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Basic Energy Well Services Decline Further, Impacted by Slow Holiday

Basic Energy Services Inc.'s well servicing rig hours and drilling rig days continued to slide in December and fall sharply from a year ago during an exceptionally slow holiday period, CEO Roe Patterson said Tuesday.

Drilling rig days for the month were 46, producing a rig utilization of 12%, versus 16% in November and 87% in December 2014.

"The December year-end holiday period was an exceptionally slow one," Patterson said. "Our customers dramatically slowed their activities as they preserved cash and deferred maintenance work in response to continually weak commodity prices. Operations were further impacted by extreme weather conditions in the last week of the month."

The Fort Worth, TX-based operator, which provides U.S. onshore well site services at more than 100 service points, said the well servicing rig count remained unchanged month/month at 421. However, rig hours for December fell to 37,900, producing a rig utilization rate of 36%, versus 39% in November and 60% in December 2014.

"Heavy snowfall in the Permian Basin and Oklahoma caused significant downtime in all lines of business as we experienced blizzard conditions in many markets," Patterson said. "Current activity levels in most markets have generally resumed their pre-storm pace."

During the month, Basic's fluid service truck count declined by 16 to 985. Fluid service truck hours for the month were 177,000, compared to 182,800 in November and 218,200 in the year-ago period.

"Due to the impact of difficult weather conditions in late December, we expect our fourth quarter revenues to be at the higher end of the range that we had previously announced of 13-15% lower sequentially," the CEO said. "It is still too early to get a view of activity for the first quarter as most of our customers are still evaluating their spending plans for 2016."

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