Basic Energy Services, Inc. (NYSE:BAS) Files An 8-K Entry into a Material Definitive Agreement

On December 9, 2019, Basic Energy Services, Inc., a Delaware corporation (“Basic” or the “Company”), received consent to Section 7.05(e) under the ABL Credit Agreement, dated as of October 2, 2018 (the “Credit Agreement”) among the Company, as borrower, the financial institutions from time to time party thereto as lenders and Bank of America, N.A., in its capacity as administrative agent (in such capacity, the “Administrative Agent”), to sell assets in amounts exceeding $25 million and up to $70 million, effective for the fiscal year ending December 31, 2020 and solely in connection with upcoming sales of its pressure pumping assets, as described below. Under Section 7.05(e) of the Credit Agreement, the Administrative Agent may increase the Credit Agreement’s dollar limitation for asset sales. The Credit Agreement has not been modified otherwise.

Item 7.01 Regulation FD Disclosure.

On December 12, 2019, the Company issued a press release announcing the Company’s decision to divest of its pressure pumping assets. A copy of the press release is being furnished as Exhibit 99.1 hereto and is incorporated into this Item 7.01 by reference.

The information furnished to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of Basic’s under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 8.01 Other Events.

On December 10, 2019, the Board of Directors of the Company approved a plan by the Company to divest of its pressure pumping assets, not inclusive of coiled tubing, in one or more transactions. As a result of the divestitures, the Company expects to record a non-cash impairment charge of approximately $50 million in the fourth quarter of 2019 to write down the value of the pumping assets. The divestiture is designed to strengthen the Company’s remaining production businesses of well servicing and water logistics. The Company plans to complete all work currently in process, after which the Company will terminate its pumping and pumping-related services. Real estate and equipment is expected to be sold in multiple transactions in the fourth quarter of 2019 and the first quarter of 2020. The Company’s coiled tubing business is not expected to be impacted by the divestiture of the Company’s pressure pumping assets.

Cautionary Note Regarding Forward-Looking Statements

Many of the statements included or incorporated in this Current Report on Form 8-K and the furnished exhibit constitute “forward-looking statements.” In particular, they include statements relating to future actions, strategies, future operating and financial performance, and Basic’s future financial results. These forward-looking statements are based on current expectations and projections about future events. Readers are cautioned that forward-looking statements are not guarantees of future operating and financial performance or results and involve substantial risks and uncertainties that cannot be predicted or quantified, and, consequently, the actual performance of Basic may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, factors described from time to time in Basic’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein).

Item 9.01 Financial Statements and Exhibits.

BASIC ENERGY SERVICES, INC. Exhibit
EX-99.1 2 a2019-12x11partridgepressr.htm EXHIBIT 99.1 Exhibit Exhibit 99.1 NEWS RELEASE                              Contact:Trey Stolz Director,…
To view the full exhibit click here

About Basic Energy Services, Inc. (NYSE:BAS)

Basic Energy Services, Inc. provides a range of well site services in the United States to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services, well servicing and contract drilling. The Company operates through the segment, which include Completion and Remedial Services, Fluid Services, Well Servicing and Contract Drilling. The Company’s operations are managed regionally and are concentrated in the United States onshore oil and natural gas producing regions located in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, California, Ohio and Pennsylvania. Its operations are focused on liquids-rich basins, as well as natural gas-focused shale plays characterized by prolific reserves. It has a presence in the Permian Basin and the Bakken, Eagle Ford, Haynesville and Marcellus shales.