The oilfield services workers of C&J Energy Services want the oil-show to help them keep their name in any conversation about major fracking companies of the Permian Basin.
Because by the time the show begins Tuesday, regulators are expected to be close to signing off on their $2.68 billion acquisition of Nabors Industries’ completion and production arm. The deal will make Houston-Based C&J Energy Services, what began in 1997 as a casing company in South Texas, the fifth largest oilfield services company in the United States.
They look to the Permian, where their footprint remains smaller, for now, than in other booming basins such as the Eagleford.
“The Permian Basin has become a huge focus for many of our customers, we are trying to grow with them,” said Regional Manager Jared Bennett, during an interview inside their headquarters at 6913 N. FM 1788 in Midland. “We are trying to show what we can do to help them grow with the area and complete as much as they can.”
C&J joins more established players in announcing plans to expand in the Permian, a move driven by the shift to horizontal drilling. Now, about 60 percent of the drilling rigs in the region drill horizontally.
This creates wells that require bigger crews, more supplies like sand, more water, greater pressure. More everything. It means a boon for oilfield services companies.
C&J Energy’s combining with Nabors will create the largest fluid management fleet in the country, and the second-largest workover and well-servicing fleet, according to company statements. C&J will also have directional drilling services, adding that line in July.
Bennett declined to talk specifics about what the Nabors acquisition will mean for the company, citing the Securities and Exchange Commission’s ongoing review.
But they will be able to add Nabors service lines such as cementing to their completion work, fracking, coiled tubing, pressure pumping and wireline. They will absorb Nabors employees under C&J management, and while it’s unclear how many workers that involves, Bennett said they still look to hire beyond that.
The acquisition will also allow C&J to expand the reach of their service area, such as further into New Mexico, where deeper Delaware Basin offers bigger jobs to fracking companies.
COO Donald Gawick told investors in a second quarter conference call after the announcement about Nabors that the company faces a backlog in West Texas.
“It’s very significant, looking out over the next three or four months, we’ve fully covered up,” Gawick said. “And we’ve got a number of customers that are very high utilization clients. They’re hoping that we can continue to add capacity.”
Before the acquisition, the company added 80,000 horsepower, or about two frack-fleets, that increased their capacity in the Permian Basin by about 40 percent.
“The hope, and this is not going to be an easy road, is that they will be able to make better use of Nabors’ assets than Nabors has been,” said Chris Robart, a partner at PacWest Consulting Partners in Houston, which analyses the oilfield services industry. “I’m sure the answer is yes, that they will end up with a bigger presence there. For anyone in the oil services market, the Permian is the biggest source of growth in the next 3, 4, 5 years.”
Meanwhile, Nabors by spinning off its completion and production will now focus on its core drilling business.
About 30 companies in total offer services such as pressure pumping.
Regional executives of Halliburton, Schlumberger, Baker Hughes and Weatherford International have disclosed plans to grow their workforces that add up to more than a total 1,200 new employees. It’s companies like this, and other big players like the private company ProPetro, that C&J’s Permian workers want to stand alongside at the oil show.
“Putting 45,000 sets of eyeballs on C&J’s name and getting us associated with some of our larger competitors and in that same discussion is what we are shooting for,” Bennett said. “I think we’ve made a lot of headway in the past year-and-a half doing that. With our acquisition, it takes us to the fifth largest service company. So we are in that discussion. And we hope to enhance that.”
Contact Corey Paul on Twitter @OAcrude on Facebook at OA Corey Paul or call 432-333-7768.