Enservco Announces Exit of Colorado Frac Water Heating Business Through Sale of Assets
Enservco (NYSE American: ENSV) has announced the sale of its Colorado-based frac water heating assets to HP Oilfield Services for $1,695,000. This strategic move aligns with Enservco's goal to reduce reliance on seasonal businesses and focus on year-round operations. The transaction proceeds will be used to pay down debt, particularly the Utica Facility. Additionally, Enservco is nearing completion of its acquisition of Buckshot Trucking, , expected to close within days.
The company aims to redirect resources towards the transportation and logistics market in the energy sector. Enservco will continue providing frac water heating and hot oil services in the Marcellus/Utica basins. The company's CEO, Rich Murphy, emphasized that these moves, along with the recently approved Equity Line of Credit facility, support efforts to regain compliance with NYSE American Listing Standards and improve Enservco's financial position.
Enservco (NYSE American: ENSV) ha annunciato la vendita dei suoi attivi per il riscaldamento dell'acqua frac basati in Colorado a HP Oilfield Services per 1.695.000 dollari. Questa mossa strategica è coerente con l'obiettivo di Enservco di ridurre la dipendenza da attività stagionali e concentrarsi sulle operazioni durante tutto l'anno. I proventi della transazione saranno utilizzati per ridurre i debiti, in particolare quello relativo all'Utica Facility. Inoltre, Enservco è vicino al completamento dell'acquisizione di Buckshot Trucking, che dovrebbe chiudere entro pochi giorni.
L'azienda mira a riallocare le risorse verso il mercato del trasporto e della logistica nel settore energetico. Enservco continuerà a fornire servizi di riscaldamento dell'acqua frac e di olio caldo nelle formazione di Marcellus/Utica. Il CEO dell'azienda, Rich Murphy, ha sottolineato che queste mosse, insieme alla recente approvazione della linea di credito azionaria, supportano gli sforzi per riacquisire la conformità agli standard di quotazione di NYSE American e migliorare la posizione finanziaria di Enservco.
Enservco (NYSE American: ENSV) ha anunciado la venta de sus activos de calentamiento de agua frac en Colorado a HP Oilfield Services por 1,695,000 dólares. Este movimiento estratégico se alinea con el objetivo de Enservco de reducir la dependencia de negocios estacionales y enfocarse en operaciones durante todo el año. Los ingresos de la transacción se utilizarán para disminuir la deuda, en particular la relacionada con la Instalación de Utica. Además, Enservco está cerca de completar la adquisición de Buckshot Trucking, que se espera cierre en pocos días.
La compañía busca redirigir recursos hacia el mercado de transporte y logística en el sector energético. Enservco continuará ofreciendo servicios de calentamiento de agua frac y aceite caliente en las cuencas de Marcellus/Utica. El CEO de la compañía, Rich Murphy, enfatizó que estos movimientos, junto con la línea de crédito de capital recientemente aprobada, apoyan los esfuerzos para volver a cumplir con los estándares de cotización de NYSE American y mejorar la posición financiera de Enservco.
Enservco (NYSE American: ENSV)가 콜로라도에 기반을 둔 수압 파쇄수 난방 자산을 HP Oilfield Services에 1,695,000달러에 판매한다고 발표했습니다. 이번 전략적 결정은 Enservco의 계절적 사업 의존도를 줄이고 연중 운영에 집중하려는 목표와 일치합니다. 이번 거래 수익은 특히 Utica 시설의 부채 상환에 사용될 것입니다. 또한 Enservco는 Buckshot Trucking 인수를 거의 완료했으며, 이는 며칠 안에 마무리될 예정입니다.
회사는 에너지 분야의 운송 및 물류 시장으로 자원을 재편할 계획입니다. Enservco는 Marcellus/Utica 분지에서 수압 파쇄수 난방 및 뜨거운 오일 서비스를 계속 제공할 것입니다. 회사의 CEO인 Rich Murphy는 이러한 조치와 최근 승인된 자본 신용 한도가 NYSE American 상장 기준 준수를 회복하고 Enservco의 재정적 위치를 개선하기 위한 노력에 도움이 된다고 강조했습니다.
Enservco (NYSE American: ENSV) a annoncé la vente de ses actifs de chauffage d'eau frac basés au Colorado à HP Oilfield Services pour 1 695 000 dollars. Ce mouvement stratégique s'aligne avec l'objectif d'Enservco de réduire sa dépendance aux activités saisonnières et de se concentrer sur des opérations tout au long de l'année. Les recettes de cette transaction seront utilisées pour rembourser des dettes, en particulier celles liées à l'installation d'Utica. De plus, Enservco est sur le point de finaliser l'acquisition de Buckshot Trucking, qui devrait être conclue dans quelques jours.
L'entreprise vise à réorienter ses ressources vers le marché du transport et de la logistique dans le secteur de l'énergie. Enservco continuera de fournir des services de chauffage d'eau frac et d'huile chaude dans les bassins de Marcellus/Utica. Le PDG de l'entreprise, Rich Murphy, a souligné que ces mouvements, accompagnés de la ligne de crédit en capital récemment approuvée, soutiennent les efforts visant à retrouver la conformité avec les normes de cotation de NYSE American et à améliorer la position financière d'Enservco.
Enservco (NYSE American: ENSV) hat den Verkauf seiner auf Colorado basierenden Frac-Wasserheizungsanlagen an HP Oilfield Services für 1.695.000 US-Dollar angekündigt. Dieser strategische Schritt steht im Einklang mit Enservco's Ziel, die Abhängigkeit von saisonalen Geschäften zu verringern und sich auf das ganzjährige Geschäft zu konzentrieren. Die Erlöse aus der Transaktion werden zur Tilgung von Schulden verwendet, insbesondere im Hinblick auf die Utica-Anlage. Darüber hinaus steht Enservco kurz vor dem Abschluss der Übernahme von Buckshot Trucking, die innerhalb weniger Tage abgeschlossen werden soll.
Das Unternehmen plant, Ressourcen auf den Transport- und Logistikmarkt im Energiesektor umzuleiten. Enservco wird weiterhin Frac-Wasserheizungs- und Heißöl-Dienstleistungen in den Marcellus/Utica-Becken anbieten. Der CEO des Unternehmens, Rich Murphy, betonte, dass diese Schritte, zusammen mit der kürzlich genehmigten Kapital-Kreditlinie, die Bemühungen unterstützen, die Einhaltung der NYSE American-Notierungsstandards wiederherzustellen und Enservco's finanzielle Lage zu verbessern.
- Sale of Colorado frac water heating assets for $1,695,000, reducing reliance on seasonal business
- Proceeds from the sale to be used for debt reduction, specifically the Utica Facility
- Nearing completion of Buckshot Trucking acquisition, expected to be immediately accretive
- Strategic shift towards year-round cash flows and margin generation in transportation and logistics
- Approved Equity Line of Credit facility to support financial improvements
- Divestment of a business segment may lead to short-term revenue reduction
- Ongoing efforts to regain compliance with NYSE American Listing Standards indicate previous non-compliance issues
Insights
Enservco's sale of Colorado frac water heating assets for
The debt reduction focus, particularly targeting the Utica Facility, is crucial. However, the exact impact on the balance sheet remains unclear without specific debt figures. The planned debt restructuring could significantly improve Enservco's financial health, potentially lowering interest expenses and enhancing profitability.
Investors should monitor the Buckshot acquisition's closure and its immediate accretive effect. The company's transition to logistics services in the energy sector could diversify revenue sources, but execution risks remain. The approval of the Equity Line of Credit facility provides additional financial flexibility, which is positive for future growth initiatives.
Enservco's strategic pivot is a response to market dynamics in the energy services sector. By exiting the seasonal Colorado frac water heating business, the company is aligning itself with more stable, year-round demand in transportation and logistics. This move could potentially smooth out revenue fluctuations and improve predictability for investors.
The pending Buckshot Trucking acquisition is particularly intriguing. It represents a diversification play into the broader energy logistics market, which could offer more consistent cash flows and potentially higher margins. However, success will depend on Enservco's ability to integrate and leverage Buckshot's operations effectively.
The company's efforts to regain NYSE American Listing Standards compliance are critical for maintaining investor confidence and access to capital markets. The approved Equity Line of Credit facility provides a financial cushion, but its utilization and impact on share dilution should be closely monitored by investors.
Enservco's asset sale and pending acquisition reflect a bold strategic realignment. By divesting seasonal operations and entering the logistics market, the company is attempting to create a more resilient business model. This strategy could lead to improved operational efficiency and financial stability if executed well.
The focus on debt reduction and restructuring is prudent, potentially leading to a healthier balance sheet and improved financial flexibility. However, the success of this strategy hinges on the seamless integration of Buckshot Trucking and the company's ability to capitalize on synergies in the energy logistics sector.
The management's emphasis on shareholder value and NYSE compliance demonstrates a commitment to corporate governance and investor relations. However, the transition period may bring short-term volatility as the company adjusts to its new business mix. Investors should watch for key performance indicators in upcoming quarters to gauge the effectiveness of this strategic shift.
Acquisition of Buckshot Trucking, LLC on Track to Close Within Days
- Sale of Assets from Seasonal Colorado Frac Water Heating Business Consistent with Enservco Strategy to Focus Efforts on Year-Round Businesses including Opportunities Afforded by Pending Buckshot Acquisition
- Net Proceeds from Transaction to be Used to Pay Down Debt Under Utica Facility
- Significantly Reduces Company’s Debt Burden and Paves Way for Debt Restructuring
LONGMONT, Colo., Aug. 09, 2024 (GLOBE NEWSWIRE) -- Enservco Corporation (NYSE American: ENSV) (“Enservco” or the “Company”) today announced it has sold to HP Oilfield Services, LLC (“HP”) certain Colorado based assets of Heat Waves Hot Oil Service, LLC, a wholly owned subsidiary of Enservco (the “Transaction”).
Transaction consideration from HP was
The Company also announced that it is nearing completion of the previously announced acquisition of Buckshot Tucking, LLC with closing expected within days.
TRANSACTION RATIONALE/HIGHLIGHTS & OTHER UPDATES
- Sale of Colorado frac water heating assets is consistent with strategy of being less reliant on seasonal-focused business;
- Net proceeds to be used to pay down certain of the Company’s debt obligations, specifically its Utica Facility. Following the pay down, the Company expects to restructure the remaining Utica Facility;
- Divesting the heating business allows Enservco to redirect its resources, both financial and managerial, towards the transportation and logistics market servicing the broad energy sector;
- Includes the previously announced and pending Buckshot Acquisition, which is expected to be immediately accretive and strategically transform the Company by entering the logistics market via a business with substantial operational and financial visibility; and
- The Company will continue to provide both frac water heating and hot oil services across the Marcellus/Utica basins, where last year’s Rapid Hot acquisition contributed to significantly improved operating results in the region.
MANAGEMENT COMMENTARY
Rich Murphy, Chairman and CEO of Enservco, commented, “For more than a year, we have undergone a significant review of our business portfolio to identify, evaluate and execute on initiatives to drive increased efficiencies and other improvements throughout our operations. Concurrent with these activities, we spent considerable time and effort improving our financial position while we also evaluated various opportunities to enhance our value proposition both in the marketplace and with investors. I am pleased that our team – with the full support of our Board – continues to make significant progress on multiple fronts. This includes the previously announced Buckshot Acquisition and the Company’s Equity Line of Credit facility (“ELOC”), which has now been approved by a majority of the shareholders and is being implemented. The Buckshot transaction, the ELOC, and additional steps the Company is engaged in support our ongoing efforts to regain compliance with NYSE American Listing Standards.”
Mr. Murphy, continued, “With the sale of our Colorado frac water heating assets, we plan to use the net proceeds from the Transaction to pay down our higher-interest borrowings, specifically those under our Utica Facility. Following the pay down, we expect to work with Utica, or other lenders if needed, to renegotiate the remaining balance under the Utica Facility to terms that will further improve Enservco’s financial position.”
Mr. Murphy, concluded, “Today’s announcement represents another significant step in our process of transitioning our business portfolio away from one with a significant focus on seasonal industry activities to a much larger addressable market providing year-round cash flows and margin generation. Combined with today’s announcement and our successes over the past year, we believe we have placed the Company in a stronger position to drive near and long-term value for shareholders. We appreciate the continued support of all our stakeholders – especially our employee team – and look forward to keeping everyone apprised of our progress.”
ABOUT ENSERVCO
Enservco provides a range of oilfield services through its various operating subsidiaries, including hot oiling, acidizing, frac water heating, and related services in major domestic oil and gas basins across the United States. Additional information is available at www.enservco.com. On March 20, 2024, the Company announced an agreement to purchase Buckshot Trucking LLC, an energy logistics provider in multiple key oil and gas basins (the “Buckshot Acquisition”). The Buckshot Acquisition is scheduled to close in the third quarter of 2024. When closed, the Buckshot Acquisition would provide Enservco with a growing business that is not weather dependent, allow the Company to enter steady year-round logistics, provide an expanded operating footprint, and improve cash flow visibility.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains information that is "forward-looking" in that it describes events and conditions Enservco reasonably expects to occur in the future. Expectations for the future performance of Enservco are dependent upon a number of factors, and there can be no assurance that Enservco will achieve the results as contemplated herein. Certain statements denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond Enservco's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in Enservco’s annual report on Form 10-K for the year ended December 31, 2023, and subsequently filed documents with the Securities and Exchange Commission (“SEC”). Forward looking statements in this news release that are subject to risks also include (a) closing of the Buckshot Acquisition on anticipated terms and timing, and the ability of Enservco to successfully integrate Buckshot’s market opportunities, personnel and operations and to achieve expected benefit; and (b) our ability to further transform into a logistics business; (c) the ability to restructure our debt; and (d) the ability to maintain compliance with the NYSE/American Stock Market. Enservco disclaims any obligation to update any forward-looking statement made herein.
CONTACT
Mark Patterson
Chief Financial Officer
Enservco Corporation
mpatterson@enservco.com
FAQ
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