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Basic Energy Services Cuts Operational Scope by 40%; Shuffles Exec Team

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   |    Thursday,May 28,2020

Basic Energy Services, Inc. has made several major changes to its organizational structure.

Operation Units Cut by 40%

The company is reducing the number of operating regions from five to three:

• Central, consisting of operations in the Permian Basin, Gulf Coast, Louisiana, North Texas and Oklahoma

• Western, consisting of operations in California and the Rocky Mountains

• Agua Libre, which is unaffected by this reorganization

Basic believes this internal consolidation will result in approximately $20 million in annual cost savings, in addition to the previously announced $17 million of expected annual cost synergies related to the acquisition of C&J Well Services.

Exec Changes

In conjunction with the cost-cutting initiative, the Company is making the following personnel changes:

• Adam Hurley, Vice President and Chief Integration Officer, is promoted to Executive Vice President, Operations and will lead the three regions and four PSLs

• Jim Newman, Senior Vice President, Region Operations, is named Senior Vice President, Agua Libre Midstream

• Brandon McGuire, Vice President, Permian, is named Senior Vice President, Central Region

• Jack Renshaw will remain Senior Vice President, Western Region, overseeing the same geography but with a reduced cost structure.

Keith Schilling, Basic’s President and CEO, stated, “We are pleased to announce that the synergies from our recent acquisition of C&J are achieving our previously announced target of $17 million and should be fully realized by June 30. In addition, our response to COVID-19, including furloughs and headcount reductions, should result in a reduction in expenses by an additional $20 million. Further, we expect the operational consolidation announced today to result in additional cost savings of approximately $20 million on an annual basis. Given the extraordinary challenges facing our industry, we continue to act quickly and decisively to improve our operational structure, with a goal of reducing G&A materially as a percent of revenue. We believe this right-sizing of our Company structure will afford Basic the benefits of scale and preservation of liquidity that will allow us to reinforce our commitment to our customers as a leading production services company in the U.S. and industry consolidator of choice.”