Sell an Oilfield Services Company in Texas

Service Companies Born in the Barnett

The Barnett Shale natural gas field lies under Fort Worth and the counties around it. When drilling took off there, a wave of local service companies started up or grew to keep pace.

Many are still running. Owners call us about water hauling, vacuum trucks, hot oil units, roustabout crews, well service rigs, pipeline and lease road construction, and equipment rental yards.

Plenty of these companies now work well beyond North Texas. That reach matters to a buyer, because it shows the business can follow the work when one basin slows down.

What the Equipment Is Really Worth

In this business the fleet is often the largest asset on the books. Buyers and lenders will want a full list of trucks, trailers, rigs, tanks and yard equipment.

• Year, hours or miles, and condition for each unit
• Maintenance and DOT inspection records
• Which units are working, which are parked and which are parts donors
• Liens, loans and leases that must be paid off at closing

Expect buyers to look at both earnings and the resale value of the iron. In a slow market, the equipment can set a floor under the price. In a busy one, earnings usually drive it.

A recent outside appraisal can help, as long as it reflects what used equipment is actually trading for, not what it cost new.

Operator Concentration

Most service companies depend on a small group of operators. It is common for one producer to be the biggest share of the invoices.

Buyers know an operator can cut rigs, change vendors or sell its acreage to a company with its own suppliers. They will ask how long you have worked with each one and how you won the work.

Master service agreements, approved vendor status and steady billing across several operators all help. If one name is most of your revenue, expect part of the price to come as an earnout or seller note.

Your Safety Record Is Part of the Price

Operators screen vendors on safety, and so do buyers. A poor record can cost you work today and make a company far harder to sell tomorrow.

Pull together your safety history before going to market. That includes injury logs, OSHA records, your safety manual, training files and any vendor scoring you get through operator platforms.

Insurance history matters too. Buyers will look at claims and your experience modifier, since both affect what it costs them to keep the company insured.

Clean files and a named safety lead tell a buyer the crews work safely whether or not the owner is on location.

Timing a Sale Around Commodity Prices

Oil and gas prices move, and buyer appetite moves with them. When prices are strong and rigs are busy, more buyers show up and lenders are more willing to finance a deal.

When prices drop, buyers grow cautious and lean harder on earnouts. No one can call the top, so the better plan is to be ready to sell when a good window opens.

That means clean books, current equipment lists and organized safety files kept on hand. Owners who prepare early can move while buyers are still eager.

Our exit planning page covers how to get ready a year or two ahead.

Who Buys Oilfield Service Companies

• Larger service companies adding a basin, a service line or a customer base
• Private equity groups building regional energy service platforms
• Local competitors who want your crews, yard and operator relationships
• Individual buyers from the industry, sometimes using SBA financing

Some buyers want the whole company. Others only want the equipment. A broker can tell you which kind of buyer fits your business, and how a business valuation sets the asking price.

Texas sellers should also plan for the Comptroller's tax clearance step. See our page on the Texas Certificate of No Tax Due.

Getting Started

See where your company stands today. Use the free valuation form or call (817) 555-0142 to talk it over in confidence.