Tetra braces for ‘potential weakness’ in Gulf of Mexico activity
U.S.-based oil and gas services company Tetra Technologies is considering capital raise alternatives to strengthen its balance sheet to address potential weakness in 2017 deepwater Gulf of Mexico activity.
Tetra is also looking to address the deferral of certain projects from the fourth quarter of 2016 into early 2017.
According to the company’s statement on Thursday, the delay in these projects is expected to result in the company not being in compliance with one of its debt covenants as of December 31, 2016.
Additionally, the company said it has obtained an interim arbitration award of $7 million plus legal fees on a long-standing claim. The arbitration panel is expected to rule in the fourth quarter on the amount of legal fees that Tetra should be awarded as part of this arbitration process. Both awards are anticipated to be settled in the first half of 2017.
In the statement, Tetra said: “The company believes it has been proactive in preparing for changes in the market environment by managing its cost structure, reducing capital expenditures and strengthening its balance sheet. The company intends to continue taking the actions it believes appropriate to strengthen Tetra financially as it addresses the timing of certain projects in what it believes to be a recovering market.”
The company further said it intends to pursue opportunities to raise the capital necessary to strengthen its balance sheet in order to capitalize on opportunities in the fluids market.