Basic Energy Services, Inc (NYSE:BAS): Hits 52-Week Low Despite Solid Performance


Dallas, Texas 12/09/2014 (FINANCIALSTRENDS) – Basic Energy Services, Inc (NYSE:BAS), an independent oil & gas equipment & services company, hits bottom on Monday. The stock now trades about 80% below its 52-week high and roughly 60% below its price a year ago.

The company is consistently experience pressure on its stock despite reasonable third quarter results and operational performance through October this year. The company also recently signed the Amended and Restated Credit Agreement with a syndicate of lenders and Bank of America Corp (NYSE:BAC), as administrative agent.

Increased Revolving Credit Facility

Basic Energy Services, Inc (NYSE:BAS) amended its revolving credit facility to $300 million with an accordion feature whereby the total credit facility could be increased by up to $150 million. Borrowings under this new agreement mature on November 26, 2019, subject to underlying conditions and options exercise. The company also enjoys the freedom to prepay the borrowings at any time without any penalty.

In case on default, lenders have a choice to terminate their commitments and declare any outstanding loans immediately payable. The agreement also prevents the company from investing such proceeds to fund any activities, which is the subject of governmental sanctions.

Operational Performance

Basic Energy Services, Inc (NYSE:BAS) reported strong operational performance in October across all business segments with significant increase in truck utilization. Fluid service truck hours were 233,300 compared to 201,900 in October 2013. Well servicing rig utilization rate also increased to 73% from 71% in October 2013.

The company reported net income of $9.9 million on revenue of $394 million during 3Q14. The company reported better than expected activity levels during the quarter led by its Completion and Remedial Services segment. The company expects its completion activity to increase further driven by demand for its pumping services and coil tubing service lines. The revenue for this segment increased 18% to $193.7 million during 3Q14.

Activity levels and pricing along Well Servicing, Fluid Services and Contract Drilling segment also remained in line with expectations.