Update: Berry's deal to acquire Basic's California business line (C&J Well Services) closed in fourth-quarter 2021. Basic bought C&J Well Services in 2020 for $94 million.
Berry Corp., Dallas, has entered into an asset purchase agreement as a “stalking horse” bidder to acquire substantially all the assets comprising Basic Energy Services Inc.’s California business lines in connection Basic’s bankruptcy proceeding. Under the terms of the agreement, Berry would acquire Basic’s well servicing, specialized completion and remedial services, and water logistics services businesses in California.
In addition to the agreement with Berry, Basic Energy entered into separate asset purchase agreements with Axis Energy Services Holdings LLC and Select Energy Services Inc. that would see Axis acquire substantially all of Basic’s well servicing and completion and remedial segment assets outside of California and Select acquire substantially all of Basic’s water logistics segment assets outside of California, including all assets of Agua Libre Midstream LLC.
To facilitate the sales, Basic commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of Texas. The transactions are being undertaken pursuant to Section 363 of the bankruptcy code. The proposed transactions are subject to higher and better offers, among other conditions.
For Berry, a California-focused upstream energy company, the deal, if closed, would provide additional in-house capabilities for well servicing, including workovers and plugging and abandonment, and would “create a growth opportunity through helping the state properly plug and decommission the significant portfolio of orphan and idle wells in California, estimated to be a $6 billion dollar market, as well as the idle wells of other operators,” it said.
Berry intends to fund the $27 million purchase price with cash on hand upon completion of a successful bid process.