Texas-based Drilling Company Secured $6MM ABL
Gibraltar helps Horizon Mud wade through oil industry challenges with $6 million ABL that included an innovative twist—a large tranche of unbilled accounts receivable.
Horizon Mud Company is a full-service fluid drilling company based in Midland, Tex., that has been in business since 1980. No stranger to the ups and downs of the oilfields, Horizon Mud has faced unprecedented revenue instability since the price of oil began a steeper decline in mid-2014. For Horizon Mud, that meant an 18-month restructuring to right size the company’s cost structure and increase its liquidity to fit today’s reality.
The Gibraltar team, led by Michael Conrad, senior vice president and business development officer of the ABL originations team, came up with what Horizon Mud executives called an “extremely well-tailored credit solution” that unlocked the value of its assets.
“The Gibraltar team provided a creative, flexible and extremely articulate structure that furnished more liquidity,” said Luke Blackwell, Horizon Mud’s chief financial officer. “A successful closing in near-record time was comfortably achieved through the efficient focus and execution of the investment and diligence team.”
Gibraltar accomplished that by structuring the terms of the asset-based line of credit (ABL) with inventory and equipment, as well as receivables, both billed and unbilled. That gave Horizon Mud some breathing room on services and products that had already been delivered but were yet to be invoiced.
For Blackwell, Gibraltar’s “ability to understand and appropriately appraise complex collateral” was only one of the many factors that put Gibraltar head and shoulders above its competitors. He also noted Gibraltar’s “willingness to look at the business” and understand its nuances, as well as the exceptional customer service and swift responsive time to questions and comments. And then there is the financial know-how and flexibility that Gibraltar exhibited, he said.
“By combining technical financial experience with a true customer-service philosophy, Gibraltar exceeded expectations while delivering all that was promised,” Blackwell said.