US Well Services Inc. (USWS) stock prices were down by 11.69% as of the market closing on September 28th, 2021. This brought the price per share down to USD$0.83 at the end of the trading day. Subsequent premarket fluctuations have seen the stock rise by 6.56%, bringing it up to USD$0.89.
USWS Stock’s Transition
USWS stock marked a turning point in the second quarter of fiscal 2021 as it began its transition towards becoming a fully electric frac services company. The company reported exceptional performance as it made substantial progress on various strategic initiatives over the course of the quarter. Over the quarter, the company finalized the design of its new 6,000 HHP Nyx Clean Fleet pump. It also resolved outstanding litigation and began to implement a plan to reduce term loan borrowings. The second quarter of fiscal 2021 also saw the company raise funds to expand its existing electric fleet.
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Continued Impact of Pandemic
The second quarter of fiscal 2021 saw industry activity levels continue to improve. This was a result of E&P companies responding to rising commodity prices by reactivating completion crews. While the increase in activity has been promising, pricing for diesel frac services is still being impacted by the ongoing coronavirus pandemic. The sustained, lower pricing for legal diesel fleets is combined with a tight labor market, leading to the company announcing its exist from the diesel frac services business. Further consolidating this transition are inflationary headwinds across the supply chain, as well as the widening bifurcation in demand for next-generation and conventional diesel fleets. The company is transitioning to focus solely on the premium, electric market segment.
Revenue Reports
Revenues for the second quarter of fiscal 2021 were reported at USD$78.8 million by USWS stock. The 3% year over year increase was primarily driven by higher sales of sand and sand transportation services. The company averaged 9.3 active fleets over the course of the quarter, down from the 10.0 reported for the first quarter of fiscal 2021. The company reported a utilization average of its active fleets of 85% during Q2 2021, resulting in a fully utilized equivalent of 7.9 fleets.
Future Outlook for USWS Stock
With the world hurtling towards the electrification of vehicles, USWS stock is poised to capitalize on the burgeoning market. The company is keen to spearhead its transition to an electric fleet in a bid to usher in unprecedented growth. Current and potential investors are confident in management’s ability to leverage the resources at their disposal. This is hoped to facilitate significant and sustained increases in shareholder value.
