West Texas Oilfield Developments: China Stake & Permian Tank Redux

Two recent developments in the West Texas oil sector may be instructive.  One, a Chinese company purchased a significant chunk of Pioneer Natural Resources stake in the Wolfcamp Shale for $1.7 billion.  It seems domestic sources could fuel China's energy needs.

Two, a new tank manufacturer will locate in Harriet, between San Angelo and Miles.

Kelly Womack, owner of the company, bought 51 acres of farmland and will build the facility on 6 acres, leaving room for expansion. The plant will first manufacture steel and fiberglass storage tanks and later produce additional equipment used in the oil and gas industry, such as separators, heater treaters and gunbarrels.

Womack’s late father, Glen, started Permian Tank & Manufacturing in Odessa in 1975 and sold the company in 2007. Now Kelly and Curtis feel like it’s time to get back into the business. 

“We’ve got good connections and friends in the industry and we know a lot of people,” Pittman said. “This factory has a lot of possibilities to grow.”

The Carlyle Group and joint venture energy partner bought Permian Tank for $50 million.  They also own Three Rivers Energy.  Carlyle withdrew its registration seeking to take the company public. 

I wonder how Hirschfeld Steel will take the competition from Womack Tank & Manufacturing, given both aim to be steel manufacturing facilities for the oil and gas industry  Like Permian Tank, Hirschfeld has private equity ties.  Hirschfeld's owners see major growth in tanks.  Might Womack garner Insight funding or an eventual buyout?