Kern County oil producer Berry Corp. prevailed in its bid to buy a locally active oil services company whose addition nearly quadruples Berry’s payroll and positions it to compete for contracts for the State for the correct plugging of orphan and inactive wells.
C&J Well Services was owned by Fort Worth-based Basic Energy Services Inc., which last year paid around $ 94 million for its operations in California. Dallas-based Berry bought it out in Basic’s bankruptcy deal, effective Oct. 1, for around $ 43 million.
Already under Berry control, C&J will officially become a subsidiary of the oil producer by November 1 and its 910 employees – 97% of its payroll under Basic – will join Berry’s 347 employees engaged in exploration and production. oil.
C&J, which hopes to continue to serve and even expand its existing customer base, performs plugging and abandonment, drilling, well servicing and maintenance, tool rental, production and fluid logistics. It has won the Association of Energy Service Companies’ Best Business Group Safety Award for 18 of the past 20 years.
“We just plan to continue to develop our culture of safety,” said Jack Renshaw, who will continue to lead the nearly 80-year-old service company now known as C&J Well Services LLC.
Berry President, CEO and Chairman AT “Trem” Smith has stated that C&J is profitable and that its earnings will accretion to Berry’s. He pointed out that the new parent company was not expected to move C&J’s existing customers.
Smith said C&J will help Berry implement its strategy to align with California’s climate goals, primarily by plugging and abandoning orphan and inactive wells, which are major sources of carbon dioxide and methane, a particularly powerful greenhouse gas.
So far, Berry has had to contract with outside service companies to abandon its own wells.
“Now we have an internal capacity to do the same,” he said.
“More importantly,” he added, “we can make C&J Well Services work with the government to develop the market.”
Estimating California’s need for plugging and abandoning orphaned and inactive wells at $ 6 billion, Smith said other companies would likely be interested in capturing part of that market. “We just know that C&J is exceptionally good at this business,” he said.
After Basic voluntarily filed for Chapter 11 bankruptcy protection in August, Berry was named lead bidder for C&J. As of October 1, no other company had submitted a higher bid for the oil services company.
Renshaw, noting that Basic is now in the process of winding up, said: “Myself and the team are very proud to be a part of Berry.”