Ranger Energy Buys STEP's US Coiled Tubing Assets for $27.5M
Houston-based Ranger Energy Services is acquiring the U.S. coiled tubing assets of Canada’s STEP Energy Services for $27.5 million, Permian Basin Oil & Gas Magazine reports, a deal that reshapes the competitive landscape for coiled tubing work in the Permian and Bakken.
Market Impact
The deal, worth $22.5 million in cash plus additional consideration, covers 13 coiled tubing spreads along with related equipment, inventory, and certain property and vehicle leases, according to the magazine. STEP’s U.S. coiled tubing operations run out of five facilities that overlap with Ranger’s existing footprint, stretching from the Bakken down to south Texas, with the heaviest concentration in the Permian Basin. Closing was expected by September 11.
Ranger said the acquisition “positions Ranger as the second largest U.S. coiled tubing operator in the U.S. onshore market with significant scale and a strong Permian and Bakken presence.” Ranger CEO Stuart Bodden said on August 31, “We have been proud of our Rockies coiled tubing business and began evaluating opportunities to scale it earlier this year… STEP’s Coil+ Extended Reach technology is proven in the U.S. market, and we respect the STEP leadership team and what they have built. We intend to preserve its legacy of service quality and innovation.”
What It Means for Subcontractors
- Coiled tubing crews and operators currently under contract with STEP in the Permian or Bakken should confirm employment and equipment assignment status directly with Ranger as the September 11 closing approaches.
- Well completion and workover subcontractors relying on spot-market coiled tubing capacity should lock in fall pricing now. Consolidation of 13 spreads under one operator reduces the number of competing bidders in the Permian and Bakken this fall.
- Equipment and vehicle lessors tied to STEP’s existing leases in the five affected facility locations should reach out to Ranger to confirm which leases transfer and which may be renegotiated post-close.
- Smaller regional coiled tubing outfits in south Texas and the Rockies should reassess pricing strategy, since Ranger’s newly expanded scale may allow it to compete more aggressively on day rates for extended-reach jobs using STEP’s Coil+ technology.
- Companies staffing coiled tubing crews in the Bakken should watch for hiring or crew-transfer announcements from Ranger in the weeks following the September 11 close, given the stated intent to preserve STEP’s existing service operations.
