The fate of more than 700 Kern County oilfield service workers hangs in the balance as a local oil producer awaits word on its roughly $27 million bid for the California operations of a Texas company preparing to go out of business.
Berry Corp. executives said Wednesday the company will hire effectively all California employees of Fort Worth-based Basic Energy Services Inc. if no one beats its offer in an auction set for Monday. No other company has submitted an offer to buy the operation, though there are bidders for Basic's business outside the Golden State.
Basic's California operation, acquired last year for about $94 million and still known as C&J Well Services, is a leader in the Kern County oil well services industry. Although Dallas-based Berry currently contracts out such work, CEO and Chairman Trem Smith said it is interested in leveraging Basic's assets to tap what he sees as a $6 billion market for helping regulators in Sacramento plug orphan and idle wells across the state.
"In the future, hopefully the near future, it could become a significant piece of business for us," he said.
The situation raised eyebrows recently when Basic put out notice Aug. 17 — around the time it voluntarily filed for Chapter 11 bankruptcy protection — that it expected to permanently lay off 768 employees at its offices on Allen Road, Earthmover Court, James Court and Rosedale Highway, as well as 98 more of its workers in Los Angeles County.
Smith and Executive Vice President Danielle "Dani" Hunter said Berry hopes to retain not only Basic's California employees but all of its customers in the state as well.
Some of those customers are competitors and so the new division would operate independently. Berry said customer information would not be shared with its own exploration and production operations.
Hunter emphasized Basic's California operations are profitable and would support Berry's own drilling and well-abandonment needs.
By bringing on Basic's approximately 900 California employees, the acquisition would more than triple Berry's payroll.
"Our intention is to offer everyone employment under the Berry banner," Smith said, adding that the new division would be overseen by Basic's local chief, Jack Renshaw.
The bankruptcy case is expected to bring an end to Basic, which was founded in 1992 and five years ago emerged from a previous bankruptcy case.
Basic operates in 10 U.S. states. In California it owns several drilling rigs and does well work-over jobs, fracking, oilfield remediation work and water logistics.
C&J has changed hands a few times since its establishment in the 1940s as Pool Well Services.
Berry said the acquisition will be seamless if its bid prevails.
Hunter said the $27 million purchase bid would be adjusted based on accounts-receivable and accounts-payable liabilities, as well as employees' paid time off.
Basic declined to comment Wednesday.