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Basic Energy Services reports 3Q revenue decline

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Basic Energy Services Inc. of Fort Worth has reported lower revenue in third-quarter 2015, dropping 2 percent to $189.2 million from $193.6 million in the prior quarter as all service lines continued to experience lower activity levels driven by volatile commodity prices and reduced rig count.

The newly released figures follow a second-quarter, after-tax charge of $2.9 million related to credit given to a customer stemming from an audit settlement that the firm said affected both revenue and earnings. Excluding that item, the company reported revenues of $198.1 million in second-quarter 2015.

“Our third-quarter results reflect the impact of the additional decline in the U.S. drilling rig count that took place during the quarter and its effect on demand and pricing for our services,” said president and CEO Roe Patterson in a news release.

Meanwhile, the oil and gas well-services company reported a net loss of $105.6 million, or $2.63 per basic and diluted share, in third-quarter 2015. The quarter included a tax-effected, non-cash charge of $55.1 million for impairment of what the company called goodwill associated with its completion and remedial segment. Excluding the aforementioned audit settlement, Basic reported a net loss of $50.6 million, or $1.26 per basic and diluted share. That compares to a net loss of $48.3 million, or $1.20 per basic and diluted share reported in second-quarter 2015.

Adjusted earnings before interest, taxes, depreciation and amortization dropped to $1.6 million, or 1 percent of revenues, for third-quarter 2015 from $6.1 million, or 3 percent of revenues, in the second quarter of 2015. Adjusted EBITDA is net income before interest, taxes, depreciation and amortization, and the net gain or loss from disposing assets.

Completion and remedial services revenue dropped by 9 percent to $67.2 million in the third quarter from $73.6 million in the prior quarter, excluding the aforementioned special item from the second quarter.

Well servicing revenues dropped 2 percent to $55.5 million during third-quarter 2015 compared to $56.5 million in the prior quarter, which the company attributes to pricing pressure on sequentially flat activity levels.

As of Sept. 30, 2015, the firm’s well servicing rig count totaled 421, the same as the end of the prior quarter. Rig hours totaled 154,100 in third-quarter 2015, down from 154,700 in the previous quarter and down from 217,500 hours in same period last year.

Rig utilization totaled 50 percent in third-quarter 2015, compared to 51 percent in the prior quarter and 71 percent in the third quarter of 2014.

Rig utilization rates determine what percentage of a company’s rigs is in use.

Basic Energy Services, which provides oil and gas well-site services, employs more than 4,200 workers in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas and the Rocky Mountain and Appalachian regions. More information about the company and its latest quarterly results is available at www.basicenergyservices.com.

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