Schlumberger Dumps Fracturing Operations, Making Liberty Oilfield Services a Force in the Business
Schlumberger will be shedding its fracturing services operations in a deal with Liberty Oilfield Services in exchange for 37% of that company’s stock.
For the giant oilfield services company, the OneStim deal eliminates a line of business in a deep slump which has been a major reason for losses in its North American business. Those losses have offset profits from its international operations.
For Liberty, the all-stock deal doubles its working pressure-pumping capacity without adding any debt to the balance sheet of a company that avoids borrowing, making this the rare shale-industry merger that is welcomed by investors. Liberty shares were up more than 35% in 1 September afternoon trading, while Schlumberger was off by 1.4%.
A wild card in the deal is the union of two technology-driven fracturing operations working on innovations such as low-emissions hybrid and electric power systems, which could significantly change the power and control systems used for fracturing.
While this is a relatively small part of Schlumberger’s operation, it is a major leap for Liberty. The 9-year-old company’s rapid ascent has been fueled by a couple deals during deep downturns. In addition to the OneStim deal, Liberty’s acquisition of Sanjel in 2016 tripled its size.
Liberty’s executives said their focus is on organic growth unless they can buy a company that immediately adds to its earnings and cash flow without adding any debt. Chris Wright, chief executive officer for Liberty, said, “This is one of those opportunities. We are excited by the value this deal will create.”
Based on 2019 revenues, the combination would have $5.2 billion in revenues—making it the second-largest company in the field—with $3.2 billion of that coming from OneStim.
The 2020 total is going to be a fraction of that. Liberty’s second-quarter revenues totaled $88 million, down 81% from the same quarter the year before.
The combined company ranking may not be as high because both companies have been willing to idle equipment rather than doing jobs at money-losing rates. Wright said, “If you were in the business of fracturing, not the activity of fracturing,” business slowed considerably in early summer.
Schlumberger does not break out OneStim revenues separately, but its executives also made it clear they were going to idle equipment if the rate was too low.
As a result, the expanded operation will add 1.25 million hydraulic horsepower (HHP) of equipment working in the field, plus an equal amount that has worked in the past year which has been pulled out of service. This maintenance fleet will be used to fill in as Liberty modifies it to its standards or to provide parts, according to a Liberty presentation. They also pick up another 1 million HHP worth of old equipment that will be junked.
After the deal closes late this year, Liberty expects to be able to eliminate $125 million in corporate overhead by operating the combined company with the same business organization that ran a fracturing operation at that scale in January before the crash, said Michael Stock, chief financial officer for Liberty.
There was no mention of cutting any of the 1,000 OneStim workers still with the company. When asked about whether they would retain Schlumberger crews, Wright said they are looking forward to adding working Schlumberger crews because “they are on active (fracturing) fleets they are running, which means they are doing a good job” satisfying customers.
The effort to rapidly combine the two operations will begin in the next few weeks. Liberty management will visit each of the Schlumberger field camps to tell them about working at Liberty, including the program to increase the efficiency of its equipment and operations by “Libertizing” them, said Ron Gusek, president of Liberty.
Liberty valued the Schlumberger stake at $448 million in its announcement. That is a bit higher than the $430 million Schlumberger paid to Weatherford International in January 2018 to buy its pressure-pumping operation, which doubled its fleet.
In addition to expanding its share of the pressure-pumping business to 22%, Liberty will be picking up 60 wireline perforating units and crews, a sand mine in the Permian basin, and adding markets.
The deal will add operations in northeastern US gas-only shale plays, Alberta in western Canada, Oklahoma, and the Haynesville shale in Louisiana.
Schlumberger will also get two seats on Liberty’s board of directors and rid itself of an up-and-down business, which has been down more than up since the 2014 bust.
“This partnership provides an ideal home for our OneStim business and its employees,” said Olivier Le Peuch, chief executive officer for Schlumberger, who also pointed out the potential upside of holding Liberty shares.
To some extent, those shares will be a technology play. Their value will depend on whether Liberty can generate value in the hundreds of patents it is getting in the deal, a technology partnership with Schlumberger, and some innovations in progress.
For example, Liberty will pick up Schlumberger’s electric-powered, digitally controlled blender and hydration unit which it can marry to the electric-powered pumps it is developing for its digiFrac system, which uses gas-powered generators to power fracturing.
The new system, which Wright said will offer greater operational efficiency, is expected to be launched in 2021.
They will also be looking to apply their obsession with eliminating downtime to the plug-and-perf operations. “Wireline is the leading cause of downtime on fracturing operations,” Gusek said.
The pandemic-driven economic turmoil hit Liberty Oilfield Services hard, forcing it to drastically cut spending and lay off roughly 1,000 of its 2,400 employees.
Times are still tough, but Chris Wright, CEO of the Denver-based company, said things are looking up. Liberty has rehired many workers. Its revenue has been increasing each month since May.
And later this year, Liberty will close on its acquisition of Schlumberger’s North American hydraulic fracturing unit. In exchange for OneStim and two sand mines in Texas, Schlumberger will get a 37% stake in Liberty.
Sand is used in the hydraulic fracturing, or fracking, of oil and gas wells.
Wright said Friday that while he’s optimistic about the oil and gas industry, the deal with Schlumberger doesn’t represent “a big, bold bet” on the future.
“We think the deal is good for Liberty whether times get better, worse or stay the same,” Wright said. “There’s no cash out the door. It’s just issuing new shares. After we issue those shares, each share of stock in Liberty will effectively own more horsepower, more earnings power, more cash flow than they owned before.”
However, Wright does see signs of hope, including the rehiring of many of the employees let go when the coronavirus swept through the country and a lot of drilling slowed or stopped. Liberty’s layoffs in April were the company’s first in its nine years.
“We just simply had no choice. Demand for fracturing services dropped 85% in a two-month period, and we have to make sure the business survives so that we’re around for the long haul,” Wright said.
The company filed notice in April with the state Department of Labor and Employment that 183 workers were being let go in Adams County, where its Colorado field services are based. Since then, nearly all of Liberty’s Texas employees have been rehired, and operations have picked up in North Dakota.
But everybody in the company is still working at “meaningfully reduced compensation,” especially the top executives, Wright said.
In Colorado, operations haven’t rebounded as much because of regulatory uncertainty, Wright said. He referred to a 2019 law being implemented by state regulators that mandates an overhaul of the oil and gas rules.
Industry representatives are particularly upset with the prospect of having to locate new wells at least 2,000 feet from homes and schools. The current requirement is 1,000 feet from schools and 500 feet in some residential areas. Industry officials said bigger setbacks will increase costs and significantly limit where companies can drill.
Wright said he expects oil and gas production to remain low until the end of the year. Even before the pandemic, producers were struggling because of a glut of oil and a price war between Russia and Saudi Arabia.
“We’re not in a great place right now, but it feels a lot better to be headed the right direction,” Wright said.
“We operate in some of the most hazardous conditions in America, which is one of the biggest reasons we chose Samsara.”
Michael Tuomi, Compliance Manager
Headquartered in Denver, CO, Liberty Oilfield Services specializes in hydraulic fracturing and engineering services for exploration and production (E&P) companies in the oil and gas industry. With a diverse fleet of more than 1,250 vehicles and 2,100 drivers, Liberty operates in some of the most hazardous environments in the country.
In search of a new telematics and safety solution for their expansive fleet, Liberty prioritized a platform that could support and scale their growing business. With streamlined HOS, open API integrations, and custom idle reports, Liberty partnered with Samsara to help increase the safety, efficiency, and sustainability of their operations.
Accurate GPS trackingallows the compliance team to eliminate inaccurate IFTA reporting caused by GPS drift.
AI Dash Cams and Safety Scoreshelp protect million dollar assets on the road, identify top-performing drivers, and streamline unassigned HOS assignments using Camera ID.
Intuitive Driver Appsimplifies ELD compliance for drivers and managers, enabling Liberty to train tech-averse drivers in minutes.
Searching for a system with more accurate data
Founded in 2011, Liberty has focused on adopting new technologies to improve their high-quality services since their founding. In particular, they use big data to enhance their services and increase return on investment for their customers. So, it’s no surprise that Liberty equally values accurate data to improve their fleet division.
When they were looking to find a new provider, Liberty wanted to prioritize an agile and user-friendly system that could be easily tailored to fit the needs of the wide mix of vehicles in their fleet, ranging from traditional tractor trailers to passenger buses and flatbed sand hauling trucks.
As Liberty continues to implement Samsara across their vast fleet, we spoke with them about their reasons for selecting Samsara and their goals for the long term. Read on to learn more about Liberty’s challenges and why they ultimately decided to partner with Samsara.
Eliminating GPS drift and inaccurate IFTA reporting
With major operations in four of the nation’s largest oil-producing states—many of which are in areas with limited cell reception—one of the biggest concerns was ensuring their provider could provide reliable connectivity and data retention.
Before Samsara, Liberty’s vehicles would experience GPS drift—the difference between your actual location and the location recorded by a GPS receiver. This caused major discrepancies in their IFTA mileage reporting and wasted the compliance team’s time and resources.
“Our vehicles would log 50 miles a day without moving an inch."
During the hydraulic fracturing process, Liberty’s trucks pump water down wells at staggering speeds, causing their tractors to vibrate. Liberty wanted to ensure that their telematics system could distinguish the vibrations from a vehicle in motion. “Our vehicles would log 50 miles a day without moving an inch,” explained Liberty’s compliance manager, Michael Tuomi. “This meant that 90% of miles reported on our trucks were not legitimate because of GPS drift.”
Correcting these discrepancies not only wasted time, but also posed big challenges during inspections or audits because drivers had no gasoline documentation for the illegitimate miles. “These issues and inaccuracies could have caused us to lose our ability to operate,” said Tuomi.
Just four months since adopting Samsara, Liberty has already been able to completely eliminate mileage inaccuracies, saving their back office team hours of work per week and ensuring that they will pass audits and retain their ability to operate.
Improving driver communications and compliance with the Driver App
Before Samsara, Liberty didn’t have an easy way to communicate with drivers on the road. They were in search of a system that would be simple for drivers, while robust enough to effectively handle messaging and ELD compliance.
When Liberty crews head to a new well site, they bring up to 40 trucks at a time, 90% of which convoy together. “We wanted a system that could help us stay in contact with each other during convoys,” said Tuomi.
With the Samsara Driver App, Tuomi can easily send push notifications to drivers to communicate updates needed to keep drivers informed and safe, such as where the next gas stop will be. “The Driver App has been phenomenal,” said Tuomi. “It took me 30 seconds to teach our drivers how to use the app effectively. I can have someone who’s completely resistant to technology adopt the app seamlessly.”
Setting big safety goals in a high-risk industry
Liberty operates in many areas known for having some of the highest-fatality roads for commercial motor vehicles in the country. Despite the immense dangers of their industry and region, Liberty aims to be the safest company on the road. “We’re not going to be that stereotypical big company. We want to communicate that we care about everyone’s safety,” said Tuomi.
With such an expansive fleet, Liberty was focused on finding a dash cam solution that could help protect their drivers and assets, as well as improve driver behavior on the road. At a Samsara Safety Summit in Denver, the Liberty team got to connect one-on-one with the Samsara team for an in-depth look into Samsara’s fully integrated platform and what the partnership would provide.
In order to achieve their safety mission, Liberty selected Samsara for its dual-facing AI Dash Cams in order to gain visibility into the conditions on the road. Additionally, Liberty was excited to use dash cams to develop a safety program that would engage drivers with gamified safety scores. “Safety scores are a game changer for us in terms of driver engagement,” said Tuomi. In order to engage drivers, Lesley Williams, Health Safety and Environmental Compliance Specialist for Liberty, uses tags to organize drivers by peer groups so that they can compare themselves to other drivers in their same field, as well as drivers in other divisions.
“Our main goals are to get accurate data on driver safety so we can begin to track improvement,” said Williams. Safety scores are now used to help select which drivers to send on long convoys over 1,000 miles. This way, Liberty can be sure their safest drivers are on their most high-risk trips.
Using AI Dash Cams to protect valuable assets and streamline HOS
Because the average value of one of Liberty’s vehicles is more than $1.5 million dollars, they were also focused on finding a video solution that would protect their assets from theft and false accident claims.
“With more than 1,250 vehicles in our fleet, the ROI of Samsara AI Dash Cams was clear for us.”
Due to the large size of their trucks, it’s very difficult for large companies to defend themselves in case of an accident with smaller vehicles. “As a large company, we want to make sure we have accurate data and information in case of an accident. The added visibility from Samsara provides us with that,” said Tuomi. “With more than 1,250 vehicles in our fleet, the ROI of Samsara AI Dash Cams was clear for us.”
In addition to protecting their drivers and assets, Tuomi and Williams were also excited about using Samsara’s integrated platform to leverage both ELD and dash cams together to improve compliance.
At Liberty, drivers rarely drive the same vehicle twice, which can make it difficult to determine which drivers were in specific vehicles during certain trips. With Samsara, Williams is able to ensure that drivers are under their 14-hours of Service (HOS) and assign drivers to unassigned HOS more smoothly. By using Camera ID, Williams is able to spend less time tracking down drivers with direct visibility into the cab as well as driver suggestions for unassigned HOS.
Samsara’s AI Dash Cam features paired with accurate GPS location data give Tuomi and Williams more accurate data on which drivers were doing what and when, which adds accountability and saves them several hours of admin work per week.
Partnering for the future
With clear priorities for safety, efficiency, and simplicity, Liberty ultimately chose Samsara because it offered stellar customer service, innovative camera technology, and an intuitive platform for drivers and managers. “After we signed the contract, the service didn’t disappear,” said Tuomi.
“I believe that Samsara is a true partner for us.”
Samsara’s reliable 24/7 support team was able to deliver effective solutions to challenges that came up during implementation. “Any time we had issues that we expected to have with new technology, there was a timely response from your team with solutions,” said Williams. “I believe that Samsara is a true partner for us.”
Interested in partnering with Samsara? Learn more about the Samsara Customer Experience in this video and reach out for a free trial today.
Liberty Oilfield Services Employee Reviews
One of the best service companies out there
Service Leader (Current Employee) - Henderson, CO - September 16, 2021
Working at Liberty is challenging, but all oilfield work usually is. The schedule gives a good balance of work and home time, with a rotating 2 week day/night shift schedule. Shifts are long, typically starting at 4 AM/PM going to 6-7 PM/AM. The overtime hours pile up pretty quickly, usually between 90-100 total hours in a week. Work is mostly outside, can be physically strenuous, and requires having a CDL to drive the specialized equipment we operate to and from job sites. Managers are frequently out in the field with you, from the regional office all the way up to corporate headquarters. Your direct manager or supervisor is almost always in the field with you. Always an open-door policy with managers all the way up to the CEO. Send him a message, he will probably respond directly to you. The culture is great, there's always some fun competition between crews to see who can do the best. Comradery between all the guys on the crews is good, since you sometimes spend more time with them than your family. We take pride in our job, our equipment, and everything else we do. We want to be the best and it shows. Safety is always #1. Hardest part of the job is definitely the hours, followed by the physical labor we do rigging up and rigging down the equipment for the jobs. The most enjoyable is probably either the time off, or the work if that's your kind of thing. There's always something to learn or get dirty doing.
Great benefits, field bonuses, crews cook food in the field often, 2x2 schedule
Long shifts, sometimes have to travel, labor-intensive
Official response from Liberty Oilfield ServicesSeptember 20, 2021
Thank you for the amazing and thorough feedback! We understand the job can be challenging at times, but the effort our employees put in shows and is appreciated. We appreciate having people like you on our team!
Liberty Oilfield Services Inc LBRT:NYSE
- Day High15.43
- Day Low14.98
- Prev Close15.42
- 52 Week High17.78
- 52 Week High Date06/04/21
- 52 Week Low6.20
- 52 Week Low Date10/29/20
- Market Cap2.731B
- Shares Out180.17M
- 10 Day Average Volume1.79M
- Dividend Yield-
- YTD % Change46.75
- EPS (TTM)-1.32
- P/E (TTM)-11.52
- Fwd P/E (NTM)-303.20
- EBITDA (TTM)56.766M
- ROE (TTM)-17.88%
- Revenue (TTM)1.538B
- Gross Margin (TTM)9.23%
- Net Margin (TTM)-12.24%
- Debt To Equity (MRQ)10.56%
- Earnings Date10/26/2021
- Ex Div Date03/05/2020
- Div Amount0.05
- Split Date-
- Split Factor-
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Liberty Oilfield Services Inc
About Liberty Oilfield Services Inc
Liberty Oilfield Services Inc. is a provider of hydraulic fracturing and wireline services and related goods. The Company provides its services to onshore oil and natural gas exploration and production (E&P) companies in North America. The Company primarily provides its services in the Permian Basin, the Eagle Ford Shale, the Denver-Julesburg Basin, the Williston Basin, the San Juan Basin and the Powder River Basin. It also provides services in the Haynesville Shale, the South-Central Oklahoma Oil Province and Sooner Trend Anadarko Canadian Kingfisher, the Marcellus Shale, Utica Shale, and the Western Canadian Sedimentary Basin. The Company has approximately 30 active hydraulic fracturing fleets. The Company owns and leases properties, which include Midland, TX, Odessa, TX, Cibolo, TX, Kermit, TX, Monahans, TX, Shreveport, LA, Cheyenne, WY, Gillette, WY, Henderson, CO, Williston, ND, El Reno, OK, Red Deer, AB, Grand Prairie, AB and Huallen, AB.
Oil & Gas - Integrated
Christopher A. Wright
Chairman of the Board, Chief Executive Officer, Director
Michael David Stock
Chief Financial Officer, Treasurer
Ryan T. Gosney
Chief Accounting Officer
Raymond Sean Elliott
Vice President, General Counsel and Corporate Secretary
2.50 mean rating - 16 analysts
Revenue (MM, USD)
Price To Earnings (TTM)
Price To Sales (TTM)
Price To Book (MRQ)
Price To Cash Flow (TTM)
Total Debt To Equity (MRQ)
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- Compliance synonym
- Green villager minecraft
- Land for sale mansfield pa
- Thinknoodles roblox
- Pull plugs
- Real futuristic guns
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Liberty Oilfield Services
Getting started with the wrong CMMS
When Liberty Oilfield Services US Maintenance Manager Jack Featheringill started googling “maintenance software” in 2017, he knew exactly what he was looking for: something entirely different than the CMMS he had just cut ties with. While the first CMMS his team worked with allowed them to move away from the pen-and-paper based work order system they had outgrown some time ago, it had also introduced a host of other problems.
“It wasn’t structured for mechanics or shop work,” Jack explained to Fiix. “It was tracking parts costs just fine, but it wasn’t telling the whole story that we needed to know. If a customer wanted records, we couldn’t tell them anything beyond, ‘Well, we charged four filters to that unit.’ That’s just a fraction of what really happened. There was no failure analysis, no context, no insurance for our mechanics.”
Worse still, the system was nearly impossible to use. “It was just multiple clicks. Click, click, click, click… you’d get lost in it. There’s no way the mechanics were going to spend that much time trying to input the information that would have been of any use.”
Parts Manager Joe Netherland adds that the final straw came when he was asked to provide a review of his experience with the CMMS. “Evidently, I told the truth and they didn’t like that too much. When I turned in my review, they told me to pull it or they wouldn’t give us any more support.”
[The first CMMS we used] wasn’t structured for mechanics or shop work. It was tracking parts costs just fine, but it wasn’t telling the whole story that we needed to know.
Jack Featheringill, US Maintenance Manager
Liberty Oilfield Services
Starting over with a clean slate
Though Jack had one soured CMMS experience behind him, he decided to use it as fuel to find a better alternative. “I probably spent about three or four weeks just looking at different systems,” he explained.
“I knew right out of the gate that whatever we went with had to be easy to use, since that’s what we were missing before. The other thing was finding something that could capture all that information that we were missing, where I didn’t have to sit at a filing cabinet and thumb through hundreds of handwritten papers just trying to understand what was happening.”
From the beginning, Fiix stood out as a frontrunner as the only option that allowed Jack to try a demo version right away. “Every other company wanted me to enter in a bunch of information, which I did a time or two, but then the phone just started ringing off the hook. I appreciated that with Fiix, I could actually take the time to play around with it a bit and see if this was something I liked before I decided to talk to anyone.”
I knew right out of the gate that whatever we went with had to be easy to use, since that’s what we were missing before. The other thing was finding something that could capture all that information that we were missing.
Jack Featheringill, US Maintenance Manager
Liberty Oilfield Services
Finding the right footing with Fiix
Testing the system himself made it easy for Jack to confirm that Fiix could provide an easy-to-use, data-centric CMMS solution, but now it was time to present the software to his team. “I wanted it to be a group decision. My technicians, my maintenance managers, the parts department, all those folks were going to be the ones using it all day long, so I wanted to give everyone their chance to decide if it would work for them.”
Ultimately, it wasn’t a hard sell. “There was just so much chaos that we went through prior to this. Everyone knew this was going to make their lives easier.”
Once they came to a group consensus, they got to work implementing the system. As Jack describes it, many of the features he needed came “right out of the box”, but he was glad that Fiix was able to provide some customized features as well, including a custom widget, customized workflows, and status changes that made sense for them.
Though Jack expected a dramatic improvement over the last CMMS, he was shocked by how quickly Fiix provided the insight he needed. “We saw right away where the gaps were,” he told Fiix. Now those insights are part of his day-to-day. “The dashboard is number one in my world,” he says. “I love just having a quick overview of what’s going on in each district, what’s going on company-wide.”
The immediate benefits extended to parts and supplies as well. As Joe Netherland explains, before Fiix, there were massive amounts of missing inventory that resulted in huge quarterly spends that couldn’t be accounted for. Fiix provided an immediate solution for this, giving an opportunity for every part used to be documented. “Now, these quarterly inventories are non-events,” remarks Joe. “Our CFO just told us that the dollar figure is now so small that it’s nothing to worry about.”
The dashboard is number one in my world. I love just having a quick overview of what’s going on in each district, what’s going on company-wide.
Jack Featheringill, US Maintenance Manager
Liberty Oilfield Services
A CMMS that scales
Though the team at Liberty Oilfield Services continues to grow quickly, with over 400 employees now using Fiix across all districts, no one is worried about outgrowing the solution. “Having this system in place is a huge relief,” says Jack. “It’s a hundred and ten percent better than what we were using before, and it’s good to know that we’re finally headed in the right direction.” As for parts and supplies, Joe echoes the same sentiments. “Having Fiix feels like having an ‘easy’ button. The guys in my world love it.”
Having Fiix feels like having an ‘easy’ button. The guys in my world love it.
Joe Netherland, Parts Manager
Liberty Oilfield Services