Alaska's largest homegrown company is buying one of the state's leading oil-field service companies.
Arctic Slope Regional Corp. said in a media statement released Wednesday that it will purchase Little Red Services, a company that helps to boost production from existing oil wells. The brief statement included no mention of the sale price.
The acquisition positions ASRC "for long-term growth as North Slope producers seek to increase production as a result of oil tax reform," said Rex Rock Sr., president of ASRC.
Little Red Services, calling itself the state's "premier hot oil company," played a role as major oil producers, such as BP, tried to quickly increase oil production after the passage of an industry tax cut in 2013. The company uses techniques such as "downhole stimulation and intervention" and "well workovers" to squeeze out more oil, and the producers wanted to quickly show they could improve the Slope's declining production, said Doug Smith, the chief executive of Little Red Services, in an interview last fall.
Smith was president last year of the Alaska Support Industry Alliance, which operates an independent expenditure group, We Are Alaska -- No on One, that is fighting efforts to repeal the tax cut. Smith is still listed as a board member.
In the ASRC statement, Smith said ASRC and Little Red "have a shared commitment to the Alaska oil and gas industry, and I believe the combination of oil-tax reform and the financial support of ASRC will allow LRS to expand and improve the services we have provided to North Slope producers for more than three decades."
Annual ASRC revenues have topped $2 billion in recent years. The company was founded as a result of the 1971 Alaska Native Claims Settlement Act that led to the creation of regional corporations to represent Alaska Natives.
ASRC owns ASRC Energy Services, whose website says it's the state's leading provider of "comprehensive" oil and gas services.
"As a wholly-owned subsidiary of ASRC, LRS will be operated separately from ASRC Energy Services, Inc. (AES)," the statement said. "This operating structure will help to protect LRS' brand and allows the management teams at LRS and AES to focus on what they do best."
By ALEX DEMARBAN