Basic Energy Services (BAS) Says Rig Count Dropped to 425 in December

January 14, 2013 4:21 PM EST
Basic Energy Services, Inc. (NYSE: BAS) today reported selected operating data for the month of December 2012. Basic's well servicing rig count decreased by six to 425 mainly due to rig retirements in December. Well servicing rig hours for the month were 60,000 producing a rig utilization rate of 61% (60% including retired rigs), compared to 62% and 69% in November 2012 and December 2011, respectively.

During the month, Basic's fluid service truck count decreased by two trucks to 955. Fluid service truck hours for the month were 178,100 compared to 182,400 and 189,100 in November 2012 and December 2011, respectively.

Drilling rig days for the month were 305 producing a rig utilization of 82%, compared to 76% and 89% in November 2012 and December 2011, respectively.

Ken Huseman, Basic's President and Chief Executive Officer, stated, "December activity for each of our business segments developed as anticipated with the seasonal impact of the holidays, less daylight hours and our customers winding down their 2012 spending. Pricing remains competitive as excess capacity continues to plague each segment although it appears that discounting leveled off during the fourth quarter.

"We retired nine of our stacked well servicing rigs in the month as they were deemed not to be candidates for refurbishment. Those rigs were carried at or close to salvage value so there will be minimal financial impact from their retirement. We have 29 rigs remaining in our stacked fleet that can be refurbished and re-activated as market conditions improve. As shown with the three new rigs added in December, we have the capability to continually upgrade and expand our well servicing fleet through newbuilds from our Taylor Manufacturing facility in Tulsa, Oklahoma.

"Capital spending surveys for this year indicate industry spending levels similar to 2012 with real growth in most oil-oriented markets. Many of our customers have yet to announce field level budgets and plans for 2013, leading us to expect a slow ramp of activity into the second quarter. As we await those announced plans to materialize, we will continue to focus on maximizing utilization of our services to retain market share in each our operating areas.

"Although not yet approved by our board of directors, we anticipate a capital budget for 2013 of approximately $185 million, with roughly two-thirds directed to maintaining our existing equipment and capability. The majority of the growth capital will be used for the expansion of our salt water disposal facility network. We can increase or decrease those spending plans as our operating results and view of market demand develops.

"The preliminary 2013 capital budget does not include acquisitions that we expect to complete over the course of the year. Current deal flow offers attractive opportunities in each of our segments and geographic regions. We expect to complete several acquisitions during the first half of this year.

"The relocation of our corporate headquarters to Fort Worth was completed in December with the final staffing and personnel moves. This process was successfully completed with minimal disruption to our operations, and we are now in a better position to provide support to our operations and facilitate future growth of the Company."

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