Basic Energy Services Inc. of Fort Worth has reported a revenue decline in first-quarter 2015, dropping 35 percent to $261.7 million from $400.9 million in fourth quarter 2014 and 21 percent from $331.3 million from first quarter 2014.
Meanwhile, the oil and gas well-services company reported a net loss of $32.6 million, or 81 cents per basic and diluted share in first quarter 2015 compared to a net loss of $18.8 million, or 45 cents per basic and diluted share reported in fourth quarter 2014.
In the first quarter of 2014, the company reported a net loss of $3.3 million, or 8 cents per basic and diluted share.
Adjusted earnings before interest, taxes, depreciation and amortization dropped to $27.3 million, or 10 percent of revenues for the first quarter of 2015 compared to $85.6 million, or 21 percent, in fourth quarter 2014. Adjusted EBITDA is net income before interest, taxes, depreciation and amortization, and the net gain or loss from disposing assets.
“Our first quarter results reflect the overall impact of the rapid decline in oil prices that began during the fourth quarter of 2014,” said president and CEO Roe Patterson in a news release.
“This challenging environment has triggered drastic capital spending reductions by our customers, resulting in the scaling back of our operations to fit operating cash flow in order to preserve liquidity and match customer activity,” Patterson said.
Impacting the company’s first quarter performance were weather disruptions that reduced its revenue, Patterson said. Its workforce also continues to shrink as the company pares employees.
“Our overall headcount is now 20 percent lower than its peak of mid fourth-quarter 2014,” Patterson said.
The company also is allocating assets into markets where activity is strongest, as well as boosting its stacked well-servicing rig count by 40 during the first quarter and adding to it in April.
“We have successfully employed these defensive strategies in previous down cycles, and combined with the strength of our current financial position, these strategies should allow us to withstand the effects of a prolonged downturn in activity,” Patterson said.
Well servicing revenues dropped 28 percent to $63.7 million during first quarter 2015 compared to $88 million in the prior quarter, which the company attributes to lower utilization resulting from price cuts related to competitoin, among other factors.
As of March 31, 2015, the firm’s well servicing rig count totaled 421, the same as the end of the prior quarter. Rig hours totaled 163,900 in first quarter 2015, down from 204,400 in the previous quarter and down from 209,700 hours in same period last year.
Rig utilization totaled 55 percent in first quarter 2015, compared to 67 percent in the prior quarter and 70 percent in the first 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 4,700 workers in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, California and the Rocky Mountain and Appalachian regions. More information about the company and its latest quarterly results is available at www.basicenergyservices.com.