Environmental Drilling Solutions

Summary

Lender Advisor

Lafayette, LA

Environmental Drilling Solutions (EDS) provides full-service drilling waste management, solids control, and complete backyard management solutions. Founded in 2007, EDS is headquartered in Lafayette, Louisiana, and services land drilling operations in the Marcellus, Utica, Eagle Ford, Permian, Bakken, Haynesville, Rockies, and Mid-Continent, and offshore operations in the Gulf Coast and Gulf of Mexico.

Carl Marks Advisors (CMA) was engaged by the secured lender to Environmental Drilling Solutions to provide consulting services during a covenant breach and debt refinancing. CMA reviewed the 13-week cash forecast, business outlook, regional operations, cost structures, capital expenditure needs, and equipment obsolescence.

CMA implemented a cash forecasting process, identified liquidity risks and opportunities, and refined assumptions in the company’s refinancing forecast. CMA also advised the lender group on business risks, provided detailed weekly variance reports, and highlighted potential challenges.

Working onsite in Lafayette, Louisiana, CMA facilitated negotiations between the lender group, the company, and the financial sponsor, ultimately leading to a successful recapitalization and the sale of debt by three of the four lenders to the sponsor.

Key Challenges

Limited Liquidity

Forecasting Accuracy

Stakeholder Negotiating

Engagement Highlights

CMA’s role included reviewing for accuracy the 13-week cash forecast and liquidity risks & opportunities, reviewing the 2014 business outlook, analyzing operations by region/basin, fixed & variable cost structures, capital expenditure requirements, as well as assessing equipment obsolescence.
- CMA helped implement a 13-week cash forecasting process and identified liquidity risks and opportunities with management.
- CMA reviewed the Company’s forecast used for structuring the refinancing and recapitalization and worked with management to refine assumptions and initiatives.
- We identified risks and opportunities in the projection model and advised the lender group on signs of deterioration in the business and risks to plan.
- CMA provided weekly variance reports with detailed explanations on timing and permanent variances.
The CMA team worked onsite in Lafayette, Louisiana with management to help the lender group, Company and financial sponsor negotiate and successfully close its recapitalization, ultimately leading to a sale of the debt by three of the four lenders to the sponsor.

Environmental Drilling Solutions

Summary

Lender Advisor

Key Challenges

Engagement Highlights

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