Sanjel Corp., the privately held oil-field services company, is being broken up and sold to two rivals under a court-supervised process for undisclosed sums, it said on Monday.
Calgary-based Sanjel said STEP Energy Services, owned by private-equity firm ARC Financial Corp., is buying the Canadian hydraulic fracturing, coiled tubing and well-cementing business.
Meanwhile, Denver-based Liberty Oilfield Services is acquiring Sanjel's U.S. business. Liberty operates in the Williston, DJ and Powder River basins in the United States.
In a statement, the company offered few details of the transactions, such as price and terms. A Sanjel executive was not immediately available for comment. Officials from STEP and Liberty said they could provide little other information until the deals close following the court process.
Calgary-based Sanjel's breakup comes as the energy-services sector reels from the effects of the oil-price collapse, which has led exploration and production companies to slash spending on operations such as drilling and other development activities.
Little has been written about Sanjel's inner workings over the years, but a filing for a debt issue in 2014 shed some light on the company's finances.
It was founded in 1982 by Don MacDonald, the company's chairman. Two years ago it ran offices in Calgary, Houston, Denver, Dubai and Mexico City, and employed 4,100 people. His son, Darin MacDonald, had been the company's president and chief executive. The two had equal financial control over the family's holdings, which included energy businesses, real estate assets and capital and technology units.
In fiscal 2014 – before the energy industry downturn – it had revenue of $1.4-billion, making it third among well-cementing and pressure pumping firms behind Trican Well Service Ltd. and Calfrac Well Services Ltd. Both of those companies have undergone major cost-cutting and job cuts to cope with the severe drop in business over the past year and a half.
Sanjel said on Monday that it obtained an initial order from an Alberta court under the Companies' Creditors Arrangement Act to help with the closing of the deals. PriceWaterhouseCoopers has been appointed monitor of the Sanjel assets during the process, it said.
The company said it expects to keep operating during the CCAA proceedings.