U.S. Well Services, Inc. (NASDAQ: USWS) (“USWS” or the “company”)
today announced an expansion of its borrowing capacity with the
addition of a $75 million second lien delayed draw credit facility
provided by Piper Jaffray Finance, LLC and an amendment to its
existing first lien credit facility. The company will have
access to up to $140 million of liquidity under its credit
facilities, which will help manage the growth associated with the
company’s electric frac fleet rollout.
As previously announced, USWS expects to deploy three of its
next generation proprietary newbuild electric frac spreads in the
first half of 2019 under term contracts. Contract discussions
continue to advance with additional potential and current
customers, and USWS plans to assemble new fleets as contracts are
awarded. USWS has secured the long-lead lead items required to
successfully deploy additional new build electric frac fleets in
2019, beyond the three currently under construction.
Business Update and Outlook
USWS recently completed a strategic realignment by relocating
several fleets from the northeast to the Permian basin and Eagle
Ford trend to better match current customer demand. Primarily
as a result of the company’s strategic realignment and the
slow-down of completion activity in North America, USWS expects its
full year 2018 Adjusted EBITDA1 to be 10% to 15% below its most
previously provided guidance range.
In 2019, USWS expects average Adjusted EBITDA per fleet of $15.0
to 16.0 million1 with an average of 13 to 14 fleets deployed. Over
90% of the company’s projected 2019 Adjusted EBITDA is either
contracted or committed. USWS expects to begin operating three of
its proprietary newbuild electric frac fleets under contract in the
first half of the year. Three fleets are expected to be
working in the northeast in 2019.
“Securing this incremental financing is a key piece of USWS’
strategic plan to maintain sufficient liquidity and financial
flexibility as we continue the deployment of our contracted
newbuild electric fleets to meet rising customer demand,” commented
Kyle O’Neill, Chief Financial Officer. “The strategic realignment
of our fleets improves our ability to meet customer demand in the
most active markets. We are excited about signing our recent
newbuild electric frac fleet contract with Apache in the Permian
basin, which we announced last week.”
The second lien credit facility and the amended first lien
credit facility mature May 31, 2020 and contain typical financial
ratio covenants. The company will file full descriptions of the
amendment to the first lien credit agreement and the second lien
credit agreement with the Securities and Exchange Commission on a
Current Report on Form 8-K.
1 Adjusted EBITDA is a non-GAAP measure that is defined and
discussed under “Non-GAAP Measures” at the end of this release.
About U.S. Well Services, Inc.U.S. Well
Services, Inc. is a leading provider of hydraulic fracturing
services and a market leader in electric fracture stimulation.
USWS’ patented electric frac technology provides one of the first
fully electric, mobile well stimulation systems powered by locally
supplied natural gas including field gas sourced directly from the
wellhead. USWS’ electric frac technology dramatically decreases
emissions and sound pollution while generating exceptional
operational efficiencies including significant customer fuel cost
savings versus conventional diesel fleets. For more information
visit: www.uswellservices.com.
Contact U.S. Well Services,
Inc.
Kyle O’NeillChief Financial
Officer832-562-3730IR@uswellservices.com
About Piper Jaffray Finance LLC Piper Jaffray
Finance, LLC is a wholly owned subsidiary of Piper Jaffray
Companies (NYSE - PJC) that provides middle-market loans of between
$75 million and $350 million to Piper Jaffray clients.
Forward-Looking StatementsThe information above
includes “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, included herein
concerning, among other things, availability under the company’s
credit facilities, benefits obtained from the refinancing, the
company’s financial position and liquidity, business strategy and
objectives for future operations, results of discussions with
potential customers and planned deployment and operation of fleets,
are forward-looking statements. These forward-looking statements
may be identified by their use of terms and phrases such as “may,”
“expect,” “guidance,” “estimate,” “project,” “plan,” “believe,”
“intend,” “achievable,” “anticipate,” “will,” “continue,”
“potential,” “should,” “could,” and similar terms and phrases.
Although the company believes that the expectations reflected in
these forward-looking statements are reasonable, they do involve
certain assumptions, risks and uncertainties. These forward-looking
statements represent the company’s current expectations or beliefs
concerning future events, and it is possible that the results
described in this release will not be achieved. These
forward-looking statements are subject to certain risks,
uncertainties and assumptions identified in this release or as
disclosed from time to time in the company’s filings with the
Securities and Exchange Commission (the “SEC”). Factors that could
cause actual results to differ from the company’s expectations
include changes in market conditions, changes in commodity prices,
changes in supply and demand for oil and gas and our services,
availability of financing and capital, the company’s liquidity, the
company’s compliance with covenants under its credit agreements,
geopolitical events, availability of equipment and personnel and
other factors described in USWS’ filings with the SEC, including
those described under “Risk Factors” in our current report on Form
8-K filed with the SEC on November 16, 2018. As a result of these
factors, actual results may differ materially from those indicated
or implied by forward-looking statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, the company does
not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. New factors emerge from time to time,
and it is not possible for us to predict all such factors.
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA are non-GAAP financial measures and
should not be considered as a substitute for net income (loss),
operating income (loss) or any other performance measure derived in
accordance with United States generally accepted accounting
principles (“GAAP”) or as an alternative to net cash provided by
operating activities as a measure of USWS’ profitability or
liquidity. USWS’ management believes EBITDA and Adjusted EBITDA are
useful because they allow external users of its consolidated
financial statements, such as industry analysts, investors, lenders
and rating agencies, to more effectively evaluate its operating
performance, compare the results of its operations from period to
period and against USWS’ peers without regard to USWS’ financing
methods, hedging positions or capital structure and because it
highlights trends in USWS’ business that may not otherwise be
apparent when relying solely on GAAP measures. USWS presents EBITDA
and Adjusted EBITDA because it believes EBITDA and Adjusted EBITDA
are important supplemental measures of its performance that are
frequently used by others in evaluating companies in its industry.
Because EBITDA and Adjusted EBITDA exclude some, but not all, items
that affect net income (loss) and may vary among companies, the
EBITDA and Adjusted EBITDA USWS presents may not be comparable to
similarly titled measures of other companies. USWS defines EBITDA
as earnings before interest, income taxes, depreciation and
amortization. USWS defines Adjusted EBITDA as EBITDA excluding the
following: loss on disposal of assets; non-productive time;
unit-based compensation; fleet start-up and relocation costs;
restructuring and transaction related costs; and impairment loss.
USWS is unable to provide a quantitative reconciliation of
forward-looking Adjusted EBITDA to net income, its most directly
comparable forward-looking GAAP measure, for the periods shown in
this release, because management cannot reliably predict certain of
the necessary components of such forward-looking GAAP measure.
Source: U.S. Well Services, Inc.
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