STEP Energy Services Ltd. announces U.S. coiled tubing acquisition
by CM Staff
The Acquisition solidifies STEP as a provider of deep capacity coiled tubing services, with a background in the Permian Basin and other oil and gas producing areas.
CALGARY — STEP Energy Services Ltd. announces that its U.S. subsidiary, STEP Energy Services (USA) Ltd., has acquired four ultradeep capacity coiled tubing units, ancillary equipment along with the divisional leadership and operational personnel from ProPetro Holding Corp., a Permian Basin energy services company, for approximately $17.2 million CAD. The Acquisition solidifies STEP as a provider of deep capacity coiled tubing services, with a background in the Permian Basin and other oil and gas producing areas in the southern U.S.
The ProPetro coiled tubing units are among the deepest capacity units in service in the U.S. today, capable of handling 30,000 feet of 2-3/8” and 2-5/8” strings of coiled tubing. The units were manufactured within the last four years. Three units are currently crewed and active with leading Permian E&P companies while the fourth requires minor capital upgrades prior to deployment, which is expected in 2023.
In addition to the four ultradeep coiled tubing units, the Acquisition includes a large fleet of support equipment including fracturing pumps, twin fluid pumpers, nitrogen pumpers and transports, cranes, tractors, and other miscellaneous equipment and inventory. The fracturing horsepower is required to support the fluid pumping requirements for the ultradeep capacity coiled tubing units. Similarly, the nitrogen pumpers are primarily used to support coiled tubing operations but can also be used in fracturing or industrial service applications.
“We have tremendous respect for the coiled tubing business that the ProPetro team has built,” said Mr. Steve Glanville, STEP’s President and Chief Operating Officer. “Lateral lengths in the Permian continue to increase and these four units, along with the highly skilled team of professionals who operate the equipment, build on STEP’s ability to service this market segment. Furthermore, the outlook for the coiled tubing market is improving rapidly as smaller competitors are consolidated and pricing moves higher. We are excited about how this acquisition will drive higher returns from our U.S. division.”
The Acquisition was funded by a combination of $2.77 million (USD) in cash and the issuance of 2,616,460 STEP common shares at a deemed price of $5.204 per share, calculated using the 30 day volume weighted average price of STEP common shares ending August 26, 2022.
STEP also announced on Sep. 2 that Mr. Regan Davis, STEP’s chief executive officer, will retire as CEO of STEP effective September 30, 2022. Steve Glanville, STEP’s current President and Chief Operating Officer will assume the President and CEO role and replace Mr. Davis as an executive director on STEP’s board.