Dawson Geophysical (NASDAQ: DWSN) reported Q4 EPS of ($0.51), $0.31 worse than the analyst estimate of ($0.20). Revenue for the quarter came in at $27.6 million versus the consensus estimate of $44.2 million.

Stephen C. Jumper, President and Chief Executive Officer, said, "The fourth quarter of 2018 was a difficult quarter for Dawson Geophysical and the entire oil and gas services sector. Crude oil (WTI) began the fourth quarter at $74.68, only to close down approximately 39% to $45.72 on December 31, 2018. The PHLX Oil Service Index (OSX) experienced an even more challenging fourth quarter as it began trading October 1, 2018 at $151.40, only to drop approximately 47% to $80.60 on December 31, 2018 after reaching a yearly low of $75.70 on December 24, 2018. At February 27, 2019, the OSX continues to trade at reduced levels from the $150 range and closed at $94.84 and WTI crude oil closed at $56.98."

Jumper continued, "Despite the challenging fourth quarter market conditions, for the twelve month period ending December 31, 2018, while revenues remained consistent with 2017 levels, Dawson Geophysical delivered a 140% increase in EBITDA and a significant reduction in net loss compared to the twelve month period ended December 31, 2017. Our ongoing emphasis on cost reduction and enhanced efficiencies contributed to these improvements. While our twelve month results improved compared to the twelve month period ended December 31, 2017, market conditions continue to remain challenging in both the U.S. and Canada. The increase in demand we anticipated for the second half of 2018 did not materialize as oil prices softened, and the Canadian market was unfavorably impacted by the large differential between Canadian oil prices and WTI prices. In the Permian and Delaware Basins, takeaway capacity constraints resulted in a pricing differential to WTI throughout the year, further reducing effective oil prices. Many industry professionals believe the Permian and Delaware pricing differential will further ease as additional takeaway capacity is added in 2019 and 2020. That said, we are encouraged by an emerging trend related to areas of activity by exploration and production companies and multi-client data companies. For much of 2018, seismic projects in the U.S. have been concentrated in the Permian and Delaware basins with little activity occurring outside of those basins. In recent months, we have seen a slight increase in interest in projects located outside of the Permian and Delaware basins. We have recently bid projects in the Niobrara and Powder River, SCOOP/STACK, Eagle Ford, and Austin Chalk basins."

Jumper concluded, "While 2018 proved difficult for Dawson Geophysical as well as many companies in the oilfield services sector, we continue to believe that seismic remains a valuable technology for identification and development of both conventional and unconventional hydrocarbon reservoirs by our clients and the industry. Reduced finding and development costs and improved production economics are just some of the benefits that seismic data affords our clients. For the year so far, WTI is up 23%, and several analysts expect oil prices to rise in the first half of 2019. We anticipate reduced bid activity during the first quarter of 2019, but remain cautiously optimistic as our clients evaluate their 2019 capital budget expenditures and with the increasing interest in several key basins outside of the Permian and Delaware. We continue our commitment to maintaining our strong balance sheet, taking advantage of opportunistic equipment purchases, and positioning ourselves to meet the needs of our valued shareholders and clients as we deliver the best in class high resolution subsurface images."

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