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Basic Energy: 2Q Earnings Snapshot

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Basic Energy: 2Q Earnings Snapshot
FORT WORTH, Texas (AP) _ Basic Energy Services Inc. (BASX) on Wednesday reported a loss of $44.6 million in its second quarter.
On a per-share basis, the Fort Worth, Texas-based company said it had a loss of $1.79. Losses, adjusted to account for discontinued operations, came to $1.59 per share.
The oil and gas field service company posted revenue of $89.6 million in the period.

Total capital expenditures during the second quarter of 2020 were approximately $1.9 million. Additionally, we received $4.7 million in proceeds from dispositions during the quarter. We currently anticipate full year 2020 capital expenditures of approximately $11 million, of which approximately $2 million will be expansion capital.

Keith Schilling, President and CEO stated, “Basic’s improvement in margins over the course of an extraordinarily challenging second quarter speaks to the resilience and commitment of our team as we emerge from the current market as a new company with a profoundly different cost profile. Having effected our consolidation from five regions to three and reduced our overall G&A and expense structure by over $40 million on an annual basis, we expect second half G&A to be approximately $40 million. Additionally, we saw a marked improvement in results as the quarter progressed, with June being our strongest month since activity in the oilfield began to drop at staggering rates in early March.

“While liquidity remains a challenge in the immediate term, we continue to take measures to preserve cash, having limited capital expenditures to approximately $5 million for the remainder of the year. We believe May was a low point as we are seeing revenues grow sequentially going forward, and we believe liquidity, which is not currently contracting, will continue to improve during the third quarter.

“We finished June with the highest direct margins of the quarter and have visibility on improving margins and EBITDA through the third quarter. We estimate that G&A for the second half of 2020 should total approximately $40 million, adjusted for non-recurring items and non-cash stock compensation, of which we expect less than $1 million for the remainder of the year. With our active well service rig count climbing significantly through the month of July along with increasing disposal water volumes and fluid truck utilization, we expect improved EBITDA and cash flow performance through the fall. Recent indications by customers of plans to reactivate wells, conduct well maintenance, and resume completion activities gives us a degree of cautious optimism in the near-term for increased well service rig deployments and water disposal activity.”


The company’s shares closed at 19 cents. A year ago, they were trading at $1.50.


This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on BASX at https://www.zacks.com/ap/BASX

Additional reporting by FWBP Staff

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