STEP Energy Services issued the following announcement.
STRATEGIC BUSINESS UPDATE
STEP is pleased to provide an update on 2020 work programs for its Canadian and U.S. operations. Throughout 2019, STEP focused on executing work programs for large, blue-chip clients with active and stable work programs while broadening our client base across our different service offerings. This allowed STEP to drive utilization and increase efficiencies in our operations. We were also successful in effectively deploying our assets to areas of greater activity, including opening a new coiled tubing operation in North Dakota towards the end of the year.
Heading into 2020, the Company’s goal was to build on this focus and STEP is pleased to announce it has been successful in achieving its 2020 RFP goals, which provide clear line-of-sight to work programs to enable greater stability, predictability and equipment utilization.
Canadian Operations Highlights
- Successful renewal of key fracturing work programs with similar or larger work scopes
- Added another large fracturing work program and retained other key clients
- Retained and added key coiled tubing clients, with STEP’s suite of technologies and field execution being a differentiator
- Successfully retained fracturing work programs with a large, international client for two fleets
- Added another large fracturing work program for the third fleet with a large, blue-chip client
- Awarded first call options for coiled tubing work across the Permian, Bakken and Eagle Ford basins, with outcomes for further RFPs still pending across our U.S. footprint
STEP has maintained an ongoing focus on capital discipline and balance sheet efficiency and is pleased to report that at December 31, 2019 net debt (bank debt less cash on hand) was $232.6 million, down from $254.2 million at December 31, 2018. At year end, the Company was also onside with all covenants related to this facility.
Based on the Company’s current outlook for the business, STEP expects to remain on side with all financial covenants for 2020. However, given the volatility of commodity prices which underpin customer cash flows, and therefore demand for our services, management felt it was prudent to approach our banking syndicate to seek an extension of the increased covenant levels granted in Q1 2019. We are pleased to announce that as of January 22, 2020, the Company has entered into an agreement with its syndicate of lenders to make an amendment to its credit facilities in order to provide increased financial flexibility. The amendment was a change to the required Funded Debt to EBITDA Ratio (as defined in the credit facilities). The Funded Debt to EBITDA Ratio continues to be calculated in the same manner as it was prior to the amendment, but is now required to meet the following ratios:
| Rolling four quarter period ending | Required Funded Debt to EBITDA Ratio |
| March 31, 2020 | 4.50:1.00 |
| June 30, 2020 | 4.50:1.00 |
| September 30, 2020 | 4.50:1.00 |
| December 31, 2020 | 4.50:1.00 |
| March 31, 2021 | 4.00:1.00 |
| June 30, 2021 | 4.00:1.00 |
| September 30, 2021 and thereafter | 3.00:1.00 |
FOURTH QUARTER AND YEAR END 2019 RESULTS RELEASE DATE AND CONFERENCE CALL DETAILS
STEP intends to release its 2019 fourth quarter and year end results on Thursday, March 12, 2020 before markets open and will host a conference call at 8:00 a.m. MT (10:00 a.m. ET) on the same morning.
To access the conference call in North America, dial 1-877-375-3078 (toll-free) or 1-629-228-0731 and enter the conference passcode 7641909, or ask for the “STEP Energy Services Fourth Quarter and Year End 2019 Financial and Operating Results Call”.
To listen to a live webcast of the conference call, or to hear a replay, please enter the following URL into your web browser: https://edge.media-server.com/mmc/p/mnhhnt6r.
The conference call will be available for replay over phone approximately three hours after the end of the call. To access the replay, dial 1-855-859-2056 (toll-free) or 1-404-537-3406 and enter the passcode 7641909. The replay over phone will remain available until March 19, 2020. The webcast replay will remain available until March 12, 2021.
Financial Statements and Management's Discussion and Analysis will be posted to STEP’s website and SEDAR immediately after the press release is disseminated.
Original source can be found here.