Basic Energy (BAS) Rig Count Flat in June; Servicing Rig Hours Up

July 13, 2012 7:06 AM EDT
Basic Energy Services, Inc. (NYSE: BAS) reported selected operating data for the month of June 2012. Basic's well servicing rig count remained unchanged at 431. Well servicing rig hours for the month were 76,100 producing a rig utilization rate of 76%, compared to 72% and 74% in May 2012 and June 2011, respectively.

During the month, Basic's fluid service truck count increased by six trucks to 926. Fluid service truck hours for the month were 178,400, compared to 189,100 and 178,300 in May 2012 and June 2011, respectively.

Drilling rig days for the month were 329 producing a rig utilization of 91%, compared to 96% and 85% in May 2012 and June 2011, respectively.

Ken Huseman, Basic's President and Chief Executive Officer, stated, "We saw our Well Servicing rig utilization rate in June increase to 76% as activity rebounded from the extended Memorial Day holiday weekend in late May. Fluid Services hours on a calendar day basis were very similar to what we achieved in May and our drilling rig utilization rate continues to be higher than 90%. Our Completion and Remedial segment experienced some softening late in the month with several frac jobs postponed until after the Fourth of July holiday. In addition to a flattening of activity, we are still seeing more equipment being repositioned into the more active markets causing competitive pricing pressures. We now expect our second quarter revenue to be approximately 2.5% lower than the first quarter, rather than the one to two percent guidance that we gave in our May operating report.

"We expect the U.S. land drilling rig count to decline in the latter part of this year and accordingly, our services related to completion activity are expected to also decline. If commodity prices stay at current levels, we believe that the seasonal decline in the fourth quarter will be more severe than the fourth quarter of 2011. In response to anticipated lower levels of activity, the majority of our capital expenditures in the second half of 2012 will be directed to projects in process and to those expenditures that are required to maintain and sustain our existing fleets. Any expansion projects will require a higher degree of review before we make a commitment.

"At June 30, our cash balance was approximately $100 million and our revolver was undrawn. We have been repurchasing shares of our stock since the reinstatement of our stock repurchase plan on May 23. As of July 12, we have repurchased 791,862 shares at an average cost of $9.42 per share."

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