KLX Energy Services Holdings, Inc. (‘KLX’) provides diversified oilfield services to leading onshore oil and natural gas E&P companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States.
The company delivers mission-critical oilfield services to primarily independent major oil and gas companies, focused on drilling, completion, production, and intervention activities for technically demanding wells, from over 50 service facilit...
KLX Energy Services Holdings, Inc. (‘KLX’) provides diversified oilfield services to leading onshore oil and natural gas E&P companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States.
The company delivers mission-critical oilfield services to primarily independent major oil and gas companies, focused on drilling, completion, production, and intervention activities for technically demanding wells, from over 50 service facilities located in the United States. The company’s primary services include directional drilling, coiled tubing, thru tubing, hydraulic frac rentals, fishing, pressure control, wireline, rig-assisted snubbing, fluid pumping, flowback, testing, pressure pumping, and well control services. The company’s primary rentals and products include hydraulic fracturing stacks, blow out preventers, tubulars, downhole tools, dissolvable plugs, composite plugs, and accommodation units. The company operates in three segments on a geographic basis, including the Southwest Region (the Permian Basin and the Eagle Ford), the Rocky Mountains Region (the Bakken, Williston, DJ, Uinta, Powder River, Piceance, and Niobrara basins), and the Northeast/Mid-Con Region (the Marcellus and Utica, as well as the Mid-Continent STACK, SCOOP, and Haynesville).
The company works with its customers to provide engineered solutions across the entire lifecycle of the well, by streamlining operations, reducing non-productive time, and developing cost-effective solutions and customized tools for its customers’ most challenging service needs, which include technically complex unconventional wells requiring extended reach horizontal laterals, with greater completion intensity per well.
The company endeavors to create a ‘next generation’ oilfield services company in terms of management controls, processes, and operating metrics, and has driven these processes down through the operating management structure in every region.
Products and Services
The principal high value-added services, and related tools and equipment, the company offers to support its customers throughout the lifecycle of the well include drilling, completions, production, and well intervention services and products in each of its geographic reporting segments.
Drilling: The company provides directional drilling and associated drilling support services, including accommodations packages, to E&P companies in many of the most active areas of onshore oil and natural gas developments in the United States, including all active U.S. oil and natural gas basins, with level 1 facilities in the Appalachian Mountain, Gulf Coast, Mid-Continent, West Texas, and Rocky Mountain regions.
The company’s drilling activities consist of directional drilling services, downhole navigational and rental tools businesses, and support services, including well planning, site supervision, accommodation rentals, and other drilling rentals, which assist customers in the drilling and placement of complex directional and horizontal wellbores. These directional drilling activities utilize in-house positive pulse and electromagnetic measurement-while-drilling communication options to ensure accurate and timely delivery of data transmission for all real-time drilling applications, as well as logging-while-drilling capabilities.
In addition to navigation, the company’s systems offer various technologies, including gamma ray, azimuthal gamma ray, real-time continuous inclination and azimuth, rotary steerable, pressure-while-drilling, mode shifting, stick-slip and destructive dynamics, dynamic sequencing, and real-time shock and vibration modules. The company utilizes modern well planning and anti-collision software to assist its well planners in providing accurate real-time information to its customers. Additionally, the company offers its K-series mud motor fleet that features a proprietary transmission-mandrel to deliver strong build rates, fight fatigue on extended laterals, and is available to service all known well profiles. The demand for these services tends to be influenced primarily by customer drilling-related activity levels.
Completion: The company’s completions activities focus on services that help its customers complete and stimulate extended reach horizontal laterals and more technical wellbores. The company is highly experienced in safely servicing deep, high-pressure, high-temperature wells in all of the most active onshore basins in the United States, and provides premium perforating services for both wireline and tubing-conveyed applications.
The company’s completions activities include a wide range of services: coiled tubing and nitrogen services; wireline services (including pump down perforating, logging, and pipe recovery); pressure control products and services; wellhead and hydraulic fracturing rental products and services; flowback and testing services; thru-tubing technologies and services; fishing services; rig assist snubbing services; cementing products and services; acidizing and pressure pumping services; and downhole completion tools, including toe sleeves, wet shoe cementing bypass subs, composite plugs, dissolvable plugs, liner hangers, stage cementing tools, inflatables, float and casing equipment, and retrievable completion tools.
The company’s coiled tubing units are used in the provision of completion services, or in support of well-servicing and workover applications. The company’s rig-assisted snubbing units are used in conjunction with a workover rig to insert or remove downhole tools, or in support of other well services while maintaining pressure in the well, or in support of unconventional completions. The company’s nitrogen pumping units provide a non-combustible environment downhole and are used in support of other pressure control or well-servicing applications.
As of December 31, 2024, the company had a fleet of 39 coiled tubing units, 21 of which are large diameter coiled tubing units, across its geographical regions.
Last year, the company continued to optimize the quality and performance of its magnesium alloy-based line of dissolvable hydraulic fracturing plugs. The company’s proprietary dissolvable plugs deliver all the benefits of a traditional hydraulic fracturing plug but without the need for bottom hole intervention for removal. The company’s latest generation dissolvable frac plug, the PhantM, has been deployed successfully across major U.S. oil and natural gas basins in now more than 1,200 wells by more than 70 customers. The company’s PhantM plugs dissolve quickly and reliably, resulting in faster time to production, and are effective in a wide range of operating temperatures and salinity, including temperatures ranging from 80 to 350 degrees Fahrenheit.
Four of the 27 plug-and-perf units are the company’s new Whisper Series units. These specialized units are electric/battery-powered and support the company’s and its customers' sustainability efforts by reducing carbon footprint and noise levels. Additionally, the significant fuel savings due to the units being electrically powered make these units more cost-effective to operate. The company also maintains a full line of radial cement bond tools, compensated neutron porosity tools, and casing evaluation tools to provide well evaluation services to its clients. The company also utilizes greaseless line and quiet truck wireline technology to meet the environmental concerns of its customers.
The company offers a full line of valves and corresponding services to assist clients with their pressure control needs during hydraulic fracturing operations. These valves are assembled in predetermined configurations based on customer preference and installed on the wellhead to control flow and pressure during hydraulic fracturing operations. The company owns a large line of valves serving the North American onshore oil and gas market. The company has enhanced its hydraulic fracturing valve fleet line through the internal development of next-generation technology, including its proprietary, patent-pending hydraulic fracturing relief valve (‘FRV’).
Additional technologies that the company currently deploys on behalf of its customers include its patented flotation collar, which assists customers in getting completion casing to the bottom of extended reach wells when friction prevents getting casing to depth, proprietary internal pressure actuated toe sleeve, which allows customers a consistent and reliable hydraulic fracturing initiation sleeve at the toe of the completion, composite hydraulic fracturing plug, a flow control device that is set in the wellbore at given intervals to divert fluid into the formation, and dissolvable plugs.
Production: The company also provides services to enhance and maintain oil and gas production throughout the productive lives of its customers’ wells. The company’s production services include maintenance-related intervention services, as well as the provision of specifically required products and equipment. The principal services and equipment the company provides across the production lifecycle of the well include production blow out preventers, mechanical wireline services, hydro-testing, premium tubulars, and other specialized production tools.
Key downhole production tools that the company has developed and deployed with strong customer adoption include:
Punch Ram Tool—The punch ram tool gives customers the ability to safely and repeatedly release trapped pressure inside production tubulars during pulling operations. The alternative is to ‘hot-tap’ the tubing, which is a high-risk operation that most operators are not willing to employ.
Hydraulic Fracturing Protect Rod Hang Off Tool—This tool is developed to give customers the ability to ‘hang off’ a rod string rather than tripping it out of the hole and laying it down. The associated costs of tripping rods out of the hole, coupled with the damage of laying them down and picking the string back, make this tool an excellent alternative option for customers. The hang-off tool allows an operator to easily hang the rod string in the wellhead and still gives them the ability to tie into the tubing, if needed, to monitor pressure or pump fluid.
Intervention: The company’s intervention services consist of best-in-class technicians and equipment that are focused on providing customers engineered solutions to downhole complications. Intervention involves the application of specialized tools and procedures to retrieve lost equipment and remove other obstructions that either interfere with the completion of the well or are causing diminished production. The principal services the company provides to remediate these complications include fishing, thru-tubing, and pipe recovery.
The company supports its intervention group with a portfolio of tools consisting of patented and other proprietary technologies. Recent innovations currently deployed in the field include the company’s DXD Venturi Tool, SpectrA PDC Bearing Section, Hydraulic By-Pass Tool, and Drill Mate (Mechanical By-Pass Valve). These tools were designed to improve upon conventional technology used by the company’s competitors.
DXD Venturi Tool—The patent-pending DXD (Debris Extraction Device) is an internally developed downhole tool that assists customers in removing unwanted debris from the wellbore. Utilizing fluid dynamics, the tool consists of a jet section that accelerates fluid across a nozzle. This increase in fluid velocity creates a pressure drop inside the tool, which draws fluid through an inlet. As the fluid is drawn into the system through the inlet, it picks up unwanted debris in the fluid flow, which is then caught in a series of chambers installed below the tool. The chambers then carry the debris out of the hole when the system is brought back to the surface.
SpectrA PDC Bearing Section—The patented SpectrA PDC bearing pack is an extremely reliable and robust thru-tubing motor that deploys the industry’s only all PDC (Polycrystalline Diamond Compact) bearing design—meaning no ball bearings. The elegant design greatly reduces the operating cost of the company’s thru-tubing motors and provides it with a significant differentiator in the thru-tubing space. Since being deployed, SpectrA PDC has proven to be one of the most robust bearing packs available on the market, and its most recent enhancement is able to accommodate increased full flow through the bit.
Hydraulic By-Pass Tool—The patented hydraulic by-pass tool allows the company to run its conventional motor assemblies and achieve substantially higher circulation rates without reducing the expected life of its conventional power section. The additional fluid being pumped and bypassed optimizes the downhole hydraulics for the operation and assists with proper debris removal.
Drill Mate (Mechanical By-Pass Valve)—The patented Drill Mate is a downhole tool that was developed to give customers a way to mechanically bypass fluid during drill-out or clean-out operations. The tool is a two-piece system that opens and closes based on the amount of weight being set on the mill or bit. During bottom milling with the tool, the tool is in the closed position, putting 100% of the flow through the motor bottomhole assembly (‘BHA’). As weight is removed from the mill or bit, either by milling through the obstruction or picking up off bottom, the tool strokes open, thereby exposing bypass ports that divert fluid through them. At this point, a customer can increase the amount of fluid being pumped through the BHA to assist in debris removal.
Customers and Marketing
Substantially all of the company’s customers are engaged in the energy industry. Most of the company’s sales are to major, large independent, and regional oil and natural gas companies, and these sales have resulted in a diversified and geographically balanced portfolio of more than 610 customers within North America. Revenues from the company’s five largest customers collectively represented approximately 31% of its revenues for the year ended December 31, 2024.
The company’s sales activities are conducted through a network of sales representatives and business development personnel, which provide coverage on a product-line and geographical basis. Sales representatives work closely with local operations managers to target potential opportunities through strategic focus and planning. Customers are identified as targets based on their drilling and completion activity, geographic location, and economic viability. Direction of the sales team is conducted through weekly meetings and daily communication. The company’s marketing activities are performed internally. The company’s strategy is based on building a strong North American brand through multiple media outlets, including its website, select social media accounts, print, billboard advertisements, press releases, and various industry-specific conferences, publications, and lectures. The company has a technical sales organization with expertise and focus within its specific service line. The company’s strategy is to sell its services using data to demonstrate safety and service quality. The company accomplishes this through communication across sales regions and operations departments to share best practices and leverage existing customer relationships.
Competition
The company’s major competitors include Schlumberger, Halliburton, Baker Hughes, Patterson-UTI Energy, Liberty Oilfield Services, RPC, ProPetro Holding Corp., Phoenix Technology Services, STEP Energy Services, Ranger Energy Services, Nine Energy Services, Scientific Drilling International, and other private competitors.
Government Regulation
The company is also subject to laws and regulations, such as the Comprehensive Environmental Response, Compensation, and Liability Act (‘CERCLA’) and similar state statutes, governing remediation of contamination, which could occur or might have occurred at facilities that the company owns or operates, or which it formerly owned or operated, or to which it sends or has sent hazardous substances or wastes for treatment, recycling, or disposal.
The company is required to manage the disposal of hazardous and non-hazardous wastes in compliance with The Resource Conservation and Recovery Act (‘RCRA’) and analogous state laws.
The company is subject to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act, which establishes requirements to protect the health and safety of workers.
Operating a fleet of over 1,500 vehicles, the company is subject to regulation as a motor carrier by the U.S. Department of Transportation (the ‘DOT’) and analogous state agencies, which requires it to comply with a number of federal and state laws and regulations, including the Federal Motor Carrier Safety Regulations and Hazardous Material Regulations for interstate travel, and comparable state regulations for intrastate travel.
Research and Development
The company’s R&D costs were $1.4 during the year ended December 31, 2024.
History
KLX Energy Services Holdings, Inc. was incorporated in Delaware in 2018.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
