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Saturday, December 9, 2023

Nuverra Environmental Solutions, Inc. (NES) Stock Leaping Forward, Here’s the Reason

Nuverra Environmental Solutions, Inc. (NES), a company that provides water logistics and oilfield services to customers focused on the development and ongoing production of oil and natural gas from shale formations, has surged 10.50% in aftermarket trading session. Consequently, NES stock is trading at $2 at the time of the writing. On Monday, NES closed the day at $1.81 after soaring 30.22% during regular trading hours. The increase could be attributed to a definitive agreement between Select Energy and Nuverra.

Why NES Soaring?

On Monday, Select Energy Services Inc., a provider of sustainable full life cycle water and chemical solutions to the U.S. unconventional oil and gas industry, announced to have agreed with Nuverra Environmental Solutions, Inc. The agreement was meant to acquire NES for the total consideration of about $45 million. That included the assumption of approximately $20 million of long-term debt, net of cash. Under the agreement, the stockholders of Nuverra would receive approximately 4.2 million shares of Select Class A common stock in exchange for all outstanding shares of the company.

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NES Q2 2021 Operational Results

In late August, NES released the operational results for the second quarter of the fiscal year 2021. The quarter ended on 30th June. The company generated total revenue of $24.7 million during the quarter against $24.4 million for the same period of 2020. The total costs and expenses bore by the company during the three months stood at $32 million against $30.1 million for the same period of 2020. The net loss suffered by the company during the three months stood at $3.8 million (or $0.24 per basic and diluted share) against $6.7 million (or $0.43 per basic and diluted share) for the same period of 2020.

Executive Commentary

Pat Bond, Chief Executive Officer of NES, while commenting on the result said that the company is continuing its ongoing efforts to lower the cost structure. It is working to increase efficiency in the service dispatch process and other back-office systems. The company expects lower costs and expenses during the upcoming fiscal. That in turn would aid in the growth of the company.

Future Outlook for NES

During the last three months, NES stock has declined approximately 20%. However, during more recent times, the stock has faced mostly been on a positive trajectory. With the prices of oil and gas expected to shoot up further in the aftermath of COVID-19, the stocks related to the oil and gas sector, just like NES, are expected to take giant steps forward in near future.

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