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Basic Energy's Well Servicing Rig Count Stable, Utilization Rate Still Declining

Basic Energy Services Inc., which provides well site services across the U.S. onshore, said its rig count remained unchanged month/month in July, but well servicing rig hours declined both sequentially and from a year ago.

Basic's well servicing rig count in July was 421, unchanged from June, the operator said Wednesday (see Shale DailyJune 12). Well servicing rig hours were 55,400, with a rig utilization rate of 52%, versus 55% in June and 69% in July 2014.

"Our well servicing utilization decreased by 300 basis points, primarily as a result of the Fourth of July holiday period," said CEO Roe Patterson. "In the latter part of the month, we achieved utilization rates that were at or slightly above the prior month's utilization rate of 55%."

The Fort Worth, TX-based oilfield services operator works more than 100-plus service points in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, the Rocky Mountains and in Appalachia.

During July, Basic's fluid service truck count decreased by five to 1,007. Fluid service truck hours for the month were 193,200, the same as in June, but down from 214,900 in July 2014.

Drilling rig days in July totaled 69, producing a rig utilization of 19%, compared with 17% in June, 26% in May and 34% in April. In July 2014, the drilling utilization rate was 89%.

"Our truck hours remained flat, despite our truck count dropping during the month and the impact of the Fourth of July holiday period," Patterson said. "Completion and contract drilling activity continues to be challenged by the significant amount of excess equipment in the market and the recent volatility in oil prices. Pricing appears to have stabilized despite declines in expected activity by our customers."

Because of the current environment, Basic now expects third quarter revenue to be flat or slightly higher sequentially because of better weather and longer daylight hours, he said. Record rainfall cut into second quarter revenue.

"We continue to take defensive measures to maximize utilization and control costs under the current environment focusing on generating positive cash flow throughout all lines of business," said the CEO.

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