What Does The Siren Acquisition Mean for LBRT’s LPI division?
On April 10, Liberty Oilfield (LBRT) acquired Siren Energy in the Permian for its integrated natural gas compression and CNG delivery business. Purchased for $78 million, Siren will add 16 MMcf per day of natural gas compression capacity. Because Siren delivers CNG and RNG (renewable natural gas like hydrogen) in the drilling and completions markets in remote locations, it will expand LBRT’s logistics capacity. So now, it will not only own natural gas power generation capacity but also have the fuel supply capability.
The acquired assets will fit in LBRT’s digiTechnologies set of solutions. LBRT provides mobile power generation, digiFrac electric spread, and hybrid pumps. Readers may note that digiTechnologies utilize natural gas to generate electricity and power its digiFleet services remotely. Simply put, digiTechnologies utilize natural gas to remotely generate electricity and power digiFleet services. The acquisition coincides with its Liberty Power Innovations (or LPI) launch. LPI will provide integrated alternative fuel and power solutions for remote applications.
What Are The Other Benefits?
According to an article published by Midland Reporter-Telegram, LPI will provide a steady fuel supply to its Permian Basin operations, where Liberty provides fracturing, wireline, and sand services. The increased diesel price prompted the shift from diesel and dual-fuel to natural gas. Ron Gusek, president of LBRT, was quoted saying, “At the widest point, the savings are $20 million for a single frac fleet.” The other key issue these environment-friendly pumps tackle is ESG, which is at the forefront of almost every energy company’s concern. Natural gas is a reliable intermittent step to reach the “zero-carbon” emission state.
How Do The Market And Competition Affect Its Choice?
Through digiTechnologies, now combined with LPI, LBRT brings one of the lowest emissions solutions and highest thermal efficiency in the market. LPI will carry natural gas fuel to the oilfield, lowering well development costs for the E&P players and improving their profitability. LBRT has grown from one active hydraulic fracturing spread in 2011 to over 40 frac spreads by the end of 2022. However, it is in for tough competition in a market that NexTier, Halliburton, and ProFrac dominate. These players have transitioned significantly into Dynamic Gas Blending (or DGB) and are moving quickly into the electric frac space. According to an estimate from NexTier, about 29 new builds and reactivations are coming into the market in 2023.
