Basic Energy Services Reports Selected Operating Data for September 2012
Basic Energy Services (NYSE: BAS) today reported selected operating data for the month of September 2012. Basic's well servicing rig count remained unchanged at 431. Well servicing rig hours for the month were 67,500 producing a rig utilization rate of 71%, compared to 75% and 74% in August 2012 and September 2011, respectively.
During the month, Basic's fluid service truck count increased by seven trucks to 940. Fluid service truck hours for the month were 175,000 compared to 191,800 and 186,500 in August 2012 and September 2011, respectively.
Drilling rig days for the month were 289 producing a rig utilization of 80%, compared to 91% and 89% in August 2012 and September 2011, respectively.
Ken Huseman, Basic's President and Chief Executive Officer, stated, "Activity declined in each of our operating segments compared to August due to fewer workdays and the Labor Day holiday. Our well servicing segment, which predominantly provides production maintenance services, was impacted most severely with an estimated three percentage point reduction in utilization due to the Labor Day holiday. Although competition continues to intensify as completion-related demand has declined, we have been able to hold well servicing pricing flat.
Our fluid services truck hours declined sequentially despite the addition of a few more trucks in our Permian Business Unit. Increased competition in the form of startups and continued equipment migration from slower markets has put pressure on rates in our oilier markets. Our Completion and Remedial Services segment, particularly our stimulation services, experienced lower activity and pricing levels along the lines we had expected. Contract Drilling utilization in September dropped to 80% from 91% in August due to delays on several of our rigs that are on a well to well basis. We also used one of our rigs on an internal project in our fluid services segment, which negatively impacted utilization.
"We expect that revenue for the third quarter will be down five to six percent sequentially, which is a larger decline than our previous guidance of three percent. We continue to anticipate that revenue in the fourth quarter will be down three to five percent sequentially, resulting in margins declining about 200 basis points. We currently expect a gradual reduction in activity and pricing into the first part of 2013."
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