Dawson Geophysical (NASDAQ: DWSN) reported Q3 EPS of ($0.23), $0.02 better than the analyst estimate of ($0.25). Revenue for the quarter came in at $40.45 million versus the consensus estimate of $32.13 million.

Stephen C. Jumper, President and Chief Executive Officer, said, "Despite recent challenges in market conditions, we are pleased to report that for the nine month period ending September 30, 2018, Dawson Geophysical delivered a six percent improvement in revenues, a significant reduction in net loss and an increase of over $12 million in EBITDA compared to the nine month period ended September 30, 2017. Our continued focus on improved efficiencies and cost cutting initiatives fueled much of our success, particularly early in the year. Despite the improved nine month results, market conditions remain challenging in both the U.S. and Canada. As noted above, we operated a peak of five crews in the U.S. and one crew in Canada for approximately half of the third quarter and anticipate operating three to five crews in the U.S. and one to two crews in Canada in the fourth quarter. The increase in demand we had anticipated for the back half of 2018 has not materialized to the degree that we originally expected. Our optimism for opportunities in the Canadian market has lessened somewhat with the recent large differential between Canadian oil prices and WTI prices. In the Permian and Delaware Basins, capacity constraint issues continue to weigh on oil prices as a large pricing differential remains in place. Many industry professionals believe the Permian and Delaware pricing differential is temporary and will ease as additional takeaway capacity is added in 2019 and 2020. In addition, as we enter the second month of the fourth quarter, we are beginning to experience a slight improvement in bid activity and have secured additional work in various basins including the Permian and Delaware."

Jumper continued, "Although oil prices have risen in recent quarters, project visibility remains constrained. Part of this constraint revolves around our project driven multi-client data library customer base, a model that we do not actively participate in but do work as a contractor for several of the largest providers. The multiple participants and long lead times associated with these projects make seismic planning decisions more difficult and are often beyond our control. We believe part of the late 2018 slowdown in demand is related to 2018 capital budget exhaustion on behalf of our client base as they maintain overall spending levels within cash flows. It is our belief that sustainability of oil prices at current or improved levels will result in increased activity and exploration in multiple basins including the Permian and Delaware and lead to improved project visibility as exploration and production companies generate greater cash flows."

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