Category Archives: Oilfield Services

Baker Hughes appoints new CFO

Nancy Buese has been appointed CFO of Baker Hughes. She replaces Brian Worrell, who will stay on with the company as an advisor through Q2 2023.

The company has revenues of $21 billion and a market capitalization of $25 billion.



Baker Hughes recently announced a reorganization that would reduce its four reporting segments into two. Oilfield Services and Oilfield Equipment were combined into one while Turbomachinery & Energy Technology and Digital Solutions were combined into the other. The company expects to save $150 million as a result.

Ms. Buese was the CFO of Newmont Corporation, a Denver-based gold miner, from October 2016 until last month. Prior to that, she was the CFO at MarkWest Energy Partners for 10 years, a midstream company. When it was acquired by MPLX, a publicly-traded MLP owned by Marathon, she became the CFO of MPLX.

Ms. Buese will receive a base salary of $900,000. She will also receive a cash sign-on bonus of $2 million and an award of restricted stock units worth $5 million, that will vest over 3 years. In 2023, she will also be eligible for long-term incentive awards with a current annual target of $3.5 million.

Mr. Worrell has been the CFO of Baker Hughes since it was combined with GE’s oil and gas division in 2017 (it became independent of GE in 2019). Prior to that, he served as CFO of GE Oil and Gas between 2014 and 2017. He began with GE in 1992 and is based in London.

No details of any severance arrangements with Mr. Worrell were disclosed.

SEC filing – Baker Hughes CFO

New CFO at NCS Multistage

NCS Multistage has appointed Michael Morrison as its new CFO and Treasurer. He replaces Ryan Hummer, who has been promoted to CEO following the retirement of Robert Nipper, the founder of the company. Mr. Nipper will remain on the Board.



NCS manufactures products used in the fracking of horizontal wells. It has revenues of $135 million and a market capitalization of $65 million.

The company has its head office in NW Houston and went public in April 2017 at the $17 per share. The current share price of $26 sounds good until you realize there was a 1-for-20 reverse stock split in 2020. In other words, on a like-for-like basis, the stock has dropped from $340 at IPO to $26 now.

Mr. Morrison was, until recently, the CFO at ION Geophysical, another Houston oilfield services company.  He joined that company in 2002 and became CFO in February 2020. Ion filed for bankruptcy protection in April 2022, due to continued ongoing weakness in the seismic sector.

Mr. Morrison will receive a base salary of $325,000.

8-K filing – NCS Multistage CFO

CFO promoted to CEO at Oilfield Services company

Ryan Hummer, CFO of NCS Multistage Holdings, has been appointed CEO, effective November, 1, 2022. He replaces Robert Nipper, the company’s co-founder, who is stepping down, though Mr. Nipper will remain on the Board. The company described it as part of their normal succession planning.

The company manufactures highly engineered products used in fracking and the majority of its sales are in Canada. It has its head office in NW Houston.  The company was formed in 2006 and went public in April 2017 with an IPO stock price of $17 per share. Soon after, its market cap rose over $1 billion, before crashing in late 2019. The current market cap is $78 million.

The company is looking at both internal and external candidates to replace Mr. Hummer.

Mr. Hummer has an investment banking background and joined the company in July 2014 as VP of Corporate Development. He was later promoted to CFO in November 2016.

Mr. Hummer will receive a base salary of $450,000. That’s a considerable bump on both his previous salary as CFO ($250,000) and Mr. Nipper’s ($300,000).

SEC filing – NCS Multistage CEO

 

 

 

US Well Services to be acquired by ProFrac

US Well Services Nyx Clean Fleet® Frac Unit – patented PowerCube delivers true redundancy power to two separate electric motors and pumps.

[Update Nov 1 2022 – The deal has now closed]

US Well Services has agreed to be taken over by ProFrac in an all-stock deal that values the equity at around $93 million.

USWS, based in the Galleria, was founded in 2012 and was taken public for $274 million by a SPAC in November 2018. It currently operates five electric frac fleets and one diesel unit.



USWS also has about $265 million in debt. This includes $110 million of convertible loan notes. As part of the deal, ProFrac will issue stock worth $177 million to eliminate these notes. ProFrac also intends to refinance the remaining long-term debt.

Just last month, USWS announced leadership changes that resulted in Kyle O’Neil being promoted from CFO to CEO.

ProFrac just went public in May 2022 via a $288 million IPO. It has its head office in Willow Park, west of Fort Worth.  With the acquisition, ProFrac will leapfrog Liberty Oilfield and Nextier become the second largest pressure pumper by horsepower, behind only Halliburton.

ProFrac was founded by the Dan and Farris Wilks in 2016. Prior to that, they created Frac Tech in 2002 which the brothers sold in 2011 for $3.5 billion. Dan and Farris are not on the Board of ProFrac. However, Matt, son of Dan, is Executive Chairman, while Ladd, son of Farris, is CEO.

ProFrac, through an affiliate, already owned 13% of USWS. It acquired its stake in 2021. At the same time, ProFrac also paid $22.5 million to USWS for licenses to build three electric frac fleets. Under that agreement ProFrac also expected to pay USWS $22.5 million a year, over the next four years, for additional licenses. With the acquisition of USWS, ProFrac will no longer have to pay those additional fees.

ProFrac also expects to generate $35 million in synergies in 2023. $13 million of this will come from the elimination of duplicate corporate and field overheads, while $12 million will result from reduced repair and maintenance costs (primarily by using in-house manufacturing facilities). $5 million each will arise from supply chain synergies and reduced maintenance capex.

ProFrac also owns 23% of Flotek Industries, another struggling Houston oilfield services company.  In addition, companies affiliated with the Wilks brothers also own 7% of Nextier and 9% of ProPetro Holdings, another pressure pumper. They also took Carbo Ceramics private in March 2020.

The deal for USWS is expected to close in the fourth quarter.

Investor Presentation

Ranger Energy replaces its CFO

Ranger Energy Services has replaced its CFO, Brandon Blossman, with Melissa Cougle, effectively immediately.



Ranger went public in August 2017 at $14.50 per share, giving it a market capitalization of $215 million.  At that time, its primary business was workover rigs.  The company has since made acquisitions in wireline. It also acquired the assets of Basic Energy Services out of bankruptcy in September 2021 for $36.65 million.

Its current share price is $10.29 and the company has a market capitalization of $259 million. It has its head office in the Westchase district of Houston.

Mr Blossman was appointed CFO in June 2018 after spending many years at Tudor Pickering, an energy investment bank. He will continue to be paid for six months after his departure. Mr. Blossman will also receive accelerated vesting of 20,899 shares of restricted stock

Ms. Cougle was the CFO at Frank’s International from May 2019 until November 2021, leaving shortly after its takeover by Expro Group. Prior to that, she was CFO at National Energy Services Reunited, another Houston-based publicly-traded oilfield services company, from May 2018 to May 2019.

She will receive a base salary of $400,000. That’s considerably more than Mr. Blossman was making ($303,000).

In September 2021, the company appointed Stuart Bodden as its CEO, replacing Darron Anderson who left three months earlier.

Amazingly, it was the second time that Mr. Bodden had succeeded Mr. Anderson. Mr. Bodden joined from Express Energy where he had been CEO since 2016. He was hired at Express after Mr. Anderson left to take the job at Ranger. Express Energy was a portfolio company of Apollo Management until it was sold for a big loss in 2020.

SEC filing – Ranger appoints Cougle as CFO

Weatherford CFO is out after less than two years

Keith Jennings, CFO of Weatherford International, is out after less than two years with the company. His last day will be July 31. The company has begun an executive search for his replacement.



Weatherford filed for bankruptcy in July 2019, emerged in December 2019 and relisted its shares on Nasdaq in June 2021. At the time of the relisting, its share price was $12.81. It is now $31, giving it a market capitalization of over $2 billion.

The company still has over $2 billion in net debt, but it has had some success in moving away on high volume, low margin business. This is evidenced by its gross margin percentage of 27%  being the highest since 2011.

Mr Jennings joined from Calumet Specialty Products Partners in September 2020, where he was CFO.  Earlier in his career he spent seven years as VP and Treasurer at Cameron International, leaving a few months after its takeover by Schlumberger.

Six weeks after Mr. Jennings started, Girish Saligram was appointed CEO.

Mr. Jennings had a base salary of $500,000. He will receive a cash severance of almost $1.8 million (1.5 times base salary and target bonus, plus pro-rated bonus for 2022). In addition, according to the annual proxy filed last month, $5 million of restricted stock awarded to Mr. Jennings will also vest.

Calumet is based in Indianapolis, so Weatherford gave Mr Jennings a relocation allowance of $150,000. He also received $500,000 as a sign-on bonus.

SEC filing – Jennings departure

Leadership changes at US Well Services

US Well Services Nyx Clean Fleet® Frac Unit

Kyle O’Neil, CFO of US Well Services, has been promoted to CEO, replacing co-founder, Joel Broussard, who becomes non-executive Chairman. Josh Shapiro, currently VP of Finance, is promoted to CFO.



Poor financial performance

US Well Services is a struggling pressure pumping company that has its head office in the Galleria area of Houston.  The company was founded in 2012 and it struggled even before it was taken public for $274 million by a SPAC in November 2018. In early 2017, the company had completed an out-of-court restructuring that resulted in $118 million of debt being converted to equity.

Mr. O’Neil was appointed CFO when the business went public and joined from TCW Direct Lending, the main equity shareholder.

The company’s unique selling point was that it had patented all-electric hydraulic fracturing which uses less fuel and generates less emissions than conventional diesel fleets. At the time of going public, it had 11 fracking fleets, including two that were electric-powered. It had plans to add five more electric units.

As of May 2021, the company still had 11 fleets, though five were electric. The company has since sold off its diesel units to become a pure-play electric fracking company. It is currently building four of its next generation units and will put them into service later this year.

As of December 2021, the company had negative shareholders’ equity of $129 million and debt of $172 million. The current stock price of USWS is 91 cents. The market cap is $64 million.

In with the new…

Mr. O’Neil will receive a base salary of $540,000 and was granted 600,000 deferred stock units that will vest over three years. He also received a performance stock award worth $650,000, that vests under certain conditions.

Josh Shapiro, the new CFO, joined the company in March 2019. Prior to that, he worked at Piper Sandler as an investment banker. His new base salary will be $400,000.

…Out with the old

Mr Broussard will receive a severance of $950,000, to be paid in three instalments over the next 18 months. He also received 1.1 million restricted stock units. Half vests in 6 months, the rest in 18 months.

The company also announced that Matt Bernard had resigned as Chief Administrative Officer. Mr. Bernard was also the CFO between 2015-2018.  Mr. Bernard isn’t receiving any severance. However, he has signed a consulting agreement that will pay him $13,417 monthly. The agreement can be terminated by either party with 30 days notice.

SEC filing – management changes

 

Halliburton appoints new CFO

Halliburton has appointed Eric Carre as its new CFO. He replaces Lance Loeffler, who has been promoted to Senior VP of Middle East and North Africa.

Halliburton has revenue of $16 billion, over 40,000 employees and a market capitalization of $32 billion.



Mr. Carre is currently the Executive VP, Global Business Lines and Chief Health, Safety and Environmental Officer. He started with Halliburton in 1991 as a Project Engineer and holds a master’s degree in mechanical engineering from Université Libre de Bruxelles in Belgium.

Mr Carre’s former role, Global Business Lines, covered the Drilling & Evaluation and Completion & Production divisions as well as Landmark & Consulting, Project Management and Global Technology. Halliburton already had Executive VPs for Drilling & Evaluation (Rami Yassine) and Completion & Production (Michael Sugura) and they remain in place. It’s not clear who now has responsibility for Landmark & Consulting, Project Management and Global Technology.

Mr. Loeffler has been CFO since November 2018. He joined Halliburton in 2014 and was VP of Corporate Development and then Investor Relations before becoming the CFO. Previously he held director positions at Deutsche Bank and UBS Investment Bank.

Presumably both Mr. Carre and Mr. Loeffler are being groomed for the CEO position at some point. Current CEO Jeff Miller has been in that position since June 2017.

No compensation arrangements have been disclosed for either Mr. Carre or Mr. Loeffler.

https://www.businesswire.com/news/home/20220502005110/en/

 

Diamond Offshore to relist on NYSE

Diamond Offshore is returning as a public company. Its stock will be listed on the New York Stock Exchange from March 30 under the ticker symbol of ‘DO’.



The offshore driller, which has its head office in West Houston, owns four drillships and eight semisubmersibles. The company also manages three rigs for Aquadrill, which are currently warm stacked.

Diamond exited bankruptcy in April 2021, having converted $2 billion of debt into equity. The company put itself up for sale in August 2021, but in January it announced it would remain independent after failing to attract any satisfactory takeover offers.

Diamond expects revenues in 2022 of around $700 million, with adjusted EBITDA of approximately $60 million and capital expenditures around $57 million. The company still has net debt of $212 million, so it is projecting a negative free cash flow of $75 million. Obviously, the company believes the rising oil prices will lead to increasing rig day rates.

After exiting bankruptcy, most of the previous senior management left with large severances. CEO Marc Edwards left in April 2021 with a $6 million lump-sum cash severance. CFO Scott Kornblau and COO Ron Woll followed in September 2021 with severances of $653,000 and $876,000 respectively. That was on top of the cash bonuses they received while the company was in bankruptcy.

In October 2021, Mr. Kornblau joined Great Lakes Dredge and Dock Corporation as its new CFO.

Bernie Wolford has served as the CEO since May 2021. He is the former CEO of Pacific Drilling. Dominic Savarino was promoted to CFO from Chief Accounting Officer, having been at the company since 2017.

https://www.prnewswire.com/news-releases/diamond-offshore-announces-relisting-on-nyse-301509630.html

Exterran Corporation to be acquired for $735 million

Houston-based Exterran Corporation has agreed to be bought by Enerflex in an all-stock transaction that values the company at $735 million.

[UPDATE 10-17-22 – The deal has now been completed]



The contract combines two businesses that are primarily involved in natural gas processing and compression services, including manufacturing, service and contract operations.

Enerflex shareholders will own approximately 73% of the combined business which will continue to be run from Calgary by the Enerflex management team.

The predecessor business to Exterran was formed in 1954 as South Coast Gas Company and later operated as Hanover Compressor Company and Universal Compression. In 2007, these two businesses merged to form Exterran Holdings. In 2015, the manufacturing and international compression businesses were spun off. The spin off was named Exterran Corporation, while the US compression business was renamed Archrock.

At the time of the spin-off, Exterran shares traded at $18. Before the takeover announcement, the stock was trading at $3. The company has struggled in recent years as E&P operators cut back on capital expenditures and the company was burdened with $525 million of debt at spin-off.

Enerflex expects to achieve $40 million of annualized savings. $35 million will come from restructuring the management and corporate support teams.

Assuming the Exterran management leave after the deal closes (expected in Q2 or Q3 this year) they will receive large payouts. CEO Andrew Way is in line for a cash severance of $6.1 million (3x base plus 3x  target bonus). Accelerated vesting of options will be worth another $3.3 million.

CFO David Barta will receive $1.9 million in cash severance (2x base plus 2x target bonus). His options will be worth $0.7 million.

https://www.enerflex.com/uploads/Presentations/Investor-Presentation-Enerflex-to-Acquire-Exterran.pdf