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Basic Energy’s Rig Days Slump to 59 From 298 Year/Year

Basic Energy Services Inc. said its drilling rig days in November slumped to 59 from 298 in the year-ago period. The utilization rate was 16%, versus 83% a year ago and 13% in October.

The Houston operator, which employs more than 4,000 people in more than 100 service points across the U.S. onshore, has scaled back operations and capital expenditures "to fit cash flow and preserve our liquidity," CEO Roe Patterson said. "We continue to stack underutilized assets while simultaneously high-grading our current marketed fleet across our footprint and in all lines of business."

Basic also has exited some markets "where margins have fallen below levels that justify current sustaining capital expenditures."

The well servicing rig count last month remained unchanged at 421, but well servicing rig hours were 37,600, producing a rig utilization rate of 39%. In October the utilization rate was 44% and a year ago it was 67%.

During November Basic's fluid service truck count also declined by five to 1,001. Truck hours in November were 182,800, compared to 197,200 in October and 210,400 in November 2014.

November activity was "significantly impacted" by the Thanksgiving holiday, Patterson said. "In addition, wet weather in the last week of the month hindered operations in a large part of our geographic footprint. The performance of our fluid services operations was consistent with the last several months."

The well servicing operations lost about 500 basis points of utilization last month on seasonal factors.

"Well servicing and fluid services utilization post the Thanksgiving holiday period bounced back to levels equal to, or in some cases slightly higher, than prior to the holiday period. Stimulation services activity was impacted during the month by the typical seasonal factors, as well as lower levels of completion activity."

Basic expects to have a "slower than usual" holiday period through the end of the year. Revenue in 4Q2015 is expected to decline about 13-15% year/year.

Houston-based Patterson-UTI Energy Inc., one of the biggest onshore drilling rig providers in North America, said in November it averaged 89 U.S. drilling rigs with three in Canada. For October and November, the rig average was 91 U.S. rigs and four in Canada.

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