MIDLAND, Texas, July 6 /PRNewswire-FirstCall/ -- Basic Energy Services,
Inc. (NYSE: BAS) ("Basic") today reported selected operating data for the
month of June 2009. The well servicing rig count was unchanged at 414 as of
June 30, 2009. Well servicing rig hours for the month of June 2009 were
38,900, producing a rig utilization rate of 39%, an increase from 37% in May
2009 and down from 79% in June 2008.
Drilling rig days for the month of June 2009 were 112 producing a rig
utilization of 41%, unchanged from 41% in May 2009 and a decrease from 83% in
Basic's fluid services truck fleet was unchanged at 805 trucks as of June
Ken Huseman, Basic's President and Chief Executive Officer, stated, "Well
servicing utilization improved in June driven by stronger demand in
oil-oriented markets that more than offset continued weakness in our gas
markets. Strong and stable oil prices supported a resumption of routine
maintenance and workover activity, particularly in our core Permian Basin
market. Pricing remained fairly consistent across all service lines.
"In our May operating data report, we projected that revenues for the
second quarter would be approximately 23-25% lower than the first quarter with
each of our major business segments being equally affected. Based on our June
operating activity, our second quarter revenues should be within that range.
"For the remainder of 2009, we expect moderate but steady improvement in
demand for our services. Oil prices above $50 per barrel support a much
higher level of maintenance and capital spending for oil-related projects than
we have seen over the last six months, and we are encouraged by our customers'
comments regarding near term plans for drilling and workover projects
commencing in the third quarter.
"While we expect gas activity to remain restrained until wellhead prices
exceed $5 per mcf, we anticipate that many of our customers will resume
investing in workover projects to maintain production from existing wells.
And we expect pricing across all service lines will continue to be pressured
through year-end as the industry markets substantially more equipment than
demand can currently support.
"Preserving liquidity has been a primary objective this year. We have
aggressively reduced headcount, reduced operating costs across the board and
minimized capital spending. The effect of these spending and cost reduction
initiatives will be fully reflected in the third quarter. We will continue to
benefit from the relatively young age of our equipment fleet which will allow
us to address projected improvements in utilization with a very low level of
capital spending for the remainder of the year."
Credit Facility Update
At June 30, 2009, Basic had $180.0 million outstanding under its credit
facility with $28.8 million available for borrowing. Based on projected
market conditions, Basic currently expects that it will not be in compliance
with certain covenants under its credit facility in certain future periods.
Basic expects to evaluate various alternatives in the next few months with
respect to its credit facility. Pending amendment or modification of its
credit facility, Basic does not currently expect to make any future borrowings
under this credit facility. Basic's cash position at June 30, 2009 was
approximately $134 million. Basic believes that operating cash flows together
with its cash and cash equivalents, including cash from anticipated
financings, will be sufficient to fund its liquidity requirements for the
June 30, May 31,
2009 2008 2009
Number of weekdays in
period 22 21 21
Number of well
servicing rigs: (1)
Weighted average for
period 414 408 414
End of period 414 409 414
Rig hours (000s) 38.9 74.2 35.0
rate(2) 39% 79% 37%
Number of drilling rigs: (1)
Weighted average for
period 9 9 9
End of period 9 9 9
days 112 224 113
utilization 41% 83% 41%
Number of fluid service
Weighted average for
period 805 677 806
End of period 805 678 805
(1) Includes all rigs owned during periods presented and excludes rigs
held for sale.
(2) Rig utilization rate based on the weighted average number of rigs
owned during the periods being reported, a 55-hour work week per rig and
the number of weekdays in the periods being presented.
Basic Energy Services provides well site services essential to maintaining
production from the oil and gas wells within its operating area. The company
employs more than 3,900 employees in more than 100 service points throughout
the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New
Mexico, Arkansas, Kansas and the Rocky Mountain States.
Additional information on Basic Energy Services is available on the
Company's website at http://basicenergyservices.com.
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) changes in demand for Basic's services and any related material impact on
our pricing and utilizations rates, (ii) Basic's ability to execute, manage
and integrate acquisitions successfully and (iii) changes in our expenses,
including labor or fuel costs and financing costs. Additional important risk
factors that could cause actual results to differ materially from expectations
are disclosed in Item 1A of Basic's Form 10-K for the year ended December 31,
2008, and subsequent Form 10-Q's filed with the SEC. While we make these
statements and projections in good faith, neither Basic Energy Services 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.