Basic Energy Services Reports Selected Operating Data
Basic Energy Services reported selected operating data for the month of March 2009. The rig count was unchanged at 414 at March 31, 2009. Rig hours for the month of March 2009 were 41,400 producing a rig utilization rate of 41%, a decrease from 46% and 71% in February 2009 and March 2008, respectively.
Drilling rig days for the month of March 2009 were 70 producing a rig utilization of 25%, an increase from 22% in February 2009 and a decrease from 93% in March 2008.
Basic's fluid services truck fleet increased by a net of four trucks bringing its total to 813 trucks as of March 31, 2009.
Ken Huseman, Basic's President and Chief Executive Officer, stated, "Fierce competition and weak demand, made worse by high winds toward the end of the month in our largest markets, combined to further reduce utilization and pricing in most of our market areas in March. With the weaker than expected performance in March, we now project our revenues for the first quarter to be approximately 37% lower than the revenue reported in the fourth quarter of 2008.
"Extremely low natural gas prices, concern over the stability of oil prices and limitations on many E&P companies' ability to access capital markets continue to weigh on demand across the spectrum of oil and gas services. We do not see those factors improving significantly in the near term to increase demand for our services.
"While the number of service companies and amount of available equipment has resulted in extreme competition over the last several months, we are seeing early indications that utilization and pricing are stabilizing. Competitors large and small are scaling back operations by stacking equipment or withdrawing from those markets where they have a less defensible position.
"Based on that supply/demand assessment, we currently expect our revenue for the second quarter of this year to be similar to what we anticipate reporting in the first quarter. We have taken steps to reduce our cost structure across all levels of the company to allow us to operate as efficiently as possible while protecting our ability to respond to demand as it develops later in the year."
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