Water Tower Research Publishes Initiation of Coverage Report on National Energy Services Reunited Corp., "Exposed to the World's Steadiest Oilfield Service Markets”

Water Tower Research has published an Initiation of Coverage Report on National Energy Services Reunited Corp. (NASDAQ: NESR) titled, "Exposed to the World's Steadiest Oilfield Service Markets”.

ST. PETERSBURG, FL, March 18, 2025 (GLOBE NEWSWIRE) -- March 18, 2025, ST. PETERSBURG, FL - Water Tower Research (www.watertowerresearch.com) has published an Initiation of Coverage Report on National Energy Services Reunited Corp. (NASDAQ: NESR) titled, "Exposed to the World's Steadiest Oilfield Service Markets”. The report can be accessed here.

NESR is the largest publicly listed pure-play diversified oilfield service company focused solely on serving national oil company (NOC) and international oil company (IOC) customers in most of the major Middle East and North Africa (MENA) region markets where it competes with much larger international oilfield service companies, including SLB and Halliburton. It operates in more than 15 countries, from an original anchor business in the Kingdom of Saudi Arabia and Oman. The company now has major operations in Kuwait, the UAE, Iraq, Algeria, and Egypt, in addition to its original anchors. New petroleum licensing in Libya could present NESR with incremental revenue opportunities in that country in the future. The MENA region is one of the most stable oilfield service markets in the world as NOCs in the region are focused on maintaining or increasing production capacity and, in certain countries, including Saudi Arabia, increasing natural gas production. Saudi Arabia accounts for more than 50% of NESR's revenue. Together with Oman, Kuwait, and the UAE, the four countries contribute 75-80% of total revenue.

NESR has grown its oilfield service capabilities through strategic acquisitions and co- investments with technology innovators geared to develop solutions to its customers, complex drilling, and production requirements. Since its formation, NESR has relied on its open technology platform to partner with oilfield technology innovators and gain the exclusive right to market solutions to its customer base across its MENA operating footprint and leverage customer relationships to benefit innovators. NESR's ROYA™ directional drilling platform, launched in February 2024, has received contract awards in Saudi Arabia, Oman, and Kuwait, worth up to $200 million of incremental run-rate revenue over contract life as the platform improves with additional field deployments.

Through its NEDA platform, NESR is working to develop and commercialize decarbonization technologies in the MENA region to lower the environmental intensity of oil & gas production. In Saudi Arabia, the company is developing a closed-loop technology to recycle produced water for oilfield activity.

For FY24, NESR generated adjusted EBITDA of ~$310 million on total revenue of $1.3 billion. FY24 free cash flow totaled $124 million. Our FY25 and FY26 adjusted EBITDA estimates are $318 million and $338 million, respectively. As of December 31, 2024, NESR had $108 million in cash and net debt totaled $279 million. The company is trading at 2.7x and 2.2x our FY25 and FY26 adjusted EBITDA estimates and an 18.7% free cash flow yield based on our FY25 estimate.

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