US Well Services (USWS) Stock Climbs On Go Green News

US Well Services Inc (NASDAQ: USWS) is having a great start to the trading session in the premarket hours this morning after the company announced that it plans on the full electrification of its portfolio. Here’s what’s happening:

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USWS Stock Gains On Electrification Plans

As the world continues to work to go green, US Well Services plans to jump in on the trend, expecting to have fully exited the diesel frac market by the end of the fourth quarter of this year. Instead, the company will become an all-electric hydraulic fracturing service provider. 

This is compelling news as this will make the company the first publicly-traded, pure-play electric completions service provider. 

USWS also said that it has entered into a definitive agreement to sell certain diesel-powered hydraulic fracturing equipment to a privately-held buyer for net proceeds of $21 million. That deal is subject to customary closing conditions. 

The company went on to say that it’s in active negotiations with several counterparties and anticipates entering into a series of additional transactions to sell the majority of its remaining diesel fracturing equipment as well as certain power generation assets. 

All in all, these sales are expected to generate more than $100 million in cash from non-core asset divestitures, with net proceeds expected to reduce outstanding indebtedness and fund general corporate purposes, including the buildout of its next-generation all-electric fracturing fleets. 

Management Commentary

In a statement, Joel Broussard, President and CEO at USWS, had the following to offer:

We are excited to execute on our strategy and become fully-electric. U.S. Well Services has believed in the superiority of electric technology since our first Clean Fleet® was deployed in 2014. Today, we are beginning to realize our vision of going all-electric, reducing a significant amount of our outstanding debt and streamlining our focus to become the new market leader in our industry.

By exiting the diesel frac services market, USWS is expected to make great progress in reducing our financial leverage and repositioning our asset portfolio to be the most competitive and environmentally friendly in the business. This is a pivotal time for our company and our industry, and USWS is choosing to invest for the future and focus on a segment of the market that offers attractive growth and returns.

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The Bottom Line

The bottom line here is that this news is huge. Not only is the company joining the go-green movement, one that has garnered quite a bit of attention from investors, but it’s improving its cash position in the process. All in all, this makes USWS stock one that’s hard to ignore.