Houston’s Nine Energy Service, Inc., one of the operators in Oklahoma’s STACK and SCOOP plays announced it has sold its Production Solutions segment in a $17 million cash deal with Brigade Energy Services LLC.
The sale includes Nine’s fleet of 107 workover rigs, ancillary equipment and real estate associated with the 13 operating facilities in the U.S. The announcement indicated the divestiture will not impact Nine’s access to historic net operating losses. The transaction closed on Aug. 31.
“We are pleased to announce the divestiture of our well services business to Brigade. Brigade’s sole focus on excellence in the well service space, coupled with the Brigade management team’s strong leadership capability, gives us comfort our team will be in good hands,” commented Nine’s President and Chief Executive Officer, Ann Fox. “This transaction makes Nine a pure-play, asset-light completions company with differentiated technology and service offerings. With the closing of the transaction, our employee base will decrease by approximately 24%, while simultaneously lowering capital expenditures. We expect this transaction to be accretive to net income, ROIC and Adjusted EBITDA margin going forward.”
Brigade’s Chief Executive Officer, Justin Bliffen, commented, “We believe this transaction solidifies Brigade as the largest privately held well services provider in the U.S., enabling us to more rapidly scale up alongside our growing customer demand, while unlocking substantial synergies and economies of scale.”
The sale also resulted in some changes in administration at Nine. Bruce Morgan, who had previously served as Nine’s President, Production Solutions will become President, Administration and Operations where he will report to David Crombie, Nine’s Chief Operating Officer and Executive Vice President.
`Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and throughout Canada.