Nuverra Environmental Solutions, Inc. (Form: 8-K, Received: 10/05/2018 17:10:49)

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

Date: October 5, 2018

/s/ Joseph M. Crabb

Joseph M. Crabb

Executive Vice President and Chief Legal Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 5, 2018

Nuverra Environmental Solutions, Inc.

(Exact Name of Registrant as Specified in Charter)


Delaware	001-33816	26-0287117
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6720 N. Scottsdale Road, Suite #190, Scottsdale, Arizona		85253
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (602) 903-7802

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions ( see General Instruction A.2.):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

☐	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 7.01

Regulation FD Disclosure.

On October 5, 2018, Nuverra Environmental Solutions, Inc. (“Nuverra” or the “Company”) issued a press release announcing that it has acquired Clearwater Solutions and that it will host a conference call with investors to discuss the acquisition of Clearwater Solutions at 8:30 a.m. EST on Monday, October 8, 2018. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

On October 5, 2018, Nuverra also made available on its website at www.nuverra.com, under “Investors”, an investor presentation dated October 5, 2018 relating to the acquisition of Clearwater Solutions that the Company intends to use during its conference call with investors to discuss the acquisition. A copy of the investor presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 7.01, and including Exhibit 99.1 and Exhibit 99.2 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing. The contents of any URLs referenced in the press release are not incorporated into this Current Report on Form 8-K or any other filings with the Securities and Exchange Commission.

The information contained in the investor presentation is summary information that should be considered in the context of materials filed with, or furnished to, the Securities and Exchange Commission by the Company and other public announcements that the Company may make by news release or otherwise from time to time. The investor presentation speaks only as of the date of this Current Report on Form 8-K. While the Company may elect to update the investor presentation in the future to reflect events and circumstances occurring or existing after the date of this Current Report, the Company expressly disclaims any obligation to do so and cautions that the information set forth therein is only accurate as of the date indicated on such materials.

By filing this Current Report on Form 8-K and furnishing the investor presentation, the Company makes no admission or representation as to the materiality of any information in this Current Report or the investor presentation. The investor presentation may contain forward-looking statements. See Page 2 of the investor presentation for a discussion of certain forward-looking statements that may be included therein and the risks and uncertainties related thereto. Other important risks and uncertainties that may affect the Company’s business, results of operations and financial position are discussed in its most recently filed Annual Report on Form 10-K and in its Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other Securities and Exchange Commission filings. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to any forward-looking statements.

Item 9.01

Financial Statements and Exhibits


Exhibit Number		Description

99.1		Press Release, dated October 5, 2018

99.2		Investor Presentation, dated October 5, 2018

EXHIBIT INDEX


Exhibit Number		Description

99.1		Press Release, dated October 5, 2018

99.2		Investor Presentation, dated October 5, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

Nuverra Environmental Solutions Acquires Clearwater Solutions

•

Receives committed subscriptions for planned $32.5 million equity rights offering

•

Upsizes and extends first lien credit facility with $10 million additional term loan

•

Paid down $10 million of second lien term loan

•

Nuverra Q3 operating activity and pricing remain strong

Nuverra Environmental Solutions, Inc. (NYSE American: NES) today announced it has acquired Clearwater Solutions, a leading operator of saltwater disposal wells (SWDs) in the Marcellus and Utica Shale areas, for $41.9 million, subject to customary purchase price adjustments.

This purchase more than doubles Nuverra’s SWD capacity in the region and will add value for each of its customers with more strategically located disposal capacity. Clearwater’s disposal wells at the Clearwater Three and Clearwater Five locations offer several offloading lanes and disposal capacity of 17,500 barrels per day. Its locations are in Guernsey County, Ohio, which is in the heart of the regional oil and gas activity.

Charlie Thompson, Interim Chief Executive Officer said, “The Clearwater acquisition significantly improves our competitive position in the Northeast marketplace due to the added capacity of the new wells and logistical advantages for our trucking business. Based on recent volume statistics, Nuverra will be the second largest commercial operator of SWDs in the region. Clearwater’s 2018 forecasted normalized EBITDA is approximately $8 million before synergies. Synergies expected to be realized through integration with our trucking operations would reduce the post-synergy acquisition multiple to less than four times EBITDA.”

In connection with this transaction, Nuverra’s two largest shareholders have provided financing of $32.5 million in the form of a bridge loan that will be repaid with proceeds from a planned offering to shareholders of common stock purchase rights. The rights offering will be made available to all shareholders on a pro rata basis and bridge loan lenders have committed to purchase the shares underlying any rights that are not exercised by other holders. In addition, the Company amended its first lien term loan to extend its maturity and received an additional $10 million of term loan proceeds that funded a portion of the Clearwater purchase price and made various other modifications to give the Company additional flexibility.

Conference Call Scheduled for October 8, 2018 at 8:30 am EST

Nuverra executives will comment on the acquisition of Clearwater Solutions during a live conference call, which is scheduled to begin at 8:30 am EST on Monday, October 8, 2018. Interested parties may participate in the call by dialing 800-263-0877 and using passcode 1015683. Please see the “Nuverra Acquires Clearwater” presentation on our Investor Website at www.ir.nuverra.com for additional details.

About Clearwater Solutions

Clearwater is a leading provider of safe, environmentally friendly disposal of waste water used by the oil and gas industry in the Marcellus and Utica Shale areas.

About Nuverra

Nuverra Environmental Solutions, Inc. is among the largest companies in the United States dedicated to providing comprehensive, full-cycle environmental solutions to customers in the energy market. Nuverra focuses on the delivery, collection, treatment, and disposal of restricted solids, water, wastewater, waste fluids, and hydrocarbons. The Company provides its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Find additional information about Nuverra in documents filed with the U.S. Securities and Exchange Commission (“SEC”) at http://www.sec.gov .

Forward-Looking Statements Disclosure

This press release contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. You can identify these and other forward-looking statements by the use of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,” “would,” “could,” “potential,” “future,” “continue,” “ongoing,” “forecast,” “project,” “target” or similar expressions, and variations or negatives of these words.

These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, and any forward-looking statements contained herein are based on information available to us as of the date of this press release and our current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include, among others: the effects of our completed restructuring on the Company and the interests of various constituents; risks and uncertainties associated with the restructuring process, including the outcome of a pending appeal of the order confirming the plan of reorganization and our ability to execute the requirements of the plan of reorganization subsequent to the effective date; the loss of one or more of our larger customers; our ability to attract and retain key executives and qualified employees in key areas of our business; our ability to attract and retain a sufficient number of qualified truck drivers in light of industry-wide driver shortages and high-turnover; risks associated with our indebtedness, including changes to interest rates, decreases in our borrowing availability, our ability to manage our liquidity needs and to comply with covenants under our credit facilities; the availability of less favorable credit and payment terms due to changes in industry condition or our financial condition, which could constrain our liquidity and reduce availability under our revolving credit facility; difficulties in successfully executing our growth initiatives, including identifying and completing acquisitions and divestitures, and differences in the type and availability of consideration or financing for such acquisitions and divestitures; higher than forecasted capital expenditures to maintain and repair our fleet of trucks, tanks, equipment and disposal wells; control of costs and expenses; risks associated with the limited trading volume of our common stock on the NYSE American Stock Exchange, including potential fluctuations in the trading prices of our common stock; risks associated with the reliance on third-party analyst and expert market projections and data for the markets in which we operate; risks associated with changes in industry practices and operational technologies and the impact on our business; present and possible future claims, litigation or enforcement actions or investigations; financial results that may be volatile and may not reflect historical trends due to, among other things, changes in commodity prices or general market conditions, acquisition and disposition activities, fluctuations in consumer trends, pricing pressures, transportation costs, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate; changes in customer drilling, completion and production activities, operating methods and capital expenditure plans, including impacts due to low oil and/or natural gas prices or the economic or regulatory environment; risks associated with the operation, construction, development and closure of saltwater disposal wells, solids and liquids treatment and transportation assets, landfills and pipelines, including access to additional locations and rights-of-way, environmental remediation obligations, unscheduled delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives; the effects of competition in the markets in which we operate, including the adverse

impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets; changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty; reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations; the impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation, treatment and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts; risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal, transportation and treatment of liquid and solid wastes; and natural disasters, such as hurricanes, earthquakes and floods, or acts of terrorism, or extreme weather conditions, that may impact our business locations, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve.

The forward-looking statements contained, or incorporated by reference, herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s views as of the date of this press release. The Company undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, changes in expectations or otherwise. Additional risks and uncertainties are disclosed from time to time in the Company’s filings with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

Source: Nuverra Environmental Solutions, Inc.

Contact: Ed Lang

602-903-7802

ir@nuverra.com

Nuverra Acquires Clearwater October 5, 2018 Exhibit 99.2

Cautionary Statements This presentation includes forward-looking information. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this presentation is not a guarantee of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking information contained in this presentation. A number of important factors could cause actual results to differ materially from those contained in or implied by the forward-looking statements, in particular, the achievement of macroeconomic, financial and operational objectives, none of which we can guarantee. As a result, all forward looking financial and operational information included herein are not customary, not delivered in the ordinary course and are highly dependent on factors outside of our control and as a result, are purely indicative in nature. The forward looking financial and operation information presented herein should be considered in light of these factors. Any forward-looking information presented herein is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, changes in future operating results over time or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also disclosed in this presentation certain non-GAAP financial information including EBITDA and adjusted EBITDA. These financial measures are not recognized measures under GAAP, and are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Furthermore any transactions described herein are illustrative in nature and subject in all respects to, among other things, due diligence, analysis of tax effects and structure, and negotiation and execution of all necessary document and agreements. Any offer of securities in connection with these materials will only be made in compliance with all applicable securities laws and other laws. These materials shall not and do not constitute, nor shall it be deemed to constitute, a commitment to the illustrative transactions outlined herein and no party shall be obligated in any way by these materials or any of the terms and provisions hereof. These materials do not create and are not intended to create a duty to negotiate in good faith definitive agreements and may not be relied upon as the basis for a contract by estoppel or otherwise, and does not constitute an offer to sell or a solicitation of an offer to buy securities.

Transaction Summary On 10/05/18, Nuverra Environmental Solutions acquired Clearwater Three, LLC and Clearwater Five, LLC for $41.9 million in cash Nuverra is now the second largest commercial disposal well operator in the region(1) Nuverra borrowed $32.5 million under a bridge loan facility provided by major shareholders Received committed subscriptions for planned $32.5 million equity rights offering to be offered to all shareholders Amended first lien term loan, receiving an additional $10 million of proceeds; additional flexibility on the existing revolver, resulting in approximately $11 million of additional liquidity $10 million of bridge loan/rights offering proceeds paid down the existing 2nd lien term loan facility; following the completion of the rights offering, Nuverra’s debt to TTM pro-forma adjusted EBITDA(2) will be less than 1.5x Proforma the transaction, Nuverra has over $20 million of liquidity, including cash and revolver availability Transaction Details Clearwater Overview Clearwater owns and operates two disposal facilities in Eastern Ohio along interstate 70 and interstate 77, serving customers in the Marcellus/Utica shale area The two disposal facilities (3 wells) have permitted capacity of up to 17,500 BPD including a total of six truck unloading lanes Based on 2017 volumes; data provided by Cap Resources Based on TTM Nuverra adjusted EBITDA and Clearwater’s normalized EBITDA through August; refer to appendix for reconciliation to GAAP

Clearwater Three Year Built: 2014 Number of Wells: 2 Acres: 4.5 Capacity – 11,500 BBLS/day Unload lanes - 4 Average unload time - 15-20 minutes Third Party haulers accepted Hours of Operation - 24 hours a day, 365 days a year Acceptable Injection Fluids Fresh/Containment/Ground Water (with prior consent) Flowback Water Produced Water Chief’s Order Process Water

Clearwater Five Year Built: 2017 Number of Wells: 1 Acres: 16.4 Capacity – 6,000 BBLS/day Unload lanes - 2 Average unload time - 15-20 minutes Third Party haulers accepted Hours of Operation - 24 hours a day, 365 days a year Acceptable Injection Fluids Fresh/Containment/Ground Water (with prior consent) Flowback Water Produced Water Chief’s Order Process Water Direct Pipe Water from onsite Mud Processing facility

Market Outlook The market outlook for the area is robust, indicating 20% to 30% volume increases in the 2018-2019 timeframe Long term trends are also robust, as pipeline capacity and gas plants support demand increases of 35% by 2019 The higher volumes are coming into central Ohio (home of Clearwater wells) – mostly from Ohio and secondly from Pennsylvania Out of state water trucked to Ohio for disposal is increasing; Operators report signs of congestion at disposal wells, capacity tightening up Trend across the board is more water used per unit of gas produced 2018 Backdrop Ohio 2017 gas production +20% over 2016 Ohio disposal +19% in 2017 over 2016 WV 2017 reported water production +50%; PA 2017 water production reported +28% PA drilling permits +55% over January 2017; PA wells drilled +61% over January 2017; WV drilling permits +100% over 2017 Appalachia region gas production expected to grow by 21% in 2018 Rig count in PA +71% over 2016 (two-year increase) Outlook

Clearwater Financial Profile – Improving Performance Normalized EBITDA(2) ($ 000’s) Revenue ($ 000’s) and Volume (BPD) Clearwater financial performance has improved throughout 2018; volume +23% between January and August and pricing +13% CW 5 came online in mid 2017 with Q4 17 representing the first full quarter of normalized activity August 2018 set record volumes at 13KBPD Post-synergy acquisition cost multiple projected to be less than four times EBITDA (1) Based on YTD results + 3 month average run rate for remainder of the year (2) Based on YTD results + 3 month average run rate; EBITDA normalized for known cost synergies identified by Clearwater; refer to appendix for reconciliation; does not reflect additional operational synergies expected by Nuverra

Significant Synergies Nuverra currently services the Marcellus/Utica shale area with trucking locations and customers in Eastern OH, Western PA and Northwest WV These volumes go primarily to the Goff and Nichols disposal facilities and secondarily go to the Northern Ohio disposal facilities The addition of the Clearwater facilities is expected to improve trucking efficiencies through route optimization; increasing per shift volumes 35% CW3 CW5 Nuverra expects increased margins on existing work, as well as increased driver capacity to pursue additional revenue opportunities Nuverra’s existing trucking and logistics resources are expected to increase volumes at the Clearwater facilities while continuing to fully utilize the Goff and Nichols facilities

Clearwater Expansion Opportunities Second Well at CW5 Truck Lane and Storage CW 5 is permitted for a second disposal well at its facility Based on customer demand, Nuverra plans to drill this second well, although exact timing is still to be determined Initial estimates indicate new well capacity will likely range between 3 KBPD and 6 KBPD Future Truck Synergies Nuverra plans to immediately add a 3rd truck offloading lane at the CW5 facility to maximize truck synergies Nuverra plans to add additional tank storage at CW5 to increase facility utilization rates Additional synergy opportunities include: Parking and dispatching trucks out of CW facilities to improve route efficiencies Adding bulk fuel islands at CW facilities to improve bulk fuel usage (lowest cost fuel option) Implementing CW technology package at Nuverra’s wells to improve automation Significant expansion opportunities going forward

Nuverra Q3 Operational Update Adjusted EBITDA* ($ millions) Adjusted Revenue* ($ millions) Activity and pricing has remained strong in Q3 2018 Q3 marked the beginning of a number of initiatives that will provide benefit to 2019 financials 28 new high capacity trucks ordered for the Northeast Division (delivery expected in Q4 2018-Q1 2019) Driver count improved by almost 30 drivers during the third quarter to 351 Cost savings initiatives implemented in Q3, with more expected through year end * Adjusted Revenue and Adjusted EBITDA have been adjusted to remove the Eagle Ford basin (previously part of the Southern region), AWS and the construction business (both previously part of the Northeast region); those businesses have been exited as of June 30, 2018.

Appendix Reconciliation of Non-GAAP Financials

Nuverra Non-GAAP Reconciliations – Adj Revenue 1 For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the three months ended September 30, 2017. 1

Nuverra Non-GAAP Reconciliations – Adj EBITDA 1 3 For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the three months ended September 30, 2017. Capital reorganization costs in 2017 represent costs related to the chapter 11 filing incurred prior to the May 1, 2017 filing date. Capital reorganization costs in 2016 represent costs incurred for the debt exchange executed in 2016. Reorganization items, net represents the costs related to the chapter 11 filing incurred after the May 1, 2017 filing date including the gain for early extinguishment of debt. 2 2 1 3

Clearwater Non-GAAP Reconciliations – Normalized EBITDA

Clearwater Capital Expenditure Details Reflects additional trucking lane and storage at CW 5 as part of integration, yet to be spent 1 1