MIDLAND, Texas, Sept. 9 /PRNewswire-FirstCall/ -- Basic Energy Services, Inc. ("Basic") today reported selected operating data for the month of August 2008. During the month, Basic added two newbuild rigs increasing its well servicing rig count to 413 as of August 31, 2008. Rig hours for the month of August 2008 were 77,900 producing a rig utilization rate of 82%, an increase from 77% last month and 79% in August 2007.
Drilling rig days for the month of August 2008 were 259 producing a rig utilization of 93%, an increase from 86% last month and 87% in August 2007.
As of August 31, 2008, Basic's fluid services truck fleet totaled 678 trucks, a decrease of one truck from the prior month and an increase of 22 trucks from August 31, 2007.
Ken Huseman, Basic's President and Chief Executive Officer, stated, "The significant year-over-year improvement in utilization in our well servicing and drilling segments reflects the generally strong market conditions we experienced throughout our footprint and range of services. Our operations group has done an excellent job of expanding our fleet and increasing utilization to take advantage of market conditions over the last year.
"We did incur disruption of our four-rig barge workover business by Hurricane Gustav as we moved the barges to protected water during the last week of the month and sent the crews home. The overall impact of the storm to third quarter results is expected to be insignificant as we incurred minimal disruption to utilization and minor damage to equipment.
"Oil and gas prices weakened during the month and more substantially after the passing of Hurricane Gustav and at this time we have not seen those reductions impact our customers' plans. Oil prices particularly remain well above the level required to support our customers' aggressive capital spending programs and continue to provide attractive operating margins to cover their routine maintenance expenditures, so we expect no reduction in oil related activity. Should gas prices remain at the current level, we will likely see some curtailment of new well drilling programs in the higher cost shale plays. Current gas prices however continue to produce field margins well above levels required to support active drilling and workover plans in the more established plays.
"Our continued confidence in the market and our ability to compete effectively is confirmed by our growth plans. In late August, we received preliminary approval from our board of directors to order 45 newbuild well servicing rigs and four newbuild 'Super-single' drilling rigs for delivery in 2009. The approximate cost of the 45 well servicing rigs is $50 million and we expect that 12 of these will be expansion units and the remainder will be used as replacements of older, less efficient rigs in our well servicing fleet with delivery pro rata throughout 2009.
"The four newbuild drilling rigs will be medium-depth capability with 1,300 horsepower pump packages and are designed for use in the 'Wolfberry' play in the Permian Basin. The approximate cost of these four rigs is $48 million, including drill pipe, and we expect delivery of the first two in late first quarter 2009 and the other two in the second quarter of 2009."
OPERATING DATA Month ended August 31, July 31, 2008 2007 2008 Number of weekdays in period 21 23 23 Number of well servicing rigs: (1) Weighted average for period 412 383 410 End of period 413 385 411 Rig hours (000s) 77.9 76.9 80.2 Rig utilization rate (2) 82% 79% 77% Number of drilling rigs: (1) Weighted average for period 9 9 9 End of period 9 9 9 Drilling rig days 259 242 240 Drilling utilization 93% 87% 86% Number of fluid service trucks: Weighted average for period 679 652 679 End of period 678 656 679
(1) Includes all rigs owned during periods presented and excludes rigs held for sale.
(2) Rig utilization rate based on the weighted average number of rigs owned during the periods being reported, a 55-hour work week per rig and the number of weekdays in the periods being presented.
Basic Energy Services provides well site services essential to maintaining production from the oil and gas wells within its operating area. The company employs more than 4,900 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas and the Rocky Mountain States.
Additional information on Basic Energy Services is available on the Company's website at http://basicenergyservices.com/.
Contacts: Alan Krenek, Chief Financial Officer Basic Energy Services, Inc. 432-620-5510 Jack Lascar/Sheila Stuewe DRG&E / 713-529-6600
