Triangle Petroleum Corporation (NYSEMKT:TPLM) is selling its fracking subsidiary RockPile Energy Services. The move comes amid price collapse in the oil market that has forced many companies to reduce or put their drilling activities on hold.
Triangle Petroleum Corporation (NYSEMKT:TPLM) is selling RockPile to White Deer Energy, New York-based private equity firm focused on energy investment.
Amid persistently low oil prices, Triangle Petroleum has recently shown indications that it wanted to reduce its exposure to fracking or exit the business altogether. That would explain why Triangle Petroleum decided to spin off RockPile in back in May.
At the time of the spinoff, the talk was that the separation would allow Triangle Petroleum and RockPile to execute on the strategies independently, thus yield more value for shareholders. But it seems that Triangle Petroleum still wasn’t comfortable keeping RockPile around, thus the decision to sell the business.
Financial terms withheld
Triangle Petroleum Corporation (NYSEMKT:TPLM) didn’t reveal how much it is getting from the sale of RockPile. Nevertheless, the company expects the transaction to lower its risk profile given that the subdued oil prices have had material adverse impact on fracking activities.
Commenting on the transaction, RockPile’s CEO, Curt Dacar, said that selling to White Deer was the best deal for the shareholders of the fracking company. He recalled that when the journey of separating RockPile from the parent Triangle Petroleum began, he didn’t image it would result into such great outcome.
Teaming up with White Deer is expected to give RockPile a new lease of life. White Deer says that it has allocated $2.2 billion to invest in energy assets. The firm’s equity investments are usually in the vicinity of $50 million to $150 million.
It is not clear whether White Deer would want to immediately make changes in the management of RockPile after taking control of the fracking business. Mr. Dacar continued leading the business even after it was spun off from Triangle Petroleum Corporation (NYSEMKT:TPLM).