Energy services sector leads M&A transactions in May

By: G.F. Gay Le Breton and Alexander Aguilar June 14, 2022
https://bit.ly/3zDrXX0

Three Louisiana companies benefited in May from heightened M&A activity in the energy services sector as the industry moves toward monetizing energy transition.

Helix Energy Solutions Group agreed to purchase Houma-based Alliance in order to expand its decommissioning footprint and advance its environmental, social and corporate governance initiatives by supporting end-of-life requirements of oil and gas projects. Steve Williams, owner of Alliance, will receive $120 million at close in addition to a post-closing earnout consideration in return for 100% of his company. The transaction is expected to close mid-2022.

Alliance provides services to support upstream and midstream industries in the Gulf of Mexico shelf, including offshore oilfield decommissioning and reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy-lift and commercial diving services. Companies in the Alliance group include Alliance Offshore, Alliance Energy Service and Triton Offshore.

Helix, an international offshore energy services company based in Houston, is positioning itself to capture additional market share in the decommissioning industry.

“Based on a number of market and regulatory drivers and our current expectations, we fully believe that the offshore oil and gas decommissioning market will grow significantly in the near term,” said Owen Kratz, Helix’s president and CEO. “We believe this acquisition is a meaningful step in Helix’s responsible participation in this age of energy transition.”

According to Offshore Engineer, an oil and gas news site, there will be around $3 billion of expenditures put towards decommissioning between 2022 and 2025.

Also last month, New Orleans-based Paleo Data sold to PetroStrat Ltd., an international geoscience services provider based in the United Kingdom with operations in Texas. Terms of the transaction were not disclosed.

Formerly employee-owned, Paleo offers full-service biostratigraphy consulting serving the offshore Gulf of Mexico and onshore Gulf Coast. Over its 54 years of operation, Paleo developed the largest and only single-source biostratigraphy data set that covers the Gulf Coast. Available data ranges from the Jurassic through the Quaternary ages.

John Gregory, PetroStrat’s business development director, believes that the acquisition will help his company become highly involved in the future of carbon capture.

“With Louisiana likely becoming the heartland of future carbon capture usage and storage development, we see more opportunities for applying stratigraphic expertise during the energy transition,” he said.

Paleo Data will retain its office and laboratory in New Orleans, complementing PetroStrat’s existing facilities in Houston.

Lastly, believing that end users will soon desire cleaner, electric driven equipment, New Orleans-based Black Bay Energy Capital bought a majority interest in Advanced Industrial Devices (AID) from Rock Island Capital.

“Rising pressure from stakeholders is going to drive end users to shift further towards cleaner, electric driven equipment and we believe AID is uniquely positioned to capitalize on this trend,” said Matt Schovee, principal of Black Bay.

Located in Tulsa, Oklahoma, AID is a leading provider of electric motor automation and control solutions for oil and gas and industrial applications. The company’s variable frequency drive control system will enable end users to reduce operating costs, improve asset runtimes and lower carbon footprints.

Led by managing partner Michael LeBourgeois, Black Bay is a private equity group focused on the energy sector. AID will be Black Bay’s eighth current investment.

G.F. Gay Le Breton is managing director for Chaffe & Associates Inc., responsible for the merger and acquisition activities of the firm. Alexander Aguilar is a financial analyst with the firm.

Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC.