Nuverra Environmental Line of Credit Expanded, Payback Extended

Nuverra Environmental Solutions is one of the largest companies in the United States that handles transportation and disposal of shale drilling wastewater and leftover rock and dirt from drilling. The company has major operations in the Marcellus/Utica region. In January the company, going through tough economic times, was de-listed from the New York Stock Exchange (see Nuverra Environmental Delisted from NYSE, Now a Penny Stock). We recently noted that in 3Q16 the company “only” lost $38 million–which is $90 million less than they lost in 3Q15 (see Nuverra Environmental 3Q16: Still in the Red, but Improving). The company continues to struggle financially. We make that statement based on a recent 8-K filing made with the Securities and Exchange Commission. In that filing Nuverra discloses that they have worked out an agreement with their bank, Wells Fargo, to extend the payback date for a loan made on a line of credit from December 31 of this year to March 31 of next year–an additional three months. The disclosure also shows Nuverra will be allowed to borrow more money–going from the current $30.6 million cap to $58.1 million. When you consider companies like Chesapeake Energy have over $9 billion in debt, Nuverra’s debt seems pretty tiny. But the fact remains they’re pushing out the time for repayment, and potentially borrowing more money…

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