Forbes Energy Services Acquires Cretic Energy Services


ALICE, Texas, Nov. 16, 2018 (GLOBE NEWSWIRE) -- Forbes Energy Services, Ltd. (OTCQX: FLSS) (“Forbes”), announced today that it has acquired Cretic Energy Services, LLC (“Cretic” or the “Company”) from Catapult Energy Services Group, LLC, an NGP and NGP Energy Technology Partners portfolio company. 

Cretic, headquartered in Montgomery, Texas, provides large-diameter, extended-reach, coiled tubing services to oil and gas producers predominantly in the Permian Basin. The Company has been an early mover in bringing high capacity coiled tubing units to the market and one of the fastest growing providers to address specific demands associated with completing long lateral wells.

The acquisition is expected to position Forbes as a leading completions service provider by adding seven large-diameter coiled tubing spreads, engineered fluids, nitrogen pumping, thru-tubing, and other completion support services to its existing coiled tubing business. The combined company will have one of the largest fleets of large-diameter, high-capacity coiled tubing units, and an established footprint in the Permian Basin and South Texas, as well as a presence in niche markets in East Texas, Oklahoma and other states surrounding Texas. 

“This acquisition is a sizeable opportunity to accelerate growth for Forbes,” said John Crisp, President and Chief Executive Officer of Forbes. “The Cretic team has built a company that is best in class, and dovetails directly with our current offering of completion and production-related services. We share a common goal in continuing to build out an operation based on safe, reliable, consistent and efficient execution.”

Cretic was co-founded by Joe Michetti, its President and Chief Executive Officer. Prior to founding Cretic, Michetti co-founded Infinistar Energy Services, which he sold to Weatherford International in 2009, maintaining a managerial position within Weatherford’s Global Coiled Tubing product line. He also has held various managerial and engineering positions for El Paso Production, Burlington Resources and Pan Canadian Petroleum.

Michetti will become President and Co-Chief Operating Officer of Forbes, and brings with him an experienced and professional team of managers, technical support staff, and operators, each of whom will continue in their current roles under Cretic.

“Our operation at Cretic has proven to the market that we can deliver results faster, safer, and more efficiently than before,” said Michetti. “We are eager to become a part of Forbes, which will expand our infrastructure, enable us to reach more markets with our quality approach, and diversify our product offerings to include well servicing and fluid logistics services.”

“We are pleased to have partnered with and supported the Cretic team in introducing large-diameter, extended reach coiled tubing to the market,” said Gregory Laake, Managing Partner of Catapult Energy Services Group. “Joe and his team have established Cretic as a specialized, innovative completions business with a solid blue-chip customer base. We wish them continued success under Forbes.”

In order to fund the Cretic acquisition, Forbes (i) entered into a new $35 million ABL facility with Regions Bank and (ii) amended and upsized its existing first lien term loan to receive an additional $60 million of term loan proceeds. Following the Cretic acquisition, the short term portion of Forbes’ term loan, in the amount of $50 million, is expected to be repaid with proceeds from a planned offering of rights to purchase unsecured subordinated convertible debt securities to its existing shareholders on a pro rata basis. Forbes’ two largest shareholders have committed to purchase the debt securities underlying any rights that are not exercised by other shareholders. In the event Forbes does not consummate the planned rights offering within twelve months following the Cretic transaction, the short term portion of the term loan will automatically convert to unsecured subordinated convertible debt securities.

Forbes was advised by Fried, Frank, Harris, Shriver & Jacobson LLP, and Houlihan Lokey Capital, Inc., in connection with the acquisition. Catapult was advised by Simmons Energy | A Division of Piper Jaffray.

About Catapult Energy Services Group

Founded in 2013, Catapult uses an innovative approach to establish, invest in and support start-up oilfield products and services companies. Led by experienced industry professionals, Catapult is funded by NGP and NGP Energy Technology Partners.

About Cretic Energy Services LLC

Cretic Energy Services was founded in 2013 to provide oil and gas producers with the coiled tubing services, equipment, and experience needed to safely and efficiently service horizontal, extended reach wells. The company operates throughout Texas, and in Louisiana, Mississippi, New Mexico, Oklahoma and Utah.

About Forbes Energy Services LLC

Forbes Energy Services is an independent oilfield services contractor that provides a broad range of completions-related and production-related services to oil and natural gas companies, primarily onshore in Texas and Pennsylvania.

This press release contains certain “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve many risks and uncertainties. These statements relate to Forbes’ expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding future financial performance and growth targets or expectations; market and industry trends and developments, including the current decline in oil and natural gas prices; and the potential benefits of Forbes’ completed and any future merger, acquisition, disposition, restructuring, and financing transactions, including the planned rights offering. You can identify these and other forward-looking statements by the use of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,” “would,” “could,” “potential,” “future,” “continue,” “ongoing,” “forecast,” “project,” “target” or similar expressions, and variations or negatives of these words. These forward-looking statements are based on information available to Forbes as of the date of this press release and its current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Forbes’ views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include the following:

  • Forbes has incurred additional indebtedness to finance the Cretic acquisition and may not be able to meet its debt service requirements;
  • Forbes may not realize the growth opportunities and operational synergies that are anticipated from the Cretic acquisition;
  • the completion of the integration of Cretic could adversely affect Forbes’ business, financial results, and operations, and the market price of shares of its common stock;
  • Forbes’ stock price may be volatile, which could result in substantial losses for investors in our securities;
  • sales of shares of Forbes’s common stock by Forbes’ existing stockholders, or the perception that these sales may occur, especially by directors or significant stockholders of Forbes, may cause Forbes’ stock price to decline;
  • future sales and issuances of shares of Forbes’ common stock or rights to purchase its common stock, including pursuant to Forbes’ management incentive plan, as well as the proposed rights offering, could result in additional dilution of the percentage ownership of Forbes’ stockholders;
  • if securities or industry analysts publish inaccurate or unfavorable research about Forbes’ business, the stock price of its common stock could decline;
  • the ownership of Forbes’ common stock is highly concentrated, and your interests may conflict with the interests of Forbes’ existing 5% or more stockholders; and
  • the other factors included in our annual report on Form 10-K for the year ended December 31, 2017 and its other filings with the Commission.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release. Except as required by law, Forbes does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.


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