Two Oklahoma E&P companies are merging.  When one oil company buys another oil company, the service companies working for the “bought” oil company tend to get eliminated from future work while the service companies working for the “buyer” tend to see work expand.  It helps to work for the buyer!

Therefore, with Devon and WPX, who are the winner and loser service companies?

For maybe the first time ever, there might be no loser service companies.  Why?  Consider this:

FIRST:  Devon is active in New Mexico and Wyoming these days.  WPX is active in the Texas part of the Permian and the Bakken.  There is almost no geographic overlap, so there is no geographic redundancy.

SECOND:  WPX likes to use the drilling rigs of Nabors, Cactus, H&P and Unit. Devon uses Nabors, Cactus, H&P and Cyclone.  These two operators use pretty much the same drilling contractors for 80% of their work.

THIRD:  Both E&P companies like to use the bigger, established cementing service companies – Halliburton, Schlumberger and BJ, plus a few others here and there.  Again, no change.

FOURTH:  Directional drillers?  Both operators use a wide range of directional companies, but mostly the independent directional firms rather than the major directional providers.  So, a draw.

FIFTH:  Over and over again Liberty is the frac service company.  While others are used, both companies like Liberty.

So, like we said at the top, this is one of those rare mergers where there are no loser service companies, which is nice to see in an otherwise disastrous 2020 oilfield service and equipment market.

PS.  We called on our associates over at Oilfield Logix to pull a bunch of well files for us to see which service companies these E&P companies are relying on.  Thanks guys!