THE WOODLANDS, Texas: Newpark Resources on Wednesday, December 28, 2022 announced it has made the previously declared transactions, which effectively provide for the its exit from the Gulf of Mexico market.
They transacted the sale of substantially all assets associated with the Gulf of Mexico completions fluids operations, as well as a separate transaction, through which the Company has entered a seven-year sublease of the Company's Fourchon, Louisiana drilling fluids shorebase and blending facility with a leading global energy services provider.
Both of these transactions include the assignment or sublease of the underlying properties that remain subject to the final approval of the local port authority.
As a result of these transactions, the Company received approximately $6 million of cash from the sale of the completions fluids assets in the fourth quarter of 2022 and expects to generate additional cash of nearly $25 million over the next few quarters, primarily associated with the ongoing wind-down of working capital.
They also proclaimed that it repurchased 4.4 million shares (4.7% of outstanding shares) of its common stock under its existing share repurchase plan, using total cash of $17.6 million during the fourth quarter of 2022.
Matthew Lanigan, Newpark's President and Chief Executive Officer, stated, "With the completion of the Gulf of Mexico transactions, we have accomplished all four of our previously-discussed divestitures. Including the wind-down of working capital, the four divestitures should produce more than $100 million in cash.
This includes approximately $80 million in cash received in the fourth quarter, enabling us to reduce our debt levels and return value to shareholders through meaningful share repurchases."
Lanigan continued, "The completion of these transactions reflect significant steps in transforming Fluids Systems into a more agile, capital-light business model, capable of stronger free cash flow generation and returns moving forward.
As we look ahead, we plan to focus our energy on executing our disciplined growth strategy, including the acceleration of our growth in the utilities sector, while also continuing to return excess cash generation to shareholders through additional share repurchases."
Newpark Resources, Inc. is a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and services to a variety of industries, including oil and gas exploration, electrical transmission & distribution, pipeline, renewable energy, petrochemical, construction, and other businesses.