KLX Energy (KLXE) Amends Credit Facility, Gets More Funds
KLX Energy Services Holdings KLXE stock rose 8% on Wednesday after the oilfield services provider announced an extension and modification of its credit facility, which is set to provide significant benefits to the company.
First, it extends the maturity date of the Credit Agreement, offering KLX Energy more time to manage its financial obligations. The new maturity date will be the earlier of Sep 15, 2025, or Aug 1, 2025, provided the company's senior secured notes remain outstanding. Previously, the maturity date was Sep 15, 2024. This extension allows KLXE to have a more favorable debt maturity profile, reducing the potential pressure of near-term repayment.
Second, the amendment increases the revolving credit commitment from $100 million to $120 million. This additional credit capacity will enhance the company's financial flexibility, enabling it to pursue growth opportunities, invest in strategic initiatives, and navigate market challenges more effectively.
Looking at the financial impact of the amendment, KLX Energy's available liquidity as of Mar 31, 2023, would have increased by $20 million to reach $104 million. This includes $40 million in cash and $64 million of pro forma availability under the lending facility. The improved liquidity position provides the Houston, TX-based company with more resources to fund its operations, invest in technology and equipment, and explore expansion opportunities. As of May 31, 2023, KLX had a cash balance of $67 million and available liquidity of $130 million, which includes $63 million of availability under the credit facility.
Overall, the extension of the credit facility and the associated amendments provide KLX Energy with enhanced financial flexibility, extended debt maturity, and increased liquidity. These advantages enable the company to execute its strategic plans, drive growth, and generate value for its stakeholders. With a strengthened financial position, KLXE is well-positioned to navigate market conditions and seize opportunities in the energy services sector.
Zacks Rank & Stock Picks
KLX Energy Services carries a Zacks Rank #5 (Strong Sell) at present. Meanwhile, investors interested in the energy space might look at operators like Profire Energy PFIE, Seadrill Limited SDRL and Smart Sand SND, each carrying a Zacks Rank #2 (Buy) currently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Profire Energy: The 2023 Zacks Consensus Estimate for Profire Energy indicates 125% year-over-year earnings per share growth. PFIE has a trailing four-quarter earnings surprise of 11.1%, on average.
Profire Energy is valued at around $60.6 million. PFIE has seen its shares fall 4.6% in a year.
Seadrill: It is valued at some $1.9 billion. The Zacks Consensus Estimate for SDRL’s 2023 earnings has been revised 67.4% upward over the past 30 days.
Seadrill, headquartered in Hamilton, Bermuda, has a trailing four-quarter earnings surprise of roughly 50.9%, on average. SDRL shares have gained 46.8% in a year.
Smart Sand: SND beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. Smart Sand has a trailing four-quarter earnings surprise of 183.3%, on average.
SND is valued at around $69.8 million. Smart Sand has seen its shares drop 26.2% in a year.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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