Liberty Oilfield Services (NYSE:LBRT) aims to become the largest provider of hydraulic fracturing services, replacing Halliburton (NYSE:HAL) at the top, the company's chief executive told Bloomberg in an interview.
"Customer demand has told us to grow at this pace, and then deals like this come to us," Chris Wright said. "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."
Schlumberger agreed to sell Liberty Oilfield its U.S. fracking business earlier this week in exchange for a minority stake of 37 percent in the resulting larger company.
"The last several months have been extremely challenging for the world, the industry and the Liberty family. These times also bring opportunity. This transaction will be a transformative step forward in our journey as a company," said Liberty's chairman and CEO Chris Wright.
Schlumberger's CEO Olivier Le Peuch said: "This partnership provides an ideal home for our OneStim business and its employees and is in line with our capital stewardship strategy while benefiting from future market upside through our equity stake."
U.S. operations were the main contributor to Schlumberger's second-quarter loss, which was its second in a row amid the crisis created by the oil price crash and the coronavirus pandemic. U.S. shale oil was particularly hard hit by the crisis, with many drillers forced to shut in production or fold altogether. Analysts expect dozens more bankruptcies in the industry this year as oil remains too cheap for many producers to break even.
Yet some, like Liberty Oilfield, are banking on the return of the shale boom. The company has grown quickly, taking advantage of the crisis that has created many opportunities for it.
"When you do a lot of business lines -- and those are all good companies -- it's harder to be truly fantastic," Wright told Bloomberg. "I liken what's gone on with the shale revolution to the dot-com revolution."
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More