Schlumberger to merge North America fracking unit with Liberty Oilfield Services

(Reuters) – Schlumberger said on Tuesday it would merge its North America fracking business with Liberty Oilfield Services Inc for a 37% stake in the new company as oilfield service activities remain crippled due to weak oil demand.

Oil producers have slashed spending on drilling and fracking wells as the coronavirus pandemic hurt energy consumption.

Schlumberger, which reported a second straight quarterly loss in July, had said that North American revenue fell to $1.18 billion in the second quarter, less than half of what it was a year earlier, with only slightly better conditions expected in the current quarter.

Liberty’s revenue slumped about 84% to $88.4 million in the second quarter and it posted a net loss of $ 445.7 million, compared with a profit of $22 million a year earlier.

The combined company would have a market capitalization of $1.2 billion, the companies said in a joint statement, adding 2019 combined revenue would have been $5.2 billion.

The transaction is expected to close in the fourth quarter of 2020.

(Reporting by Arathy S Nair in Bengaluru; Editing by Arun Koyyur)