Service & Supply | Oilfield Services | Job Cuts / Downsize / Layoff | Capital Markets | Capital Expenditure | Capex Decrease | Capital Expenditure - 2020
ProPetro Cuts Nearly 400 from Workforce; Reduces Capex
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ProPetro Holding Corp. announced a number of strategic actions to align its cost structure.
The company is implementing the following:
- Reducing labor costs related to changing activity levels. Today, ProPetro implemented a workforce reduction to address declining fleet activity - the amount of employees being cut was 388 according to its filing with the Texas Workforce Commission. These will be permanent.
- Significantly reducing maintenance capital expenditures and field level consumable costs due to lower activity levels - a solid capex amount was not provided
- Seeking to negotiate lower pricing for expendable items, materials used in day-to-day operations, and large component replacement parts.
- Evaluating cost-savings opportunities by internalizing certain support services that are currently outsourced.
Debt / Liquidity
As of March 20, 2020, ProPetro had no net debt and had total liquidity $178.0 million, including cash of $127.6 million and $50.4 million of available capacity under the Company’s revolving credit facility ($110 million outstanding as of March 20, 2020). The Company’s borrowing capacity under the revolving credit facility (which is determined monthly based on 85% of eligible accounts receivables, less customary reserves) will be adversely impacted by the expected decline in our and our customers’ activity given current market conditions.
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