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."
OPERATING DATA Month ended March 31, February 28, 2009 2008 2009 Number of weekdays in period 22 21 20 Number of well servicing rigs: (1) Weighted average for period 414 394 413 End of period 414 395 414 Rig hours (000s) 41.4 65.0 41.6 Rig utilization rate(2) 41% 71% 46% Number of drilling rigs: (1) Weighted average for period 9 9 9 End of period 9 9 9 Drilling rig days 70 260 55 Drilling utilization 25% 93% 22% Number of fluid service trucks: Weighted average for period 811 645 812 End of period 813 648 809 (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 4,200 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.
Contacts: Alan Krenek, Chief Financial Officer
Basic Energy Services, Inc.
Jack Lascar/Sheila Stuewe
DRG&E / 713-529-6600
SOURCE Basic Energy Services, Inc.