The US Department of Justice has cleared the proposed OneStim joint venture between Weatherford and Schlumberger, designed to deliver completions products and services for unconventional plays in the US and Canada.
The joint venture will offer one of the broadest multistage completions portfolios in the market combined with one of the largest hydraulic fracturing fleets in the industry, the companies said in a release. Analysts said the joint venture will help Schlumberger compete with US hydraulic fracturing leader Halliburton and will help relieve debt from Weatherford.
Schlumberger and Weatherford will have 70/30 ownership of the OneStim joint venture, respectively. The transaction is expected to close by the end of this year. Under the agreement, Schlumberger and Weatherford will contribute all their respective North America land hydraulic fracturing pressure pumping assets, multistage completions, and pump-down perforating businesses. Weatherford will also receive a one-time $535 million cash payment from Schlumberger, which will manage the joint venture.
“The joint venture creates a new industry leader in terms of hydraulic horsepower and multistage completions technologies in North America land, which through its scale offers a cost-effective and highly competitive service delivery platform,” Schlumberger Chairman and Chief Executive Officer Paal Kibsgaard said in a statement. “OneStim is uniquely positioned to provide customers with leading operational efficiency and best-in-class hydraulic fracturing and completions technologies, while at the same time significantly improving full-cycle shareholder returns from this market.”