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Oil & Gas Services Company

Oil & Gas Services Company

SITUATION

  • A publicly traded, national provider of oil field services was experiencing a drop in revenue due to severe commodity price declines which reduced oil & natural gas well completions by 51% in 2015 Q4 and 35% year-over-year 2015 vs. 2014.
  • After the company had exhausted its $40 million revolver, the lender became concerned that the company was on the brink of a liquidity crisis.
  • In addition to declining prices, the Company was further constrained by an upcoming equipment appraisal, which was expected to decrease equipment value by 15-20% and further reduce liquidity.
  • SCP was engaged by the lender to perform an expedited assessment on the Company’s viability.

SCP'S SOLUTION

  • SCP moved quickly to review the Company's public information, established contact with the company’s management team and participated in collaborative informational calls with the company’s financial principals.
  • SCP’s team developed factual, relevant analytical data across business lines reflecting both company cost improvements, lapses in financial management (e.g. non-recognition of troubling customer A/R concentrations) and identified hard asset security concerns.

RESULT

  • SCP delivered targeted recommendations to reduce overhead and protect margin in the face of a declining prices.
  • The Company took our recommendations, specially pertaining to cost savings and liquidity improvement initiatives to stabilize the business.