How Did Basic Energy Services’ Segments Perform in 2Q17?
Basic Energy Services’ revenue by segment
We’ll now look into Basic Energy Services’ (BAS) segment performance in 2Q17. The Completion and Remedial Services segment accounted for 50% of BAS’s 2Q17 revenues. Revenues in this segment rose the most in 2Q17 over a quarter ago. This segment’s profit as a percentage of revenues also improved to 24% in 2Q17 compared to 16% in 1Q17.
Basic Energy Services makes up 0.04% of the Vanguard Energy ETF (VDE). VDE fell 6% compared to a 35% decline in BAS’s stock price from March 31, 2017, to August 1, 2017. Baker Hughes, a GE company (BHGE), saw its 2Q17 revenues rise ~6% versus a quarter earlier.
Interested in BAS? Don't miss the next report.
Receive e-mail alerts for new research on BAS
The Well Servicing segment was also a positive surprise for BAS in 2Q17. It witnessed 9% revenue growth in 2Q17 over 1Q17. Its segment profit margin also improved to 21% in 2Q17 from 16% a quarter ago. Schlumberger (SLB), the largest oilfield equipment and services (or OFS) company, registered an $81 million net loss in 2Q17 compared to $284 million net income in 1Q17.
Factors affecting 2Q17 results
- improved pricing in the Completion and Remedial Services segment, which reduced the inventory of drilled but uncompleted wells outstanding
- higher rig utilization rate in the Well Servicing segment
- 5% higher revenue per rig hour in the Well Servicing segment
- 14% higher revenue per day in the Contract Drilling segment
Assessing BAS’s growth quality
Thomas Monroe Patterson, BAS’s CEO, commented in the 2Q17 earnings press release, “This increased level of activity that started in the Permian Basin and the SCOOP/STACK plays in Oklahoma, is now spreading into the Niobrara, California, and Eagle Ford markets. Additionally, improvements in other non-conventional basins are strengthening our base of business as well.”
Next, we’ll discuss Wall Street’s forecasts for Baker Hughes.