Business For Sale

Scalable, Profitable Oilfield Equipment Rentals Bu

Odessa, TX
Ector County

Texas Permian Basin


Asking Price: Annual Revenue:
$9,750,000 $14,500,000

Services: Non-classifiable


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RE: Scalable, Profitable Oilfield Equipment Rentals Bu Broker: Jeff Adam
Owner Financing is Available!
Price $9,750,000 with up to 15% seller financing

Quick Facts

Asking Price: $9,750,000
Annual Revenue: $14,500,000
Net Profit: Not Disclosed
Cash Flow: $2,000,000
Total Debt: Not Disclosed
FF&E: $5,050,000
Real Estate: Not Disclosed
Year Established: 2012
Employees: 40
BBN Listing #: 354318963
Broker Reference #: 19840

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Business Overview:

The company is a 6 year old, well-established oilfield equipment rentals and service provider, serving primarily oilfield drilling operations in the North Dakota Bakken formation and Texas Permian Basin. The company operates one branch located in each state, and rents items of all sorts to oil drilling companies. They also provide services for work over and frack locations as needed. Most of their work is done on the drilling side of oil and gas operations and they service the area within 100 miles of each branch location. The company also offers experienced personnel to aid in the construction and repair of production locations and environmental remediation.
The business grew quickly by direct marketing to oil drillers and company men, and focusing on safe, timely and quality execution of operating commitments. Continued growth was driven by operational excellence, word of mouth and repeat business. The North Dakota and Texas locations have diverse strengths and respond to their respective market needs. Equipment and personnel can also be shared between both locations, as needed.
The company is a profitable business with rapid growth potential. Current customers are primarily oil and gas producers with approximately 30-35 active MSA’s (Master Service Agreements). The largest customer is an energy producer and accounted for 29% of revenue in 2017. The top 5 customers accounted for 74% of revenue in 2017. However, this does not tell the entire story as the company has developed extensive relationships with ‘Company Men’ (eg drilling managers) and drilling superintendents throughout their market areas. These key decision makers, when they change companies, typically refer the company to their new employer.
The owner feels that a major advantage over competitors is the quality and seniority of their employees. The crews, are professional and are a major asset to the company. The company currently employs approximately 40 full-time (all W2 paid). Customers are happy with the service and committed to using the company. The owner primarily provides oversight and focuses on locating and purchasing rental equipment at prices that allow for quick pay-offs.
The company does no outside advertising. The company receives repeat business and referrals from an estimated 35-40 oil drilling companies. The owner feels that the business could grow faster by purchasing rental equipment to eliminate 3rd party rentals in TX division, continue adding rental equipment (with 4-8 month payback), continue to build management leadership structure and expand to other oilfields.
The asking price for the assets of the business is $9,750,000 EXCLUDING REAL ESTATE. The seller will consider financing up to 15% of the purchase price to a purchaser qualified/approved by the seller). All financing is to be personally guaranteed. Seller prefers to sell for ALL-CASH. The assets include inventory at cost of $0, work in progress of $750,000, accounts receivables of $2,200,000 and FFE/V (Furniture, Fixtures, Equipment, Vehicles) valued at $5,050,000. The TOTAL ASSETS are $8,000,000. The price will be adjusted for actual inventory, work in process (WIP) and accounts receivables as of the sale date.
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Property Features and Assets:

The business occupies large yards in North Dakota and Texas including workshops. The seller owns the real estate and is willing to offer long-term leases to the purchaser (or sell in a separate real estate transaction). Both locations have substantial room for expansion.

Market Competition and Expansion:

Competition:The oilfield rentals industry is very competitive. The major competitors include independents, nationals and multi-national publicly traded companies. Despite the presence of competitors, this business has thrived, grown and has SIGNIFICANT scalability/growth for a new owner. Independents can easily start but require substantial capital to acquire rental assets. However, independents do not offer the repeatability, reliability and systems provided by a larger company. Some independents do not have the depth to handle large numbers of customers and are limited in size and scalability. National and multi-national publicly traded competitors typically have substantial rental equipment assets and service the largest E&P players in the industry. However, they do not always offer the nimbleness and dedication provided by a well-capitalized independent. Growth & Expansion:The primary marketing strategy is to get face to face with key well drilling decision makers for oil/gas producers and build repeat/referral relationships. The company sells on the principal that it provides oilfield drilling rentals and related roustabout services in an uncompromising timely, reliable, quality and safe manner. The owner feels that the sky is the limit. The company obtains leads by referral, networking, studying drilling reports, and North Dakota Department of Natural Resources Active Drilling Rig List (www.dmr.nd.gov/oilgas/riglist.asp) and Texas Railroad Commission data. Sales are done in person, by email and by phone. Key opportunities for growth are in approaching other energy producers in the North Dakota Bakken and Texas Permian Basin as well as purchasing additional rental equipment with a 4 to 8 month payback. The larger possibility for growth lies in expanding to other areas across the USA. Adding a sales person in a key strategic area (such as Denver, Colorado) could also drive meaningful growth. Tactically, the founder believes that developing a unique rental item could be a core item to additionally enhance rental packages.

Reason for Selling:

Recapitalization

Additional Details:

  • The property is owned.
  • The owner is willing to train/assist the new owner.
  • This is not a homebased business opportunity.
  • This is not a franchise resale opportunity.

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