A distressed Canadian fracking company that served operators in the Eagle Ford, San Miguel, Cardium, Viking, Utica, and Frederick Brook Shale has sold “substantially” all of its operating assets and technology.
GasFrac Energy Services Inc. (TSE: GFS) had sought protection from creditors under the Companies’ Creditors Arrangement Act and U.S. bankruptcy court in Texas. The buyer and the price it paid were not disclosed.
The transaction was court-approved. Until the sale is completed, GasFrac will continue to operate its business under the supervision of its board of directors and a court-appointed monitor.
As a company, GasFrac was using methods to fracture rock without water. But even with contracts in place, the downturn sapped its revenue stream as customers’ level of fracturing activity fell, the company said in U.S. bankruptcy filings.
In September, the company calculated its assets’ worth at about $192 million. As of Jan. 14, the company’s market cap was about $17.5 million.
About 60-70% of the company’s assets were located in Canada, and 30-40% in the U.S.
GasFrac said Jan. 15 that it employed 149 people in Canada and 46 in the U.S., with a field office in Floresville, Texas. It was headquartered in Calgary, Alberta.
The company has completed more than 2,400 fracks at more than 700 locations in Canada and the U.S.
As of September, the company reported that it had signed a new two-year contract that provided for a minimum revenue commitment with a major customer and a three-year contract renewal with another major multi-national customer. The company has contracts with Husky Energy Inc. (TSE: HSE) of Canada and BlackBrush Oil & Gas LP in South Texas.
GrasFrac worked with alternative methods of fracking. In some cases it was challenged by infrastructure, but the ultimate blow was a drop in revenue as its three major clients' activity hit the skids.
GasFrac services including fracking with LPG technology that does not require the use or disposal of water. The process uses gelled propane, butane or pentane as fracturing fluid.
In the Utica oil window, the company was able to complete hybrid fractures after water fracturing proved unworkable. Its hybrid methods involve an engineered hydrocarbon fracturing fluid that includes a portion of gelled LPG.
“Due to its relative novelty [it] has been slow to gain acceptance in the oil and gas industry,” the company said in a court document.
The company had tried to generate revenue by performing conventional fracturing but brought on more costs by securing equipment and supplies.
Recommended Reading
BP’s Kate Thomson Promoted to CFO, Joins Board
2024-02-05 - Before becoming BP’s interim CFO in September 2023, Kate Thomson served as senior vice president of finance for production and operations.
Magnolia Oil & Gas Hikes Quarterly Cash Dividend by 13%
2024-02-05 - Magnolia’s dividend will rise 13% to $0.13 per share, the company said.
TPG Adds Lebovitz as Head of Infrastructure for Climate Investing Platform
2024-02-07 - TPG Rise Climate was launched in 2021 to make investments across asset classes in climate solutions globally.
Air Products Sees $15B Hydrogen, Energy Transition Project Backlog
2024-02-07 - Pennsylvania-headquartered Air Products has eight hydrogen projects underway and is targeting an IRR of more than 10%.
HighPeak Energy Authorizes First Share Buyback Since Founding
2024-02-06 - Along with a $75 million share repurchase program, Midland Basin operator HighPeak Energy’s board also increased its quarterly dividend.