Page 13 - NorthAmOil Week 17

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NEWS IN BRIEF
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DOWNSTREAM
Tellurian executes agreements for $50mn financing and reduction of term loan
Tellurian announced today it has executed an agreement to sell $56mn of zero coupon, unsecured notes for gross proceeds of $50mn and provide the lender with warrants to purchase up to 20mn shares of Tellurian common stock, subject to customary closing conditions.
In conjunction with this financing, Tellurian has also entered into an agreement to amend its 2019 Term Loan, including
a reduction of the principal amount by $17.1mn. The agreement provides for a paydown of $2.1mn in cash, converts $15mn of principal value into equity through the issuance of approximately 9.3mn shares to the lender, and provides the lender with warrants to purchase up to approximately 4.7mn shares of Tellurian common stock, subject to customary closing conditions.
Tellurian’s unaudited cash and cash equivalents balance proforma for the financing transaction would have been approximately $100.7mn as of March 31, 2020.
President and CEO Meg Gentle said: “Tellurian is building cash reserves during this challenging time in global markets, positioning for a strong emergence from COVID-19 restrictions. We remain bullish on long-term natural gas demand growth, underscoring the acute need for Driftwood LNG.”
TELLURIAN, April 28, 2020
SERVICES
MRC Global announces first-quarter 2020 results
MRC Global, the largest global distributor, based on sales, of pipe, valves and fittings and related products and services to the energy industry, today announced first quarter 2020 results.
The company’s sales were $794mn for the first quarter of 2020, which was 4% higher than the fourth quarter of 2019 and 18% lower than the first quarter of 2019. The sequential increase was driven primarily by the US gas utilities sector, which was up $21mn. As compared to the first quarter of 2019, the decrease was across all sectors and segments as the impact of lower commodity prices led to reduced customer spending.
Net income attributable to common stockholders for the first quarter of 2020 was $3mn, or $0.04 per diluted share, as compared to the first quarter of 2019 of $12mn, or $0.14 per diluted share.
Andrew R. Lane, MRC Global’s president and chief executive officer stated: “I am pleased with our first quarter results, which was a solid performance given the market challenges. Revenue was up sequentially, we generated $37mn of cash from operations, and we reduced net debt by $26mn. Customer spending has slowed considerably in April
in response to the unfavourable commodity price environment and a significant decline in oil and gas global demand brought about by the COVID-19 pandemic. As a result, we are taking steps to further reduce our operating costs by $80mn and reduce inventory by $140mn or more compared to 2019.”
“Our counter cyclical cash flow business model and our available liquidity will allow us
to withstand the current challenging market conditions and continue to focus on our long- term strategy to enhance shareholder value. We expect to generate over $200mn in cash flow from operations in 2020. At this level, our free cash flow would be approximately $160mn after accounting for the preferred stock dividend and capital expenditures, resulting in a free cash flow yield of nearly 50%, based on today’s stock price,” Mr. Lane added.
MRC Global’s first quarter 2020 gross profit was $148mn, or 18.6% of sales as compared to the first quarter of 2019 gross profit of $174mn, or 17.9% of sales. Gross profit for the first quarter of 2020 and
2019 reflects income of $3mn and $0mn, respectively, in cost of sales relating to the use of the last-in, first out (LIFO) method of inventory cost accounting.
MRC GLOBAL, April 28, 2020
RPC announces delay in reporting of first-quarter 2020 financial results and discloses unaudited financial highlights
RPC announced that its earnings release
for the first quarter ended March 31, 2020, previously scheduled for tomorrow morning, has been postponed.
RPC anticipates that its earnings announcement and conference call will
be held on or prior to the Securities and Exchange Commission deadline of May 11, 2020 for the filing of its first quarter 2020 Form 10-Q.
An announcement confirming the date, time and call-in information of RPC’s earnings announcement and conference call will be provided prior to that time.
During the first quarter of 2020, RPC, along with the rest of the U.S. domestic oilfield, experienced a swift, unexpected downturn in business conditions due to
the impacts of the OPEC dispute and the COVID-19 pandemic. Because of the potential near-term weakness in its financial results, RPC continues to quantify the impact of these factors on the fair value of its assets but has not finalised its conclusions. Our conclusions regarding impairment related to the fair value of RPC’s assets will be finalised shortly.
RPC, April 28, 2020
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