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