The Houston-based Keane Group is in advanced negotiations to buy Trican Well Service’s pressure pumping business, the companies confirmed.
The talks are seen as a sign of more consolidations occurring in the struggling oil field services sector that is hit the hardest by the sharp downturn in oil prices, analysts said.
The CEO’s of both the privately held Keane Group, which is a well completion services company, and Calgary-based Trican declined comment Wednesday, citing the pending and sensitive nature of the negotiations. While Trican is Canadian, the pressure pumping business is based out of Houston.
Trican bought Denton-based Liberty Pressure Pumping for $256 million in 2007 and then moved the business to Houston. Just like all other services companies, Trican was hit by the oil slump and eliminated nearly 140 Odessa-based jobs last year.
Simmons & Company International analyst John Daniel said in a note that the Keane management has built an impressive operation in Texas’ Permian basin, as well as the Bakken and Marcellus shale plays.
“Needless to say, consolidation in the (North American) pressure pumping market is a must, and we are glad to see further signs of industry participants recognizing and acting on this need,” Daniel added.
Houston-based Tudor, Pickering, Holt & Co. said in a note that the potential deal could be a “win-win” with Trican retrenching back to its core Canadian pressure pumping market, and Keane catapulting into the “land of U.S. pressure pumping big boys.”