementing services on land in North America.

CSL Capital and WSEP will together contribute $325 million in cash, of which $175 million will be used to strengthen the new firm’s balance sheet and position it for growth, while the remaining $150 million will go to BHI.

CSL Capital and WSEP together will own 53.3% of the new company, and BHI will retain 46.7% ownership stake.

Warren Zemlak, current president and chief executive officer of Allied Energy Services and former long-time senior executive with both Schlumberger Ltd. and Sanjel Corp., will serve as chief executive officer of BJ Services.

The agreement excludes BHI’s international pressure pumping businesses and its Gulf of Mexico offshore pressure pumping operations, which the firm will continue to operate.

BHI struck a deal for BJ Services in 2009 as it sought to expand its pressure pumping business (OGJ Online, Aug. 31, 2009).

Following its failed merger with Halliburton Co., BHI in October agreed to merge with General Electric Co.’s oil and gas division, creating an equipment, technology, and services provider with $32 billion of combined revenue and operations in more than 120 countries (OGJ Online, Oct. 31, 2016).

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