Berry Corp. launched a bid to acquire substantially all the assets comprising the California business lines of Basic Energy Services, a Fort Worth, Texas-based oilfield service company which voluntarily filed for Chapter 11 bankruptcy on Aug. 17.

The transaction, according to Berry Chairman and CEO Trem Smith, provides a growth opportunity for the E&P operator to play a larger role in plugging and decommissioning the significant portfolio of orphan and idle wells in California, estimated to be a $6 billion market, according to the release from the Dallas-based company.

“This is a unique opportunity to expand our role in California’s energy transition while growing bry’s business in a way that enhances our current operations and contributes a diversified revenue stream,” Smith commented in the release on Aug. 17.

Much of Basic’s California business today is known as C&J Well Services and was originally established in San Angelo, Texas, in 1948 by Frank Pool as Pool Well Services. As part of an asset purchase agreement, Berry said it made a $27 million “stalking-horse” bid to acquire Basic’s California business lines comprising Basic’s well servicing, specialized completion and remedial services, and water logistics services businesses in the Golden State.

Jack Renshaw, an industry veteran with over 35 years’ experience providing these services in California and Basic’s current senior vice president of the western division, is also set to continue to lead the business as a separate division from Berry’s E&P operations.

The potential acquisition, if closed, would be accretive to the existing Berry portfolio, focused on the development of conventional, long-lived oil reserves in the San Joaquin basin of California, plus provide additional, cost-effective in-house capabilities for well servicing, including workovers and plugging and abandonment, noted Smith.

“Having these capabilities in-house will also enable us to optimize bry’s accelerated well plugging and abandonment program, as well as our growing well workover efforts, in keeping with our environmental commitments,” he said.

Berry intends to fund the $27 million purchase price of Basic’s California business lines with cash on hand upon completion of a successful bid process.

“The California assets that bry is bidding on represent only a portion of Basic’s business and our bid price for these business lines is not a financially material investment for bry,” Smith continued in his statement. “However, given the public nature of the bankruptcy process and robust disclosures that are required, we wanted to inform bry’s shareholders of the strategic merits of this deal to bry.”

In a separate release, Basic said it had also entered into asset purchase agreements with each of Axis Energy Services Holdings LLC and Select Energy Services Inc. for the sale of its remaining assets.

Axis will acquire substantially all of Basic’s well servicing and completion and remedial segment assets outside of California. Meanwhile, Select will acquire substantially all of the company’s water logistics segment assets outside of California, including all of the assets of Agua Libre Midstream  LLC.

To facilitate the sales, Basic has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas. The transactions are being undertaken pursuant to Section 363 of the U.S. Bankruptcy Code, with Axis, Berry and Select serving as the “stalking horse” bidders in the court-supervised sale process. Accordingly, the proposed transactions are subject to higher and better offers, among other conditions, according to Basic’s press release.

“We believe the asset purchase agreements will enable us to maximize the value of our businesses and create the best path forward for our customers, partners, employees and the communities we serve,” commented Keith Schilling, president and CEO of Basic, in the release.

If other qualified bids are submitted during the court-supervised sale process, Basic said it will conduct an auction or auctions with the agreements with Axis, Berry and Select setting the floor for the auction processes.

Basic has received a commitment for $35.0 million in debtor-in-possession financing from Guggenheim Credit Services LLC. Upon court approval, this new financing, together with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the company during the court-supervised process.

Weil, Gotshal & Manges LLP is Basic’s legal counsel, Lazard is financial adviser and AlixPartners LLP is restructuring adviser.