Nuverra Environmental Solutions Inc (NYSE:NES) announced that it has mutually agreed with XTO Energy Inc. (“XTO”) to terminate its contract for water-related midstream services in McKenzie County, North Dakota, due to the dramatic change in market conditions since the contract was executed in November 2014. Mark Johnsrud, Chairman of the Board and Chief Executive Officer, said, “With current low oil prices and substantially reduced drilling activities, there is significant uncertainty regarding customer activities in 2016. Because of these and other factors, we were compelled to end the contract.”
Mr. Johnsrud continued, “We believe this is the most prudent decision and allows Nuverra to continue working with its customers, including XTO, as we structure water midstream agreements that reflect more current market conditions.”
Nuverra remains committed to its long-term water midstream growth strategy. “We have worked diligently during the past year to secure the necessary rights-of-way and to engage world-class engineering, procurement, safety, and construction partners for this particular project,” Mr. Johnsrud said. “On a broader level, we believe investments in water midstream development will bring valuable infrastructure resources, which will benefit our customers through reduced costs and increased reliability when market conditions improve.” (Original Source)
Shares of Nuverra Environmental closed yesterday at $0.5. NES has a 1-year high of $6.78 and a 1-year low of $0.48. The stock’s 50-day moving average is $0.92 and its 200-day moving average is $2.45.
On the ratings front, Nuverra Environmental has been the subject of a number of recent research reports. In a report issued on November 18, Cowen analyst Joseph Giordano downgraded NES to Hold, with a price target of $3, which implies an upside of 500.0% from current levels. Separately, on November 6, Craig-Hallum’s Eric Stine downgraded the stock to Sell .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Giordano and Eric Stine have a total average return of -3.4% and 6.6% respectively. Giordano has a success rate of 25.0% and is ranked #2538 out of 3649 analysts, while Stine has a success rate of 37.5% and is ranked #1206.
Nuverra Environmental Solutions Inc formerly, Heckmann Corp provides environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations.