C&J Energy Services Third Quarter 2017 Results

C&J Energy Services, Inc. (“C&J” or the “Company”) (NYSE: CJ) announced its financial and operating results for the third quarter ended September 30, 2017.

Third Quarter 2017 Financial Highlights

C&J Energy Services grew revenue 13.5% to $442.7 million for the third quarter of 2017, from $390.1 million in the second quarter of 2017, primarily driven by continued improvement in our Completion Services segment.  Third quarter 2017 revenue increased 90.4% from $232.5 million in the third quarter of 2016.  During the third quarter, we experienced strong activity levels that resulted in higher utilization and pricing in our Completion Services segment, most notably in our wireline and pumping, coiled tubing and cementing services businesses.

For the third quarter of 2017, C&J Energy Services reported net income of $10.5 million, or $0.17 per diluted share.  This compared to a net loss of $(12.7) million, or $(0.20) per diluted share, for the second quarter of 2017, and a net loss of $(106.4) million, or $(0.90) per diluted share, for the third quarter of 2016.  Net loss in the second quarter of 2017 included $7.9 million after-tax, or $0.13 per diluted share, of restructuring expenses associated with the Chapter 11 proceeding that C&J Energy Services successfully completed on January 6, 2017, and $4.1 million after-tax, or $0.07 per diluted share, of costs associated with previously divested businesses and the winding down of our international coiled tubing business in the Middle East.  Net loss in the third quarter of 2016 included $34.1 million after-tax, or $0.29 per diluted share, of restructuring expenses associated with the Chapter 11 proceeding, $6.9 million after-tax, or $0.06 per diluted share, of debt restructuring costs associated with C&J Energy Services previous capital structure and $6.1 million, or $0.05 per diluted share, of severance, facility closure and other costs.

 

Acquisition of O-Tex

On October 25, 2017, we entered into a definitive agreement to acquire O-Tex Holdings, Inc., including O-Tex Pumping, L.L.C. and other operating subsidiaries, (“O-Tex”).  Under the terms of the agreement, we will acquire all of the outstanding equity interests of O-Tex in a cash and stock transaction, with consideration comprised of $132.5 million in cash, subject to certain customary purchase price adjustments, and 4.42 million shares of our common stock.  The acquisition is expected to be completed by the end of 2017, subject to standard regulatory approvals, including termination or expiration of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and satisfaction of customary closing conditions.

This strategic transaction will significantly expand our cementing business with enhanced capabilities and strengthen our position as a leading oilfield services provider with a best-in-class well construction, intervention and completions platform.  O-Tex is the fourth largest provider of oilfield cementing services in the U.S. based on internal data and industry sources, specializing in both primary and secondary downhole specialty cementing services in most major U.S. shale plays.  With eight field offices, eight lab facilities and one of the youngest fleets in the industry, O-Tex maintains a diversified customer base consisting mostly of large independent exploration and production operators, which will both complement and expand our existing customer base.  We believe that O-Tex will be accretive to both earnings per share and cash flow per share in 2018.

Divestiture of Canadian Well Services Business

On October 30, 2017, we entered into a definitive agreement to divest of our Canadian rig services business to CWC Energy Services Corp. (“CWC”) for CDN $37.5 million in cash.  The transaction includes our Canadian fleet of 75 workover rigs, 13 swabbing rigs and the real estate associated with six operating facilities throughout Western Canada.  The transaction closed on November 5, 2017.

Conference Call Information

We will host a conference call on Thursday, November 9, 2017 at 10:00 a.m. ET / 9:00 a.m. CT to discuss our third quarter 2017 financial and operating results.  Interested parties may listen to the conference call via a live webcast accessible on our website at www.cjenergy.com or by calling U.S. (Toll Free): 1-855-560-2574 or International: 1-412-542-4160 and asking for the “C&J Energy Services’ Earnings Call.”  Please dial-in ten to fifteen minutes before the scheduled call time to avoid any delays entering the earnings call.  An archive of the webcast will be available shortly after the call on our website at www.cjenergy.com for twelve months following the call.  A replay of the call will also be available for one week by calling U.S. (Toll Free): 1-877-344-7529 or International: 1-412-317-0088, using the access code: 10112991.

About C&J Energy Services

C&J Energy Services is a leading provider of well construction, well completion, well support and other complementary oilfield services to oil and gas exploration and production companies.  We offer a comprehensive, vertically-integrated suite of services throughout the life cycle of the well, including fracturing, cased-hole wireline and pumping, cementing, coiled tubing, directional drilling, rig services, fluids management, artificial lift and other well support services.  We are headquartered in Houston, Texas and operate in all active onshore basins of the continental United States.  For additional information about C&J, please visit www.cjenergy.com.

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