NYSE threatens Longmont’s Enservco with delisting over lack of equity

LONGMONT — Enservco Corp. (NYSE American: ENSV), which has traditionally provided specialized well-site services to the domestic oil and gas industries, could be dropped by the New York Stock Exchange while the company is attempting a corporate-strategy shift away from the more-seasonal aspects of its energy-services business and toward transportation and logistics. 

The company informed investors on Monday morning that “the staff of NYSE Regulation has determined to commence proceedings to delist the common stock of Enservco from the exchange” because Enservco “was unable to attain a minimum of $6 million of stockholders’ equity by June 9, 2024; the end of the maximum 18-month compliance plan period.”

The exchange requires that all companies traded on the NYSE meet that equity threshold.

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Enservco said it will appeal the ruling and “submit a cure of its equity deficit.”

The company’s stock will continue to be traded during the appeal review.

Enservco’s equity resolution plan involves entering into a new $10 million equity line of credit, converting convertible notes into equity and the issuance of $1.25 million of equity related to its upcoming acquisition of Fort Lupton-based energy-logistics and transportation company Buckshot Trucking LLC.

That $5 million acquisition, expected to close this year, is emblematic of Enservco’s strategy shift as it “explore(s) strategic initiatives to rationalize its assets and reduce reliance upon the seasonal frac heating business,”  which provides energy companies with heated water used during the hydraulic fracturing process, the company said.

“The Buckshot Acquisition will provide Enservco with a proven and growing foundation in an attractive year-round logistics business,” Enservco said in May. 

The deal “will prove transformational for Enservco as we transition away from a seasonal business that is subject to commodity risk, to a logistics business that generates strong year-round cash flow,” Enservco CEO Rich Murphy said in a May prepared statement. “The transition will not require substantial new overhead or capital. We are continuing our evaluation of strategic alternatives designed to further reduce our seasonal focus, with the underlying premise that any opportunities must be immediately accretive, generate solid cash flow, and provide visible near and long-term growth.”