Basic Energy Services Reports Selected Operating Data For January 2015

PR Newswire

FORT WORTH, Texas, Feb. 11, 2015 /PRNewswire/ -- Basic Energy Services, Inc. (BAS) ("Basic") today reported selected operating data for the month of January 2015. Basic's well servicing rig count remained unchanged at 421. Well servicing rig hours for the month were 57,400 producing a rig utilization rate of 56%, compared to 60% and 67% in December 2014 and January 2014, respectively.

During the month, Basic's fluid service truck count increased by seven to 1,054. Fluid service truck hours for the month were 208,100, compared to 218,200 and 207,400 in December 2014 and January 2014, respectively.

Drilling rig days for the month were 275 producing a rig utilization of 74%, compared to 87% and 69% in December 2014 and January 2014, respectively.

Roe Patterson, Basic's President and Chief Executive Officer, stated, "Operating activity in January was affected by a declining drilling rig count and reduced customer spending, as well as adverse weather conditions early in the month mainly in the Permian Basin and Mid-Continent regions. Icy conditions in January reduced well servicing utilization by approximately 400 basis points and fluid service hours by 5 percent. Stimulation services experienced minimal impact during that time as most of the equipment was already on location and service time was generally not disrupted. While utilization in our completion and remedial services segment was steady in January, this segment saw the largest reduction in rate as service assets oriented toward drilling and completion activity were oversupplied in most markets.

"The reduction in customer spending has been swift, and we have reacted quickly to this changing environment. We continue to aggressively protect our market share by reducing prices while simultaneously working with our vendors to offset reduced pricing with lower input costs. Current pricing concessions are in the 15%-20% range for stimulation services and contract drilling and in the 10%-15% range for well servicing and fluid services. Negotiations to lower costs for sand, chemicals, fuel, supplies and other input costs with our vendors and suppliers have been successful and are ongoing.

"In order to offset as much of the pricing concessions as we can, we have worked proactively to control personnel costs as well. Our headcount has declined by approximately 400, or 7% of our work force, since its peak in November 2014. Wages in the field have been adjusted down to reflect lower rates for our services. Additionally, we have implemented salary reductions for all of our management and administrative employees and have made changes to some of our benefit programs. Our primary focus in 2015 is to maximize cash flow and preserve liquidity through lowering costs and drastically reducing capital expenditures. We were fortunate to have very few pieces of equipment on order when we quickly tapered down spending in October of 2014. We're pleased with our operating and financial position heading into what looks to be a prolonged down-cycle.

"During the month of January, we reclassified 29 well servicing rigs to our stacked rig inventory making the total stacked rig inventory 57 at month-end. This allows us to better control cost by ensuring that our newer and more efficient assets remain in the field working. We will discuss our near-term expectations for 2015 during our fourth quarter 2014 earnings call next week."

OPERATING DATA






Month ended





January 31,


December 31,





2015

2014


2014









Number of weekdays in period



22

23


23









Number of well servicing rigs: 1







  Weighted average for period 2



421

421


421

  End of period 2



421

421


421

  Rig hours (000s) 2



57.4

71.8


64.3

  Rig utilization rate 2,3



56%

67%


60%









Number of fluid service trucks: 1







  Weighted average for period



1,051

1,003


1,045

  End of period



1,054

1,003


1,047

  Truck Hours (000s)



208.1

207.4


218.2









Number of drilling rigs: 1







  Weighted average for period



12

12


12

  End of period



12

12


12

  Drilling rig days



275

258


324

  Drilling rig utilization



74%

69%


87%



(1)  

Includes all rigs and trucks owned during periods presented and excludes rigs and trucks held for sale.

(2)   

Basic sold its four inland barge workover rigs on March 31, 2014.  The weighted average number of rigs, number of rigs at the end of the period, rig hours and rig utilization rate for January 2014 has been recalculated as if these four rigs had been sold for that period.

(3)

Rig utilization rate based on the weighted average number of rigs owned during the periods being reported, a 55-hour work week per rig and the number of weekdays in the periods being presented. 

Basic Energy Services provides well site services essential to maintaining production from the oil and gas wells within its operating area.  The company employs more than 5,400 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, and the Rocky Mountain and Appalachian regions.

Additional information on Basic Energy Services is available on the Company's website at http://www.basicenergyservices.com.

Safe Harbor Statement

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Basic has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete.  However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) changes in demand for our services and any related material impact on our pricing and utilizations rates, (ii) Basic's ability to execute, manage and integrate acquisitions successfully and (iii) changes in our expenses, including labor or fuel costs and financing costs.  Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Basic's Form 10-K for the year ended December 31, 2013 and subsequent Form 10-Qs filed with the SEC.  While Basic makes these statements and projections in good faith, neither Basic nor its management can guarantee that anticipated future results will be achieved.  Basic assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise.

Contacts:

Alan Krenek, Chief Financial Officer


Basic Energy Services, Inc.


817-334-4100




Jack Lascar / Stephanie Smith


Dennard – Lascar Associates


713-529-6600

 

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