NexTier Oilfield Solutions Cuts CapEx in Half
Houston-based NexTier Oilfield Solutions Inc. is refining its 2020 total capital expenditures, which it now expects to be between $100- and $120 million, subject to market conditions. The update is a reduction of more than 50% at the midpoint versus its previous outlook of $210 million.
The land oilfield service company is idling a portion of its previously active hydraulic fracturing and narrowing its innovation and tech investments to focus primarily on projects that reduce capital spend or operating costs. In addition, it is 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 has no debt maturities through 2025. For additional financial strength and flexibility, it recently borrowed a portion of its revolving credit facility 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."
“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."
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