FTS International considering selling company stake in 2012

FTS International LLC, a hydraulic- fracturing services provider partly owned by Chesapeake Energy Corp. (CHK), is considering selling a stake of itself as early as next year.

The company, formerly known as Frac Tech Services LLC, is still looking at an initial public offering and signing joint- venture deals with companies in Argentina, Brazil, China and Saudi Arabia, Kevin McGlinch, senior vice president of finance, said in a telephone interview today.

“We are talking with several international folks about JVs, some of which have expressed interest in a piece of equity in the company,” McGlinch said. “There’s nothing imminent.”

The company, based in Cisco, Texas, with most of its operations in Fort Worth, is the fourth-largest provider of hydraulic-fracturing services based on horsepower in the U.S. this year, according to Global Hunter Securities. It uses that equipment to pump the millions of gallons of water, sand and chemicals underground needed to crack the dense rock where hydrocarbons are trapped.

Chesapeake, based in Oklahoma City, said in February it’s looking to sell some of its equity investments, including FTS.

Chesapeake, the nation’s most active oil and natural-gas operator, initially invested in the nine-year-old company in 2006, buying a 19.9 percent stake, McGlinch said. That investment now stands at 30 percent, worth $1.2 billion, according to a Dec. 5 research note from Sanford Bernstein.

Company Investors

The remainder of the company is owned by investors such as Temasek Holdings Ltd. of Singapore and Senja Capital Ltd., according to a federal filing FTS made in October in connection with a possible IPO.

It’s unknown how much of their share any of the FTS investors may sell, McGlinch said.

Reuters, citing unnamed people, earlier this week reported that Saudi Aramco, China Petroleum & Chemical Corp. and CNOOC Ltd. (883) are in talks to buy as much as 30 percent stake in FTS in a deal worth about $2.2 billion. McGlinch declined to comment on the story.