Drilling rig days for the month of May 2009 were 113 producing a rig utilization of 41%, an increase from 33% in April 2009 and a decrease from 88% in May 2008.
Basic's fluid services truck fleet decreased by a net of two trucks bringing its total to 805 trucks as of May 31, 2009.
Ken Huseman, Basic's President and Chief Executive Officer, stated, "Utilization of our well servicing fleet in May was essentially flat with April as increased activity in our oil markets offset a modest decline in our gas-prone markets. We experienced a further decline in activity in our fluid services segment and in our completion and remedial services segment due to continued weakness in our natural gas-related markets. Our Permian Basin-based drilling segment posted a significant increase in drilling days reflecting the improving fundamentals for oil-related activity. Pricing for all of our services remained competitive in May but seemed to have reached a leveling point.
"We are currently projecting that revenues for the second quarter will be 23-25% lower than the first quarter with each of our major business segments being equally affected.
"Our expectations for the balance of 2009 are for modest monthly improvement in our overall utilization as demand in our oil-oriented markets offsets continued weakness in our gas-related markets. We are seeing our customers starting to resume normal levels of maintenance activity and expect their capital spending to increase for workover and development drilling projects in most areas assuming commodity prices hold at current levels. Pricing will continue to be pressured through year-end as the industry markets substantially more equipment than demand currently supports. We expect the pace of attrition of the active fleet and of weaker competitors to pick up speed through the end of the year which should set the stage for higher utilization and firmer pricing beginning sometime in 2010."
OPERATING DATA Month ended May 31, April 30, 2009 2008 2009 Number of weekdays in period 21 22 22 Number of well servicing rigs: (1) Weighted average for period 414 399 414 End of period 414 408 414 Rig hours (000s) 35.0 73.4 36.6 Rig utilization rate(2) 37% 76% 37% Number of drilling rigs: (1) Weighted average for period 9 9 9 End of period 9 9 9 Drilling rig days 113 246 89 Drilling utilization 41% 88% 33% Number of fluid service trucks: Weighted average for period 806 673 810 End of period 805 675 807 (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.
Contacts: Alan Krenek, Chief Financial Officer
Basic Energy Services, Inc.
Jack Lascar/Sheila Stuewe
DRG&E / 713-529-6600
SOURCE Basic Energy Services, Inc.