MIDLAND, Texas, Sept. 5 /PRNewswire-FirstCall/ -- Basic Energy Services, Inc. (NYSE: BAS) ("Basic") announced today it recently acquired all of the outstanding capital stock of Chaparral Services, Inc. ("Chaparral") and purchased substantially all of the operating assets of Reddline Services, LLC ("Reddline"), for a total combined consideration of approximately $20 million in cash, excluding working capital acquired. Projected full-quarter revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) for the combined transactions are expected to be approximately $4.8 million and $1.4 million, respectively.
- Chaparral provides well servicing and fluid services in southeastern New Mexico. This acquisition includes four well servicing rigs, 28 fluid services trucks, two brine wells and one salt water disposal well. The acquired operations have been integrated into the company's Northern Permian Region and significantly expand the company's presence in the western portion of the Permian Basin. This acquisition increases Basic's well servicing fleet count to 356 rigs at August 31, 2006.
- Reddline provides rental and fishing tools services in northwest Oklahoma. The acquired operation has been integrated into Basic's Rental & Fishing Tool Division and increases the company's coverage of the western Oklahoma market.
The Company also announced today that its Board of Directors has recently approved a capital budget supplement of $47 million to cover $20 million of additional capital for 2006 and $27 million in preliminary capital commitments for 2007. The supplement raises the total capital budget to $132 million for 2006. A majority of this increase is due to spending required in 2006 for the long lead items to be delivered in 2007. Approximately $3 million of the 2006 spending will fund further expansion of Basic's recent entry in the rental and fishing tools service business.
Following the authorization of the budget supplement, Basic increased its current newbuild rig program by an additional 18 rigs. The rigs ordered under this supplement will be delivered during the April 2007 through December 2007 time frame. Basic's newbuild rig program now stands at 120 rigs, of which 54 rigs have been delivered since October 2004.
Ken Huseman, Basic's President and CEO, stated, "This announcement reflects the balanced approach between acquisition and internal growth we are following in building the company.
"The Chaparral acquisition fills a major gap in our coverage of the Permian Basin market by adding a sizable fluid services fleet and well-qualified drivers and management to build on our established well servicing infrastructure in eastern New Mexico. The Reddline deal on the other hand, represents the type of small acquisitions which add the management foundation for growth in new services and stretch the boundaries of the markets we cover.
"Our expanded capital budget reflects the opportunities we see within our existing operations and the confidence we have in our field management. We are making long-term commitments in acquiring significant new assets to provide our area and region management the resources they need to expand our local businesses throughout the footprint we have established."
Basic Energy Services, with a fleet of more than 350 well servicing rigs, provides a range of well site services to oil and gas drilling and producing companies throughout the major oil and gas regions in Texas, Louisiana, Oklahoma, New Mexico and the Rocky Mountain States.
Safe Harbor Statement
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Basic has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) Basic's ability to successfully execute, manage and integrate acquisitions, (ii) changes in demand for services and any related material impact on our pricing and utilizations rates and (iii) changes in our expenses, including labor or fuel costs. While Basic makes these statements and projections in good faith, neither Basic nor its management can guarantee that the transactions will be consummated or that anticipated future results will be achieved. Basic assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise.
Contacts: Alan Krenek, Chief Financial Officer
Basic Energy Services, Inc.
Jack Lascar/Sheila Stuewe DRG&E / 713-529-6600
SOURCE Basic Energy Services, Inc.
CONTACT: Alan Krenek, Chief Financial Officer, Basic Energy Services, Inc., +1-432-620-5510; or Jack Lascar or Sheila Stuewe, both of DRG&E, +1-713-529-6600, for Basic Energy Services, Inc.