Enservco offloads business unit for nearly $1.7M
LONGMONT — Enservco Corp. (NYSE American: ENSV), which has traditionally provided specialized well-site services to the domestic oil and gas industries, has offloaded its hydraulic fracturing water heating business unit as part of a corporate-strategy shift away from the more seasonal aspects of its energy-services business and toward transportation and logistics.
Platteville-based HP Oilfield Services LLC bought Enservco subsidiary Heat Waves Hot Oil Service LLC for almost $1.7 million.
“For more than a year, we have undergone a significant review of our business portfolio to identify, evaluate and execute on initiatives to drive increased efficiencies and other improvements throughout our operations,” Enservco CEO Rich Murphy said in a prepared statement. “Concurrent with these activities, we spent considerable time and effort improving our financial position while we also evaluated various opportunities to enhance our value proposition both in the marketplace and with investors. I am pleased that our team – with the full support of our board – continues to make significant progress on multiple fronts.”
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Enservco said it will use proceeds from the Heat Waves sale to pay off debt.
The Longmont-based company declared its strategic pivot toward logistics during the first quarter, on the heels of a March deal to acquire Fort Lupton-based energy-logistics and transportation company Buckshot Trucking LLC for $5 million in cash and stock.
Enservco said this week that a completion of the Buckshot acquisition is imminent.
“Today’s announcement (of the Heat Wave sale) represents another significant step in our process of transitioning our business portfolio away from one with a significant focus on seasonal industry activities to a much larger addressable market providing year-round cash flows and margin generation,” Murphy’s statement said. “Combined with today’s announcement and our successes over the past year, we believe we have placed the Company in a stronger position to drive near and long-term value for shareholders. We appreciate the continued support of all our stakeholders — especially our employee team – and look forward to keeping everyone apprised of our progress.”
