Industry
Energy
Challenge
As aresult of the recent energy industry downturn, Enseco became financially challenged and went into receivershipin 2015
Results
PWC received immediate capital for Enseco’s insolvent assets, enabling it to fulfill receivership obligations by payingEnseco’s creditors
The Challenge
Enseco was a leading supplier of directional drilling and production testing services to the energy industry. As a result of the recent energy industry downturn, Enseco became financially challenged and went into receivership in 2015. PricewaterhouseCoopers (PWC), a leading professional services network, was then brought in to manage this company’s insolvent assets on behalf of its creditors across several North American sites.
Enseco’s wide range of assets included everything from pressure vessels to trailers to valve manifolds to laptops and monitoring equipment. PWC aimed to efficiently liquidate this surplus, turning it into working capital to help pay off Enseco’s creditors. It also sought to free up resources by discharging its legal obligation as custodian of Enseco’s sites. Since selling and managing energy surplus is not among PWC’s core competencies, it turned to an outside partner to assume this burden and provide working capital by purchasing Enseco’s assets outright.
The Solution
PWC selected Tiger Liquidity Services Energy Partners (TLSEP) to purchase Enseco’s surplus assets at sites in Casper, Wyoming and Minot, North Dakota. With deep expertise in energy equipment and the secondary market, we could provide competitive offers to PWC throughout the bid process that shifted assets and deal requirements.Flexibility, responsiveness, and knowledge ensured our final offer met the goals of PWC and its constituents.
PWC received immediate cash for the assets through TLSEP’s “purchase” model. We also offer a “guarantee”
model in which the client receives immediate payment and additional recovery if secondary-market sales
surpass a determined milestone. In our commission model, the client is paid based on actual recovery generated in the secondary market – this option can result in the highest recovery value. TLSEP works closely with clients to determine the best purchase model for their situation.
TLSEP sold Enseco’s assets through an online auction. Tapping our energy industry and secondary market expertise, we reached a wide range of targeted energy buyers, ultimately achieving over 3,000 bids from over 100 bidders for 200 assets. We sold all assets in place at Enseco’s sites and arranged inspections, pickups, and compliant removal to ensure the sales concluded smoothly.
The Results
PWC received immediate capital for Enseco’s insolvent assets, enabling it to fulfill receivership obligations by paying Enseco’s creditors. Getting immediate cash for the assets helped PWC pay more quickly while avoiding potential risks in the secondary market. By taking over custodianship of the two sites, TLSEP removed a significant obligation from PWC, freeing up additional resources.
Since the secondary energy market is usually not a core focus area for insolvency organizations, they often lack the resources and knowledge needed to achieve desired recovery levels. By partnering with TLSEP, however, PWC efficiently achieved maximum recovery while outsourcing the complexities inherent to the sale and management of surplus energy assets.
