Nuverra Environmental Solutions Dumps Used Motor Oil Unit

Nuverra Environmental Solutions Inc NES shares soared after it agreed to sell its motor oil recycling business called Thermo Fluids Inc. for $85 million in cash.

Nuverra, which will focus on its core clean-up services for the North American shale oil and gas industry, changed hands recently at $3.72, up 19 percent.

The company's shares are down more than 74 percent in the past year, and short interest accounted for nearly 20 percent of its 27.3 million shares outstanding as of January 15.

The environmental services firm Clean Harbors Inc CLH agreed to acquire Thermo, which recycles and sells used motor oil and antifreeze.

Clean Harbors changed hands recently at $48.81, down 1.4 percent.

During the fourth quarter of 2013, Nuverra's board approved a plan to divest the Thermo Fluids unit, which Nuverra had acquired in April 2012 for $246 million.

Nuverra recognized a goodwill impairment charge of $98.5 million in 2013 on the sale, which it initially had expected in the second quarter of 2014. Nuverra's market capitalization is $87 million.

In November, Nuverra took an additional impairment charge of $45.5 million, as well as $3.5 million in estimated transaction costs related to Thermo Fluids.

In the year ended December 2013, Thermo Fluids posted a loss of $98.3 million on revenue of $116.3 million

Nuverra Chief Executive Mark D. Johnsrud said the company's strategy has been to focus on its core shale environmental solutions business,

"We are pleased to monetize our TFI business to provide further support to that strategy."