HOUSTON, March 9, 2020 /PRNewswire/ -- NexTier
Oilfield Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company")
today announced the sale of its Well Support Services ("WSS")
segment to Basic Energy Services, Inc. ("Basic") for total
consideration of $93.7 million.
The sale includes the Company's rig services, special
services and fluids management businesses. The transaction
was simultaneously signed and closed on March 9, 2020.
"We are excited to announce the sale of our Well Support
Services segment to Basic Energy Services, a leader in well support
and production services," said Robert
Drummond, President and Chief Executive Officer of NexTier.
"With the strategic divestiture of this non-core business, we
further streamline NexTier's operations and resources, driving even
greater focus on our core competencies, and supporting our mission
of accelerating customer production while lowering their cost per
BOE. This transaction further solidifies NexTier as one of
the largest U.S. land focused completions companies, and positions
us to further differentiate on service quality, safety and
innovation. By completing this transaction, we extend our
team's track-record of acting decisively, executing on our
commitments, and generating long-term value."
Total consideration of $93.7
million is comprised of $59.35
million of cash received at closing and $34.35 million of par value senior secured notes
("Notes") previously issued by Basic. Under the terms of the
agreement, the Notes are accompanied by a make-whole guarantee
at par value, which guarantees the payment of $34.35 million to NexTier after the Notes are
held to the one year anniversary of March 9,
2021. The cash equivalent make-whole is issued under a
fund guarantee by Ascribe Capital, LLC, a private investment firm
with approximately $3 billion in
assets under management. Under terms of the agreement,
NexTier is permitted to sell the Notes at any time prior to the one
year anniversary without the make-whole guarantee protection.
In the event of a Basic restructuring or a credit rating
downgrade in conjunction with a change in control prior to the one
year anniversary, the make-whole guarantee accelerates the Notes to
par value of $34.35 million.
NexTier is entitled to semi-annual interest payments on the
Notes based on the 10.75% annual coupon throughout the holding
NexTier expects the transaction to result in incremental annual
savings of an estimated $6 million in
selling, general and administrative expenses, and the elimination
of approximately $20 million of
annual capital expenditures. NexTier headcount will be
reduced by approximately 1,800 employees with Basic's
acquisition and absorption of WSS operations. Pro forma for
the sale, NexTier will operate two business segments, which include
the Completions Services segment, comprised of hydraulic
fracturing, wireline and pumpdown services, and the Well
Construction and Intervention Services segment, comprised of coiled
tubing and cementing services.
"We remain committed to directing capital to the highest return
opportunities," said Kenneth Pucheu,
Senior Vice President and Chief Financial Officer of NexTier.
"The strategic sale of our Well Support Services segment
strengthens our liquidity position and further enables us to invest
in value generating opportunities, including capital return and
additional investment in innovation where we see attractive returns
and value. The transaction effectively brings forward
approximately five years of estimated free cash flow from the Well
Support Services business, and at a very opportunistic time.
Proceeds received from the divestiture increase our financial
flexibility, and now that the deal is completed and the purchase
window is open, we plan to evaluate market conditions to
potentially buy back NexTier common stock under our previously
announced capital return program."
"We are excited for our former Well Support Services
employees, as this transaction will provide greater opportunities
for their career growth and development," continued Mr. Drummond.
"We look forward to them extending their history of providing
strong service quality and safety and to continue building upon
their success and reputation within an organization fully-dedicated
to well servicing. Further, we will work closely with Basic
to ensure a smooth transition. We are excited that
Jack Renshaw, former Senior Vice
President of Well Support Services at NexTier, will join Basic's
executive management team and continue to deliver the same level of
safety performance and service quality that our customers
An updated investor presentation is available in the Investor
Relations section of NexTier's corporate website.
Fourth Quarter 2019 Conference Call
As previously announced, NexTier will issue its fourth quarter
2019 financial and operating results on Tuesday, March 10, 2020, after the market close.
In conjunction with this release, the NexTier executive
management team will host a conference call on March 11, 2020 at 7:30
a.m. Central Time (8:30 a.m. Eastern
Time). Interested parties may listen to the conference
call via a live webcast accessible on our website at
www.nextierofs.com or by calling U.S. (Toll Free): 1-855-560-2574
or International: 1-412-542-4160 and asking for the "NexTier
Oilfield Solutions' Earnings Call." An archive of the webcast
will be available shortly after the call on our website at
www.nextierofs.com for twelve months following the call. A
replay of the call will also be available for one week by calling
U.S. (Toll Free): 1-877-344-7529 or International: 1-412-317-0088,
using the access code: 10138991.
Evercore Group LLC served as NexTier's financial advisor, and
King & Spaulding acted as the Company's legal advisor.
About NexTier Oilfield Solutions
Headquartered in Houston,
Texas, NexTier is an industry-leading U.S. land oilfield
service company, with a diverse set of well completion and
production services across the most active and demanding basins.
Our integrated solutions approach delivers efficiency today,
and our ongoing commitment to innovation helps our customers better
address what is coming next. NexTier is differentiated
through four points of distinction, including safety performance,
efficiency, partnership and innovation. At NexTier, we
believe in living our core values from the basin to the boardroom,
and helping customers win by safely unlocking affordable, reliable
and plentiful sources of energy.
About Basic Energy Services, Inc.
Basic Energy Services provides wellsite services essential to
maintaining production from the oil and gas wells within its
operating areas. The Company's operations are managed
regionally and are concentrated in major United States onshore oil-producing regions
located in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North
Dakota, California and
Colorado. Our operations are
focused in liquids-rich basins that have historically exhibited
strong drilling and production economics in recent years with a
significant presence in the Permian Basin, Powder River Basin, and the Bakken, Eagle
Ford, and Denver-Julesburg shales. We provide our
services to a diverse group of over 2,000 oil and gas companies.
Additional information is available on the Company's website
About Ascribe Capital, LLC
Ascribe Capital is a private investment firm managing
approximately $3 billion of long-term
capital focused on investing in the debt and equity securities of
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties and are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act
of 1993, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended. Where a forward-looking statement expresses or
implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. The words "believe," "continue,"
"could," "expect," "anticipate," "intends," "estimate," "forecast,"
"project," "should," "may," "will," "would" or the negative thereof
and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond the Company's control.
Statements in this press release regarding the Company that are
forward-looking, including projections as to the anticipated
benefits of the transaction, the impact of the proposed transaction
on the Company's business and future financial and operating
results, are based on management's estimates, assumptions and
projections, and are subject to significant uncertainties and other
factors, many of which are beyond the Company's control. These
factors and risks include, but are not limited to, (i) the
competitive nature of the industry in which the Company conducts
its business, including pricing pressures; (ii) the ability to meet
rapid demand shifts; (iii) the impact of pipeline capacity
constraints and adverse weather conditions in oil or gas producing
regions; (iv) the ability to obtain or renew customer contracts and
changes in customer requirements in the markets the Company serves;
(v) the ability to identify, effect and integrate acquisitions,
joint ventures or other transactions; (vi) the ability to protect
and enforce intellectual property rights; (vii) the effect of
environmental and other governmental regulations on the Company's
operations; (viii) the effect of a loss of, or interruption in
operations of, one or more key suppliers, including resulting from
product defects, recalls or suspensions; (ix) the variability of
crude oil and natural gas commodity prices; (x) the market price
and availability of materials or equipment; (xi) the ability to
obtain permits, approvals and authorizations from governmental and
third parties; (xii) the Company's ability to employ a sufficient
number of skilled and qualified workers to combat the operating
hazards inherent in the Company's industry; (xiii) fluctuations in
the market price of the Company's stock; (xiv) the level of, and
obligations associated with, the Company's indebtedness; and (xv)
other risk factors and additional information. In addition,
material risks that could cause actual results to differ from
forward-looking statements include: the inherent uncertainty
associated with financial or other projections. For a more detailed
discussion of such risks and other factors, see the Company's and
C&J's filings with the Securities and Exchange Commission (the
"SEC"), including under the heading "Risk Factors" in Item 1A of
the Company's Annual Report on Form 10-K and Form 10-K/A for the
fiscal year ended December 31, 2018,
filed on February 27, 2019 and
August 19, 2019, respectively, and in
other periodic filings, available on the SEC website or
www.NexTierOFS.com. The Company assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates, to reflect events or circumstances after the date
of this press release, or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued "forward-looking statement"
constitutes a reaffirmation of that statement.
Vice President – Investor Relations
Managing Director (ICR)
View original content to download
SOURCE NexTier Oilfield Solutions