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DENVER, Feb. 03, 2021 (GLOBE NEWSWIRE) -- Enservco Corporation (NYSE American: ENSV), a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, today announced that Cross River Partners, the investment firm managed by Enservco’s Executive Chairman Rich Murphy, will convert its remaining subordinated debt and accumulated interest to Enservco equity.
Specifically, Cross River will exchange $1.25 million in sub-debt plus approximately $62,000 in accrued interest for 601,674 shares of common stock, based on a price of $2.18, which is the most recent closing sales price. In consideration for the exchange, Enservco will issue to Cross River 150,418 common stock purchase warrants exercisable at $2.507 per warrant share, a 15% premium to the exchange price.
Cross River originally held $2.5 million in sub-debt, but in September 2020 converted half of that total, or $1.25 million, plus $250,000 in accrued interest into common stock. In the aggregate, the elimination of $2.5 million in sub-debt plus $326,000 in accrued interest, combined with the elimination of $16 million in other debt in conjunction with the Company’s bank refinancing in September 2020, brings the total debt reduction over the past four months to $18.8 million.
Marjorie Hargrave, President and CFO, commented, “By eliminating $18.8 million in total debt in the past four months, we have significantly strengthened our balance sheet and created critical financial flexibility for the Company as we pursue our growth initiatives in an improving oil and gas environment. I want to again credit our lender, East West Bank, for being an outstanding partner and working hard to help us emerge from the downturn as a stronger company. In addition, since the beginning of 2020 we have taken more than $4.5 million in costs out of the business, significantly reducing our break-even and better positioning us to generate positive adjusted EBITDA as industry conditions continue to improve.”
Rich Murphy, Executive Chairman, added, “My agreement to convert debt to equity reflects my confidence in our business, our corporate staff and our field teams. I’m excited about where we are as a business and looking forward to taking advantage of improving oil and gas markets.”
Through its various operating subsidiaries, Enservco provides a wide range of oilfield services, including hot oiling, acidizing, frac water heating and related services. The Company has a broad geographic footprint covering seven major domestic oil and gas basins and serves customers in Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia. Additional information is available at www.enservco.com
Cautionary Note Regarding Forward-Looking Statements
This news release contains information that is "forward-looking" in that it describes events and conditions Enservco reasonably expects to occur in the future. Expectations for the future performance of Enservco are dependent upon a number of factors, and there can be no assurance that Enservco will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," “intends,” "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond Enservco's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in Enservco’s annual report on Form 10-K for the year ended December 31, 2019, and subsequently filed documents with the SEC. Forward looking statements in this news release that are subject to risk include Cross River’s plans to convert debt to equity, the Company’s ability to take advantage of improvement in oil and gas markets, ability to generate positive EBITDA and success of the proposed S-1 offering. Enservco disclaims any obligation to update any forward-looking statement made herein, except as required by law.
Pfeiffer High Investor Relations, Inc.
President and Chief Financial Officer