We’ve been tracking the rig count from Baker Hughes Inc. (NYSE:BHI) for a long time, and the bad news on North American drilling has finally tapered off. Now, Basic Energy Services (NYSE:BAS) has issued an interim report on its operating data for March 2009, and this is what the company has to say: “Drilling rig days for the month of March 2009 were 70 producing a rig utilization of 25%, an increase from 22% in February 2009 and a decrease from 93% in March 2008.”
The bad news dribbles on, as the company’s president and CEO noted that Basic now expects “revenues for the first quarter to be approximately 37% lower than the revenue reported in the fourth quarter of 2008.” He also noted that low natural gas prices, unstable oil prices, and lack of access to capital markets for Basic’s customers are not likely to improve in the near term, keeping prospects for Basic low.
The company expects second quarter revenue to be “similar” to the first quarter. Analysts’ estimates for the first quarter are $168.38 million, and for the second quarter $155.29 million.
The prospect of stable revenue must have been a positive signal to traders. Basic’s shares are up more than 22% this morning, almost 50% higher than the 52-week low.
Paul Ausick
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