Lafayette businessman Mike Moreno’s Green Field Energy Services announced Tuesday a plan to sell the business and assets as part of its bankruptcy reorganization effort. The company, which specializes in hydraulic fracturing pump equipment and other oilfield services, sought Chapter 11 bankruptcy protection in Delaware in late October.
Moreno’s company (Billy Rucks and Kevin Moody are minor investors, according to Green Field’s annual report) hopes to reorganize its approximately $500 million in outstanding debt — about the same amount it lists in assets.
The Lafayette-based company, the first to run its hydraulic fracturing equipment on natural gas, plans to put its assets (“all or substantially all of the business and assets,”) on the auction block and conduct a Section 363 sale under the supervision of Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del. The company indicated that Tuesday’s announcement represents the start of the marketing process. (Read more about 363 sales here.)
The process is being handled by investment bank Carl Marks Advisory Group.
|Green Field's proprietary turbine-powered hydraulic fracturing pumping units are powered by remanufactured turbine engines previously used in U.S. military applications.|
An unexpected market shift was blamed for the bankruptcy filing. Green Field President Rick Fontova told the Houston Chronicle that the company started offering its fracturing services at a time when competitors were expanding and other companies were entering the market, creating an immediate glut in equipment. “Back in 2011 in this market, the demand far exceeded the supply and margins were much higher, which was how we entered the market,” Fontova told the newspaper. “But very quickly the conditions changed to where there was an oversupply.”
Green Field’s response was to dramatically increase its fleet of fracturing pumps, which mine natural gas, from eight in 2011 to 65 most recently. All the while, natural gas prices were starting to bottom out, causing a slowdown in hydraulic fracturing.
“We continue to see compelling long term opportunities for our unique turbine driven gas powered technology which is proven and not otherwise available in the marketplace,” Fontova said in announcing the asset sale — that, despite the current volatility in the market for hydraulic fracturing equipment. “No other provider has been able to develop a comparable technology, and we believe it has high strategic value to both service providers and customers.”
Moreno, who is in his mid-40s, serves as chairman and CEO of the private company, having led the group that purchased Lafayette businessman John Egle’s Hub City Industries in mid-2011, changing its name to Green Field — which was soon boasting that it was years ahead of its competition in the use of natural gas to run its hydraulic fracturing equipment (claiming it could even pipe the hydrocarbon directly from the wellhead). Its turbine-powered hydraulic fracturing pumping units are powered by remanufactured turbine engines previously used in U.S. military applications. The company also offers cementing, coiled tubing, pressure pumping, acidizing and other pumping services. Its major competitors are the big boys of the oilfield services industry, Halliburton, Schlumberger and Baker Hughes.
Moreno’s The Moreno Group once included Dynamic Industries, ARC Industries, Southern Steel & Supply, and Industrial Solutions Group, but he has not been involved in the management of entity (now called Dynamic Energy Services International) since mid-2012.
Read more here.