(Bloomberg) –Liberty Oilfield Services Inc., which will become North America’s second-biggest fracing provider with the acquisition of a Schlumberger unit, expects to one day topple Halliburton Co. from the No. 1 spot.
“Customer demand has told us to grow at this pace, and then deals like this come to us,” Liberty CEO Chris Wright said in an interview after the deal was announced on Tuesday. “Our goal with this acquisition is to keep getting better, but to the extent we succeed at that, it probably leads to us being the leader sometime down the road.”
Less than three years ago, the Denver contractor didn’t even crack the top ten for its frac-fleet size. Now in its ninth year of business, Liberty is growing its presence within a business that is severely shrinking: Three-fourths of U.S. frac crews have been sidelined this year, according to Primary Vision Inc.
Wright said he’s not concerned to see rivals like Schlumberger, Baker Hughes Co. and Weatherford International Plc exiting the fracing business.
“When you do a lot of business lines — and those are all good companies — it’s harder to be truly fantastic,” said Wright, a Massachusetts Institute of Technology-trained electrical engineer. “I liken what’s gone on with the shale revolution to the dot-com revolution.”
Liberty agreed to buy Schlumberger’s OneStim fracing business in exchange for a 37% stake in the company. Beyond the growth of its traditional frac fleet, Wright said a hidden gem in the deal is getting Schlumberger’s electric blender technology that mixes the water, sand and frac chemicals prior to being pumped downhole. He aims to pair the electric blenders with his company’s two-year effort to develop the next generation in frac pumps that work off electricity, rather than diesel.
But Wright said building new electric pumps in a market already oversupplied with diesel-powered frac gear won’t be easy. His company already has plans to scrap about 1 million horsepower of frac pumps it just bought from Schlumberger.
“We’ll only build new, next-generation fleets with partnerships with customers,” he said. “I’m pretty confident we will have that out next year.”
