Enservco Corporation Updates Investors on 2019 Fourth Quarter and Year-End Financial Expectations
January 10 2020 - 8:56AM
Enservco Corporation (NYSE American: ENSV), a diversified national
provider of specialized well-site services to the domestic onshore
conventional and unconventional oil and gas industries, today
announced it expects 2019 fourth quarter revenue to be between $8.0
million and $8.1 million as compared to $13.3 million in the fourth
quarter last year. Full-year 2019 revenue is expected to be
between $43.0 million and $43.1 million compared to $42.8 million
in 2018. These preliminary revenue estimates have been
adjusted to reflect the discontinuation of water transfer
operations in the fourth quarter of 2019.
Ian Dickinson, President and CEO, said the results reflect a
sharper than anticipated decline in domestic oil and gas well
completion activity and resulting pricing pressure in the fourth
quarter. He added that it is too early in the year-end close
process to provide adjusted EBITDA information.
“The decline in drilling and completion activity accelerated in
the fourth quarter and combined with significant pricing pressure
to result in lower than expected revenue in Q4 and 2019,” said
Dickinson. “As a result, the market share gains we achieved
during 2019 did not translate into improved financial
results. On a positive note, we have seen an uptick in
customer activity in the first 10 days of January and, although it
is still early, we are hopeful that we will achieve a meaningful
increase in sequential quarter revenue. Enservco provides
more than 300 domestic oil and gas producers, including some of the
world’s largest, with mission critical services. We are the
nation’s largest provider of frac water heating and we provide a
variety of complementary services for drilling and completions as
well as maintenance and support.”
In other Company news, Enservco has submitted a business plan to
the NYSE American exchange that outlines the Company’s intention to
regain compliance with listing standards. In addition, as
previously announced in the Company’s third quarter investor
update, in October 2019 Enservco incurred $1.2 million in over
advances above its $29.7 million borrowing base availability on its
bank line of credit. The over advances related to the Company
ramping up to fulfill customer demand for the 2019-20 heating
season. On January 6, 2020, the bank provided Enservco with a
notice of events of default and reservation of rights pertaining to
the Company not having: 1) immediately repaid the over advance; 2)
maintained minimum liquidity of $1.5 million for the months of
October and November 2019; 3) maintained a minimum fixed charge
coverage ratio of 1.1 to 1.0 for the months of October and November
2019. The bank has elected not to exercise, but has not
waived, its right to immediate payment of this over advance and
Enservco continues to work with the bank in seeking to resolve this
issue.
About EnservcoThrough its various operating
subsidiaries, Enservco provides a wide range of oilfield services,
including hot oiling, acidizing, frac water heating, water
transfer, and water hauling. The Company has a broad
geographic footprint covering seven major domestic oil and gas
basins and serves customers in Colorado, Montana, New Mexico, North
Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West
Virginia. Additional information is available at
www.enservco.com
Cautionary Note Regarding Forward-Looking
StatementsThis 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
contained in this release using the terms "may," "expects to," and
other terms 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, 2018, and subsequently filed documents with the
SEC. Forward looking statements in this news release that are
subject to risk include the Company’s ability to report final
financial results that are in line with the aforementioned
estimates and the ability to secure an amendment to its bank loan
agreement; the Company’s ability to resolve the over advance and
defaults on its bank line of credit; and the Company’s ability to
regain compliance with NYSE American listing requirements. It is
important that each person reviewing this release understand the
significant risks attendant to the operations of Enservco.
Enservco disclaims any obligation to update any forward-looking
statement made herein.
Contact:
Jay PfeifferPfeiffer High Investor Relations,
Inc.Direct: 303-880-9000Email: jay@pfeifferhigh.com
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