HOUSTON, March 23, 2020 /PRNewswire/ -- NexTier Oilfield
Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company") today
announced several immediate strategic actions being taken in
response to current market conditions to prioritize financial
strength and cash flow, including a significant reduction in its
2020 capital expenditures program and additional streamlining of
its cost structure.
NexTier is taking actions to significantly reduce and refine its
2020 total capital expenditures, which it now expects to total
between $100 million and
$120 million, subject to market conditions, driven by
strategic innovation investments and maintenance capital
expenditures, and reflecting a reduction of more than 50% at the
midpoint versus its previous outlook of $210
million. The Company continues to expect its 2020 capital
expenditures to be weighted to the first half of 2020, driven by
the delivery of certain strategic innovation investments, with
second half of 2020 spending mainly driven by maintenance. NexTier
is idling a portion of its previously active hydraulic fracturing
fleet in-line with the developing market outlook while narrowing
its innovation and technology investments to focus primarily on
those projects that directly reduce capital expenditures or
operating costs.
In addition, NexTier is further adjusting its organization to
better align with market demand, including right-sizing of overhead
costs, facility consolidation, and variable cost reductions in-line
with activity declines. NexTier will continue to monitor market
conditions and make further adjustments as necessary. These
responsive cost reductions are incremental to the previously
announced synergies resulting from the merger between Keane Group
Inc. and C&J Energy Services, Inc., including $125 million of cost synergies, which remain on
target to be achieved by the end of the second quarter of 2020, and
$80 million of cash synergies, which
remain on target to be achieved before year-end 2020.
NexTier maintains a strong balance sheet position, including no
debt maturities through 2025. To further strengthen financial
strength and flexibility, NexTier has proactively borrowed a
portion of its revolving credit facility availability in recent
days, resulting in cash of greater than $460 million and, in
conjunction with the remaining availability under its revolving
credit facility, current liquidity in excess of
$550 million.
"We are acting decisively and swiftly to protect our financial
strength and flexibility, while upholding our customer commitments
of delivering leading service quality and safety performance," said
Robert Drummond, President and Chief
Executive Officer. "While our proven management system, business
model of partnering with like-minded customers, and talented team
drive differentiation versus peers, we are not immune to the
unprecedented downturn currently facing the industry. In addition
to our immediate response, we maintain additional flexibility to
further flex our platform through further reductions in capex and
cost structure, should market conditions dictate. We have a proven
track-record of making difficult decisions swiftly to best position
NexTier for the long-term. By prioritizing these responsive
actions, I am confident NexTier will continue to distinguish itself
as a leader in U.S. land well completions, while positioning us to
take advantage of future market opportunities as conditions
improve."
NexTier plans to provide a more comprehensive operational and
financial update with the release of its first quarter 2020
results.
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.
Forward-Looking Statements
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 and the Company's guidance
and outlook information, 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, including as a result of OPEC or other foreign
actions that impact worldwide oil 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; (xv) the
duration, impact and severity of the novel coronavirus (COVID-19)
outbreak; and (xvi) 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; the
prompt and effective integration of C&J's businesses into the
Company and the ability to achieve the anticipated synergies and
value-creation contemplated in connection with the merger and with
value-creation contemplated in connection with other divestitures
of assets. For a more detailed discussion of such risks and other
factors, see the Company'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 for the
fiscal year ended December 31, 2019
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 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.
Investor Contact:
Kenneth Pucheu
Senior Vice President – Chief Financial Officer
(713) 325-6000
investors@nextierofs.com
Marc Silverberg
Managing Director (ICR)
marc.silverberg@icrinc.com
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SOURCE NexTier Oilfield Solutions