CALGARY, AB – The financially troubled Aveda Transportation and Energy Services Inc. is making a series of changes, including shuffling its leadership and big cutbacks. 

The provider of oilfield hauling services and equipment rentals to the energy industry will consolidate the majority of its U.S. corporate office in Houston, TX, including all Houston-based corporate level positions, into its head office in Calgary, AB.

Due to the consolidation, President and CEO Kevin Roycraft will be leaving the company with David Werklund taking over as interim president and CEO of Aveda.

The board of directors of Aveda, who thanked Roycraft for his service and “significant contributions,” will immediately begin a search for a permanent president and CEO who “has experience in transportation and logistics management.”

Roycraft has agreed to assist the interim president and CEO until Nov. 6 while Werklund will remain as executive chairman and a member of the company’s board of directors.

“Adjusting to the current economic climate has been an arduous task. We, like many other oilfield service companies are making the difficult decisions to be successful in our new reality,” said Werklund. “We sincerely appreciate the support of our people as we make the necessary changes for Aveda’s future growth and success.”

Aveda also announced it will obtain this month early release of the $1.3 million held in escrow from the sale of the assets of Hodges Trucking Co. an Oklahoma-based carrier it acquired this past summer.

The company anticipates generating between $22 million and $24 million in revenue in the third quarter of 2015. Aveda has generated an Adjusted EBITDA loss of approximately $3.3 million for the combined months of July and August 2015 and is expecting a further Adjusted EBITDA loss in September.

During the third quarter of 2015, Aveda said eliminated a total of 51 administrative and non-revenue generating positions in the field, including, corporate positions in Calgary and Houston.

In addition, Aveda closed its branch in Mineral Wells, TX becasue there are only four rigs operating in that area and also merged its Cherokee, OK branch with its Oklahoma City, OK branch. The company expects this will generate operational savings of approximately $5 million annually, which are in addition to the cuts Aveda previously announced.

In 2015, oil drilling activity in Western Canadian and U.S. has been negatively hit by lower average oil and natural gas prices compared to 2013 and 2014. This has largely been the result of increased supply in both the U.S. and other oil producing countries, combined with slowing demand in large economies such as China and Europe, explained Aveda.

“As a result, most oilfield service companies are seeing a very competitive environment for their services,” Aveda said in a statement. “This has been especially true in the rig moving and rental markets in which Aveda operates in. Even though the company is invited to bid on a vast variety of projects, many bids are being lost due to competitors creating unsustainable pricing pressures for the industry and pricing services at levels, which would generate negative gross profit margins.”

Aveda said it is also taking “aggressive action” to manage overtime in the field and is looking at additional wage cuts for employees.

Aveda was incorporated in 1994 as a private company and went public in 2006.