Market Commentary and Intraday News
Basic Energy: Softer demand will affect 2Q results
314 days ago
(AP:MIDLAND, Texas) Basic Energy Services Inc. said Friday that it expects second-quarter revenue to fall slightly more than previously forecast because of softer demand for well site services.
The Midland, Texas, company forecast a 2.5 percent decline in revenue from the first quarter's total of $370.9 million. Last month, it had predicted a 1 percent to 2 percent decline in revenue.
Ken Huseman, president and CEO, said in a statement that demand weakened late in June because several jobs were postponed until after the July Fourth holiday.
"In addition to a flattening of activity, we are still seeing more equipment being repositioned into the more active markets, causing competitive pricing pressures," he said in a statement.
Huseman expects U.S. land drilling rig counts to decline in the latter part of the year, which means the company's services related to well completion will decline.
Basic Energy provides well site services for oil and gas wells across major producing regions. In June, the company's well-servicing rig utilization rate was 76 percent. That compared with 72 percent in May and 74 percent in June 2011.
Shares of Basic Energy rose 30 cents, or 3.3 percent, to end at $9.35 Friday.
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