The combination is an “attempt to build scale to make it through to the next cycle” with cost savings achieved by facility consolidation. “This flavor of deal is likely typical of onshore oil service deals - no cash changes hands,” as little to no earnings are being generated today by most of the oilfield services industry, noted Tudor, Pickering, Holt & Co. Industry consolidation, particularly in the hard hit oilfield services sector, has been anticipated. Once a board is elected, Archer would have two seats, with King assuming the chairmanship and Archer CFO Christoph Bausch also to be tapped. The combined company is to be led by Herndon, QES CEO Chris Baker and QES’s Keefer Lehner, vice president of Finance/Corporate Development. “As both Archer and QES have invested heavily over the past years in state-of-the-art equipment, we believe the combined company will be well positioned to take advantage of a market recovery in the North American land market.” “QES margins have consistently been industry leading, and we believe that we will be able to leverage best practices of both companies in order to improve the combined company’s performance. “We believe the current downturn provides an opportunity to combine our operations in an efficient manner and position the combined company for an increased service offering, a broader customer base and an improved cost structure,” QES management said. Combined revenue pro forma for 2014 would have been $1.149 billion with 1,200 employees. The two companies’ businesses now overlap in several geographic markets, and the combination would increase regional market share, eliminating redundant field locations and overhead costs. The combination of the two businesses would have more than 400,000 of high horsepower, or HHP, for hydraulic fracturing and acidizing services. While we will be very focused on integrating the businesses and realizing the well-defined efficiencies, we will continue to explore strategic opportunities to further enhance the platform. “As a combined platform, QES and Archer’s North American business will benefit from increased scale and a solid liquidity position. “We believe this combination represents the type of opportunistic consolidation that must occur across the oilfield services sector in order to address the challenges of the current market environment,” said QES CEO Rogers Herndon. ![]() QES was formed in 2005 by private equity firm Quintana Capital Group LP’s Quintana Energy Partners, which manages $1 billion in original capital commitments across two funds. QES, which today employs about 400 people, offers completion/production and directional drilling services. ![]() The well services entities being contributed to QES employ about 850 people. Today it has more than 7,000 employees and operates in more than 100 locations worldwide. Archer was formed in 2011 through the combination of Seawell and Allis-Chalmers Energy.
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