Basic Energy Services, Inc. (NYSE:BAS) Q1 2019 Earnings Conference Call Transcript

May 10, 2019 • 09:00 am ET


Basic Energy Services, Inc. (NYSE:BAS) Q1 2019 Earnings Conference Call Transcript


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Greetings and welcome to the Basic Energy Services First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

(Operator Instructions)

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Trey Stoltz, Vice President of Investor Relations. Thank you, sir. You may begin.

Trey Stoltz

Thank you operator and good morning everyone. Welcome to the Basic Energy Services first quarter 2019 earnings conference call. We appreciate you joining us today. Before we begin, I'd like to remind everyone that today's comments include forward-looking statements reflecting Basic Energy Services' view of future events. And therefore, potential impact on performance. These views include the risk factors disclosed by the Company in its Form 10-Qs and 10-Ks for the year ended, December 31, 2018. Further, we'll refer to these statements regarding forward-looking statements incorporated in our press release from yesterday. Please also note that the contents of this conference call are covered by these statements.

In addition, the information reported on this call speaks only as of today, May 10, 2019, and therefore, you're advised that time-sensitive information may no longer be accurate at the time of any replay.

With that, I'll turn the call over to Roe Patterson, President and CEO.

T.M. Pattersonn

Thank you, Trey, and welcome to our 2019 first quarter earnings conference call. We appreciate your interest in our Company. Joining me on the call is David Schorlemer, our Senior Vice President and CFO. Today, I plan to discuss our 2019 first quarter results and operational focus and strategies for the remainder of the year. And David will walk through some more detailed financial metrics for our recent quarter's performance and outlook.

Late 2018 provided the industry with a perfect storm, including holiday disruptions, record rainfall in key areas and falling crude prices. All during the critical budget season. Simultaneously, the overall investment climate shifted forcing our entire industry to focus not only on growth, but disciplined cash deployment and management. Accordingly, we signaled a slow start to 2019 progress, while our customers digested this changing environment and tried to match their own CapEx budgets to their cash flow outlook.

Swinging crude prices only confused the exercise. Consequently, when we accurately guided the revenues to mid-teen declines sequentially for the first quarter, we already knew that our work in 2018 to realign and streamline the Company was about to payoff with respect to our margins. These improving margins in the production business segments helped offset the declines in completion activities. As we anticipated for Q1, this slowing completion activity contributed to the buildup of drilled, but uncompleted wells.

Customers generally fulfilled their drilling commitments, but some held off on completing wells, so that they could curb their overall cash spend. In the meantime, customers sought out cheaper maintenance projects to grow their revenue. So, all those segment revenues in Completion & Remedial Services were hit hardest in the first quarter, growth in