Enservco(US:ENSV) GlobeNewswire News Room·2024-08-09 10:45Core Viewpoint - Enservco Corporation has sold certain assets from its seasonal Colorado frac water heating business to HP Oilfield Services, aligning with its strategy to focus on year-round business opportunities, particularly through the pending acquisition of Buckshot Trucking, LLC [1][3] Financial Transaction Details - The transaction consideration from HP was $1,695,000, comprising $1,221,625 in cash and a short-term note of $473,375, which will be paid over five months from October 1, 2024, to February 1, 2025 [2] - Net proceeds from the transaction are intended for debt retirement, specifically targeting borrowings under the Company's Utica Facility [2][3] Strategic Rationale - The sale of the Colorado frac water heating assets is part of a strategy to reduce reliance on seasonal business and redirect resources towards the transportation and logistics market servicing the energy sector [3] - The acquisition of Buckshot Trucking is expected to be immediately accretive and strategically transform the Company by entering the logistics market, enhancing operational and financial visibility [3][5] Management Commentary - The Company has been reviewing its business portfolio to enhance efficiencies and improve its financial position, with the sale of the heating assets being a significant step in transitioning towards a year-round cash flow model [4] - The net proceeds from the asset sale will be used to pay down higher-interest borrowings under the Utica Facility, with plans to renegotiate remaining balances to improve financial standing [4] Company Overview - Enservco provides a range of oilfield services, including hot oiling, acidizing, and frac water heating across major domestic oil and gas basins in the United States [5] - The Buckshot Acquisition, scheduled to close in the third quarter of 2024, will allow Enservco to enter a steady year-round logistics business, expanding its operational footprint and improving cash flow visibility [5]