Ranger Energy replaces its CFO

Ranger Energy Services has replaced its CFO, Brandon Blossman, with Melissa Cougle, effectively immediately.



Ranger went public in August 2017 at $14.50 per share, giving it a market capitalization of $215 million.  At that time, its primary business was workover rigs.  The company has since made acquisitions in wireline. It also acquired the assets of Basic Energy Services out of bankruptcy in September 2021 for $36.65 million.

Its current share price is $10.29 and the company has a market capitalization of $259 million. It has its head office in the Westchase district of Houston.

Mr Blossman was appointed CFO in June 2018 after spending many years at Tudor Pickering, an energy investment bank. He will continue to be paid for six months after his departure. Mr. Blossman will also receive accelerated vesting of 20,899 shares of restricted stock

Ms. Cougle was the CFO at Frank’s International from May 2019 until November 2021, leaving shortly after its takeover by Expro Group. Prior to that, she was CFO at National Energy Services Reunited, another Houston-based publicly-traded oilfield services company, from May 2018 to May 2019.

She will receive a base salary of $400,000. That’s considerably more than Mr. Blossman was making ($303,000).

In September 2021, the company appointed Stuart Bodden as its CEO, replacing Darron Anderson who left three months earlier.

Amazingly, it was the second time that Mr. Bodden had succeeded Mr. Anderson. Mr. Bodden joined from Express Energy where he had been CEO since 2016. He was hired at Express after Mr. Anderson left to take the job at Ranger. Express Energy was a portfolio company of Apollo Management until it was sold for a big loss in 2020.

SEC filing – Ranger appoints Cougle as CFO

Houston biopharma company replaces its CFO

Aravive, a Houston biopharmaceutical company, has replaced its CFO. Vinay Shah, who has been CFO since 2010, has resigned and Rudy Howard appointed in his place.

The company is conducting clinical trials on a protein that inhibits the signals produced by the AXL protein. These signals help proliferate tumors and cause the body to suppress its immune system. The trials are being conducted on patients with ovarian, kidney or pancreatic cancers.

Aravive went public in October 2018 via a reverse takeover of Versartis, a biopharma company based in California. The transaction valued the company at $39 million. Currently, the company has a similar market cap with its share price being $1.21. A year ago, its share price was around around $5-$6.

Mr Shah will receive a severance payment of $286,443 (nine months, paid monthly) and will enter into a consulting contract for four months with a monthly payment of $44,557.

Mr. Howard will receive a base salary of $395,000. He also received stock options on 290,000 units that will vest over four years.

Mr. Howard was previously the CFO of vTv Therapeutics, a struggling biopharma company, based in North Carolina. He resigned in December 2021, receiving a one year severance payment of $325,000. At that time, the company let go 16 of its 25 employees.

SEC filing – Aravive CFO

Houston resident indicted in Texas fake paper tag scheme

Another Houston resident has been indicted in the Texas fake paper tag scheme that’s cost the state nearly $100 million dollars. Daniel Rocky Christine-Tani was arrested in Sugar Land and will appear in court on June 2, 2022.

Co-conspirators Leidy Areli Hernandez Lopez, Houston, Emmanuel Padilla Reyes, Houston and Octavian Ocasio from New York were charged in May 2021. The new indictment adds more charges against Reyes, aka Christian Hernandez Bonilla, who remains at large.



I wrote about the scheme in my blog post from May 2021 that highlighted the virtually non-existent controls in the system.

Internal controls lacking

Car dealers in Texas must obtain a GDN (general distinguishing number) license to buy or sell vehicles. The license application portal is online and a license can easily be acquired using fake ID documents, such as a driver license from any state. Once a dealer obtains a GDN license, they can access the online eTag portal of the TX Department of Motor Vehicles to create temporary tags.

However, there were a couple of gaping holes in the system. Firstly, a GDN holder can set up other users on their account who can create and issue temporary tags. Secondly, there are no checks on the vehicle, buyer or vehicle identification number (VIN) entered into the portal.

In that way, the co-conspirators issued 700,000 fake paper plates in a matter of months in 2020. Fake plates were sold for between $125 and $150 each, although more recently plates can be bought for less than $100.

New state law being to have an effect

The Texas Department of Motor Vehicles is a relatively new department, only created in 2009. It only began investigating title fraud in 2014 when it hired its first fraud inspector.  A 2019 report by the Texas Legislature stated that the department had no fraud reporting tools.

The state passed a bill that became law in September 2021 to improve controls over paper plates. For example, the law requires all new  dealer applicants to be fingerprinted in order to obtain a GDN. That has not yet been enacted.

The law also allowed the DMV to deny or revoke a dealer’s access to the eTag portal if there was fraudulent activity. Prior to the law passing, the DMW was specifically prohibited by statute from denying a dealer access to the database.

Limits have also been put in place on the number of tags that a dealer can issue. They appear to be having an effect.

At the February DMV board meeting it was reported that 17 independent dealers were part of an organized criminal group that issued 1.2 million buyer tags in 2021 or 25,000 a week. In 2022, these numbers dropped to a few hundred a week.

However, the criminal group is now moving onto creating tampered documents without using the eTag portal.

If convicted, each defendant faces up to 20 years in prison and a possible $250,000 maximum fine.

https://www.justice.gov/usao-sdtx/pr/another-indicted-nationwide-fraudulent-car-buyer-paper-tag-scheme

Weatherford CFO is out after less than two years

Keith Jennings, CFO of Weatherford International, is out after less than two years with the company. His last day will be July 31. The company has begun an executive search for his replacement.



Weatherford filed for bankruptcy in July 2019, emerged in December 2019 and relisted its shares on Nasdaq in June 2021. At the time of the relisting, its share price was $12.81. It is now $31, giving it a market capitalization of over $2 billion.

The company still has over $2 billion in net debt, but it has had some success in moving away on high volume, low margin business. This is evidenced by its gross margin percentage of 27%  being the highest since 2011.

Mr Jennings joined from Calumet Specialty Products Partners in September 2020, where he was CFO.  Earlier in his career he spent seven years as VP and Treasurer at Cameron International, leaving a few months after its takeover by Schlumberger.

Six weeks after Mr. Jennings started, Girish Saligram was appointed CEO.

Mr. Jennings had a base salary of $500,000. He will receive a cash severance of almost $1.8 million (1.5 times base salary and target bonus, plus pro-rated bonus for 2022). In addition, according to the annual proxy filed last month, $5 million of restricted stock awarded to Mr. Jennings will also vest.

Calumet is based in Indianapolis, so Weatherford gave Mr Jennings a relocation allowance of $150,000. He also received $500,000 as a sign-on bonus.

SEC filing – Jennings departure

Quanta Services promotes CFO to operations role

Quanta Services has promoted CFO Derrick Jensen to Executive VP, Business Operations. The company is the third Houston-area public company this week to promote its CFO, following Halliburton and US Well Services.



Jayshree Desai moves from Chief Corporate Development Officer to CFO. Both changes are effective July, 2022.

Quanta designs, installs, repairs and maintains energy and communications infrastructure. It has revenues of $13 billion and a market capitalization of $17 billion.

Mr. Jansen has been with Quanta since its inception in 1997 and has been the CFO for the last 10 years.

Ms. Desai joined Quanta in January 2020. She was previously the founder of a renewable energy company focused on utility-scale wind, solar and storage development and COO of a electric transmission development company. Prior to that, she was CFO of EDP Renewables North America.

No new compensation arrangements for either executive were disclosed.

SEC filing – Quanta CFO change

 

Leadership changes at US Well Services

US Well Services Nyx Clean Fleet® Frac Unit

Kyle O’Neil, CFO of US Well Services, has been promoted to CEO, replacing co-founder, Joel Broussard, who becomes non-executive Chairman. Josh Shapiro, currently VP of Finance, is promoted to CFO.



Poor financial performance

US Well Services is a struggling pressure pumping company that has its head office in the Galleria area of Houston.  The company was founded in 2012 and it struggled even before it was taken public for $274 million by a SPAC in November 2018. In early 2017, the company had completed an out-of-court restructuring that resulted in $118 million of debt being converted to equity.

Mr. O’Neil was appointed CFO when the business went public and joined from TCW Direct Lending, the main equity shareholder.

The company’s unique selling point was that it had patented all-electric hydraulic fracturing which uses less fuel and generates less emissions than conventional diesel fleets. At the time of going public, it had 11 fracking fleets, including two that were electric-powered. It had plans to add five more electric units.

As of May 2021, the company still had 11 fleets, though five were electric. The company has since sold off its diesel units to become a pure-play electric fracking company. It is currently building four of its next generation units and will put them into service later this year.

As of December 2021, the company had negative shareholders’ equity of $129 million and debt of $172 million. The current stock price of USWS is 91 cents. The market cap is $64 million.

In with the new…

Mr. O’Neil will receive a base salary of $540,000 and was granted 600,000 deferred stock units that will vest over three years. He also received a performance stock award worth $650,000, that vests under certain conditions.

Josh Shapiro, the new CFO, joined the company in March 2019. Prior to that, he worked at Piper Sandler as an investment banker. His new base salary will be $400,000.

…Out with the old

Mr Broussard will receive a severance of $950,000, to be paid in three instalments over the next 18 months. He also received 1.1 million restricted stock units. Half vests in 6 months, the rest in 18 months.

The company also announced that Matt Bernard had resigned as Chief Administrative Officer. Mr. Bernard was also the CFO between 2015-2018.  Mr. Bernard isn’t receiving any severance. However, he has signed a consulting agreement that will pay him $13,417 monthly. The agreement can be terminated by either party with 30 days notice.

SEC filing – management changes

 

Halliburton appoints new CFO

Halliburton has appointed Eric Carre as its new CFO. He replaces Lance Loeffler, who has been promoted to Senior VP of Middle East and North Africa.

Halliburton has revenue of $16 billion, over 40,000 employees and a market capitalization of $32 billion.



Mr. Carre is currently the Executive VP, Global Business Lines and Chief Health, Safety and Environmental Officer. He started with Halliburton in 1991 as a Project Engineer and holds a master’s degree in mechanical engineering from Université Libre de Bruxelles in Belgium.

Mr Carre’s former role, Global Business Lines, covered the Drilling & Evaluation and Completion & Production divisions as well as Landmark & Consulting, Project Management and Global Technology. Halliburton already had Executive VPs for Drilling & Evaluation (Rami Yassine) and Completion & Production (Michael Sugura) and they remain in place. It’s not clear who now has responsibility for Landmark & Consulting, Project Management and Global Technology.

Mr. Loeffler has been CFO since November 2018. He joined Halliburton in 2014 and was VP of Corporate Development and then Investor Relations before becoming the CFO. Previously he held director positions at Deutsche Bank and UBS Investment Bank.

Presumably both Mr. Carre and Mr. Loeffler are being groomed for the CEO position at some point. Current CEO Jeff Miller has been in that position since June 2017.

No compensation arrangements have been disclosed for either Mr. Carre or Mr. Loeffler.

https://www.businesswire.com/news/home/20220502005110/en/

 

Dental clinic operator indicted for not paying $1.7 million in taxes

Jonathan Louis Lepow, a dental clinic operator, has been indicted for failing to pay $1.7 million in employment taxes to the IRS.

Lepow operated the business side of his father’s dental practice, Kenneth A Lepow, DDS, Inc (‘Lepow DDS’) between 2005 and 2017. The practice is based in NW Houston.

According to the indictment, around 2012, Lepow stopped paying employment taxes to the IRS. The IRS assigned a Revenue Officer in 2014, who began contacting Lepow to bring the business into compliance. The outstanding tax obligation for 2012-2016 was $1.7 million.

Instead, Lepow allegedly deposited funds from Lepow DDS into the bank accounts of the Texas Center for Continuing Education. Beginning in 2016, he also allegedly deposited funds into the bank accounts for the benefit of Top Tree Agency Corp, a marijuana marketing business in Seattle.

If convicted, Lepow faces up to 10 years of imprisonment and a possible $250,000 maximum fine.

Lepow DDS filed for Chapter 7 bankruptcy in 2017.

https://www.justice.gov/usao-sdtx/pr/dental-clinic-operator-arrested-failing-pay-17-million-taxes

Microvast appoints new CFO

Microvast has appointed board member, Craig Webster, as its new CFO. He replaces Leon Zheng, who has been CFO since 2010.



The company went public via a SPAC in July 2021. It now trades at $5.80 a share ($1.7 billion market cap). Microvast is a leading provider of vehicle battery technology for all types of vehicles. The company claims its batteries have longer range, quicker charging and longer lifespan than its competitors. It had initial success with electric buses, especially in China.  Its products operate in 160 cities in 19 countries.

The company was formed in Houston in 2006 by Yang Wu. Nominally, the company has its headquarters in Stafford where it has a 4,000 sq. ft. office. The main operations have been in Huzhou, China where the company has a manufacturing plant with 1.7 million sq.ft.  Mr. Wu had previously founded a water treatment company in Huzhou that he sold to Dow Chemical in 2006.

Mr. Zheng will stay on in a consulting capacity for 18 months. He will receive a fee of $25,000 a month.

Mr. Webster has served as a director of Microvast since 2012. Between 2005 and 2018, he worked for Ashmore Group, an emerging markets Investment manager. He is a UK citizen and currently resides in New Zealand. Mr. Webster will receive a base salary of $400,000 and will be required to relocate to the US to a region mutually agreeable between him and the company. (According to LinkedIn, CEO Mr. Wu lives in Hawaii, while the company has a new R&D facility in Orlando and a large manufacturing plant in Tennessee).

The company also announced the promotion of Mr. Sasha Rene Kelterborn to President. He will lead the day-to-day operations of the company. Currently based in Berlin, he will also relocate to the US, to a region mutually agreeable between him and the company.

SEC filing – Microvast CFO

LNG services company completes IPO

Excelerate Energy has completed its initial public offering by raising $384 million. The company  offered 16 million shares at $24 per share. This was at the high end of the range of $21 to $24 and values the company at over $2.5 billion.



The company originally filed back in January, but war in Ukraine has increased interest in LNG.

Excelerate, which has its head office in The Woodlands, provides flexible LNG infrastructure solutions, primarily in emerging markets. The company has a fleet of 10 Floating Storage Regasification units (FSRU).

Natural gas is cooled to approximately -160C at the source of production to reduce its volume down for transportation on an LNG carrier. The LNG needs to be brought back to its gas state at the area of consumption. One option is to have an LNG facility constructed on land, another is to do it offshore using a FSRU. The latter is often cheaper and quicker, especially in emerging markets.

Excelerate was formed in 2003 by George Kaiser, a Tulsa-based investor who is also the majority owner in BOK Financial Corporation (which also operates under the brands of Bank of Oklahoma and Bank of Texas).

For the 12 months ended September 2021, the company had revenues of $658 million. Currently the company has eight contracts in place for delivering regasified LNG to customers in Argentina, Brazil, Bangladesh, Israel, Pakistan and the UAE.

Steven Kobos has been the CEO of Excelerate since March 2018 and served as its counsel for the previous 11 years. Dana Armstrong is the CFO. She joined in April 2020 and was previously the CFO at Scientific Drilling.

S-1 filing – Excelerate Energy