A Weak Balance Sheet Softens Efforts To Improve Operations
Superior Energy Services (SPN) is pulling out of the drilling rig service and hydraulic fracturing service operations. Its current emphasis includes providing products and services, offered primarily in the offshore market. The strategy can result in lower capex, which can lead to improved free cash flow in FY2020 and beyond. It did generate positive FCF in FY2020.
The gravest financial risk for SPN remains its balance sheet. Not only is has a high level of debt repayment obligation in the medium-to-long term, but accumulated