With just 2 weeks till Christmas, Basic Energy Services is laying off 50 employees at its regional office in Cisco Texas, with another 300 possible in TX, OK, KS, & CO.
According to a news release, the company is selling nearly all of its assets in the pressure pumping business, ultimately exiting from hydraulic fracturing.
The expected proceeds are approximately $30 to $45 million.
Basic Energy Services indicated that in the release that these proceeds are "designed to bolster the Company’s core remaining production-focused businesses of well servicing and water logistics".
Roe Patterson, President and CEO, stated, “While the overall energy service market remains highly competitive, we continue to see high value potential in our Agua Libre Midstream subsidiary".
Additionally, director of investor relations for Basic Energy Services Trey Stolz, told Texas based KTXS that 50 of the 73 employees in Cisco are being laid off, while the remaining 23 would be offered other jobs within the company.
The layoffs are not exclusive to Cisco either.
According to Stolz, more layoffs are happening at other locations including those in Texas, Oklahoma, Kansas & Colorado. Reportedly, Stolz told the Abilene Reporter-News that of the 4,100 employees in Basic Energy Services employ, another 300 could be laid off.
Roe Patterson's press release also said that "The decision to exit the pumping services market in no way reflects on the employees that make up our pumping services team" and that "this team has aggressively cut costs and continued to win business in a highly competitive market."
However, he concluded that "Unfortunately, these pumping business lines currently remain in a structurally-disadvantaged position, as they are our most capital-intensive businesses. These divestitures will also reduce our capital lease exposure and the Company’s total debt. The transaction will allow us to focus our efforts in the production-focused businesses in which we excel and generate higher returns on capital."
Basic Energy Services provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas.