William B. Cassidy, Senior Editor | Jun 04, 2012 11:52AM EDT
Bulk trucking giant Quality Distribution expanded further into the oil and gas shale business, completing its acquisition of Wylie Bice Trucking of North Dakota.
The acquisition is the second energy-related trucking purchase by Quality this year, following the acquisition of Trojan Vacuum Services in April.
Killdeer-based Wylie Bice provides trucking services to the shale oil and gas industry in the Bakken shale region, hauling water and oil for energy customers.
Quality paid about $79 million for Wylie Bice, including RM Resources, which owns owns and operates four wastewater disposal wells in North Dakota.
The company will pay $19 million more if Wylie Bice hits certain performance targets. The Bice and RM operations had about $106 million in revenue in 2011.
With two terminals in North Dakota and about 500 drivers, Wylie Bice is one of the largest haulers of fresh and disposal water and oil in the Bakken shale.
Quality Distribution, a $746 million tank truck operator, is rapidly expanding its energy business after entering the oil and gas shale energy market last year.
Most of Quality's revenue, 80.5 percent, comes from chemical transportation, and 15.4 percent from intermodal, but energy contributed 4.1 percent in 2011.
That $30.4 million in energy-related revenue added to the company’s top line last year helped Quality recover from a 2010 loss and post a $23.4 million profit.
The hydraulic fracturing or fracking business, which extracts oil and natural gas from shale deposits, is a growing and lucrative market for trucking companies.
Truckload giant Schneider National launched a division last September to support energy companies extracting oil and natural gas through fracking.
Companies engaged in hydraulic fracturing or “fracking” use a high-pressure mixture of water, sand and chemicals to fracture shale, releasing oil and natural gas.
Although the process is controversial, fracking accounts for more than 30 percent of U.S. natural gas production, according to the Department of Energy.
Trucks and drivers are needed to haul sand, cement and water to fracking sites and transport crude oil and condensate as well as wastewater from the operations.
In April, Quality purchased Trojan Vacuum Services, expanding its reach into the Eagle Ford Shale region of South Texas, where Trojan hauls water.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
