A company that uses geomembranes and polyethylene sheet for oil and gas containment tanks has a stalking horse bidder for its assets.
Blue Wolf Capital Partners LLC has been named the stalking horse bidder for Extreme Plastics Plus Inc. of Fairmont, W. Va. EPP has been under Chapter 11 bankruptcy protection since Jan. 31 amidst the downturn in U.S. oil and gas development activity, particularly in shale deposit regions.
EPP was founded in 2007 to provide environmental containment services for petroleum drillers in shale deposits in Texas, Oklahoma, Pennsylvania, New Mexico and other U.S. states. It has been erecting and renting above-ground storage tanks to contain fracturing fluids and other liquids used by firms extracting tightly held petroleum reserves in the Marcellus, Utica, Eagle Ford, Permian and Mid-Continent basins.
EPP hopes the stalking horse bid will be the first step to clean up its balance sheet and position EPP for an eventual oil and gas market recovery.
A major supplier of geomembranes and PE liners to EPP, GSE Environmental LLC, indicated it is able to offset lost business in the shale-drilling sector by other activity.
“The slump in this business has put a lot of pressure on companies that have a majority of their business tied to oil and gas,” noted GSE vice president of marketing Steve Eckhart in an email.
“Fortunately for GSE, we have a large customer base in diverse markets so the slowdown in that business has been made up for in other markets.”
GSE shut a geomembrane production plant in Chile in 2015 because of a dip in copper and other minerals production. However, it expanded production capacity a year ago in Kingstree, S.C., to meet demands fueled by new coal ash disposal regulations. GSE also provides geomembranes and liners for a wide range of environmental and infrastructure projects.
Blue Wolf partnered earlier this year with K2 Energy Capital LLC to pursue energy services investments.
“EPP has an impressive track record of providing unique and effective environmental containment solutions to its customers, and these solutions will be in high demand as the market recovers,” predicted Blue Wolf managing partner Adam Blumenthal in a Nov. 1 news release.
An auction for EPP's assets is scheduled for Nov. 17.