After losing out on a recent bid to acquire Savanna Energy Services, management at Western Energy Services is not ruling out a return to the acquisition market.
At the same time, Western will focus for now on delivering rigs for customers, improving pricing and profitability and just “running the business,” Western’s chief executive Alex MacAusland said in conference call to discuss the company's first quarter results.
As for one day returning to the fray, “we always keep our eyes open and our ears to the ground,” he told analysts.
“We’re disappointed we did not get Savanna,” he said. “It was a really good fit for [their] people and equipment. We had an excellent strategy to put the companies together and it would have been nice to do, but you just gather yourself up, go back to work and fight another day.”
Asked whether Western would be more inclined to add drilling or service rigs to its stable, MacAusland said his team remains committed to all three of the company’s service lines, including its oilfield rentals business.
At the same time, “we do like the service rig business a lot,” he said. “We’ve seen a good recovery [there] and the business is a little less capital-intensive.” Yet, he said, the drilling business has also been good for Western, as has its oilfield rentals business, which he called the company’s “unsung hero.”
Last week Western’s management demanded a $20 million break fee from competitor Savanna, following the collapse of an agreement between the two companies that, in other circumstances, might have seen Western take control of Savanna.
Competitor Total Energy Services had gained control of Savanna after progressively acquiring the majority of the company's outstanding shares.
Savanna's CEO, CFO and board of directors, with the exception of one individual, stepped down.