Watford City company part of multi-million dollar mergerWATFORD CITY — A Watford City-based company that specializes in transporting drilling fluids and crude oil is part of a multi-million dollar merger announced this week.
By: Amy Dalrymple, Forum Communications
WATFORD CITY — A Watford City-based company that specializes in transporting drilling fluids and crude oil is part of a multi-million dollar merger announced this week.
Badlands Energy, which operates as PowerFuels with seven locations in western North Dakota, will join Heckmann Corp., a publicly-traded environmental service company that has customers in all other major U.S. shale plays except the Bakken.
Under the terms of the agreement that is expected to close by the end of the year, Heckmann will pay $125 million in cash and 95 million shares of the company’s common stock. Heckmann is traded on the New York Stock Exchange under the symbol HEK.
Heckmann also will assume about $150 million in PowerFuels’ debt.
Mark Johnsrud, a Watford City native who formed PowerFuels in 2005, will be CEO of the combined company. The company will be headed by Dick Heckmann, executive chairman.
PowerFuels, which has 1,500 employees, is headquartered in Watford City and has locations in Dickinson, Minot, Williston, Tioga, Stanley and Beach. Heckmann is based in Pennsylvania, but the combined company will move its headquarters to Scottsdale, Ariz.
PowerFuels has expanded rapidly in recent years and is now McKenzie County’s largest employer, said Gene Veeder, the county’s economic development director.
The company hauls, treats, stores and disposes of fluids used in the oil industry, as well as provides oil field rental equipment. Information about the merger calls PowerFuels the largest environmental services company in the Bakken, with assets that include 500 tanker trucks, 19 salt water disposal wells with more wells in the permitting phase and 2,500 tanks for hydraulic fracturing.
PowerFuels has housing projects completed or under construction in Watford City, Dickinson, Tioga and Minot that provide housing to employees.
“They’ve been leaders in making sure their employees get quality housing here,” Veeder said.
Johnsrud could not be reached for comment.
Ron Ness, president of the North Dakota Petroleum Council, said the merger is part of a trend that’s been going on in the Bakken with service companies selling or partnering with larger firms.
“It’s an indication of the scale of the Bakken and the type of capital it needs,” Ness said. “Certainly it’s a significant transaction.”