Onshore rig-based well servicing contractor Key Energy Services, Inc. (KEG) on Wednesday reported a loss for the second quarter compared to a profit last year, hurt by a 52% drop in quarterly revenues as the fundamental environment for its U.S. land-based oil service offerings continued to erode. Loss per share for the quarter came in wider than analysts' expectations by four cents.
Key Energy is an onshore, rig-based well servicing contractor, providing a range of oil-well services to major oil companies and independent oil and natural gas production companies, including rig-based well maintenance, oilfield trucking services, among others. The company has operations in all major onshore oil and gas producing regions of the continental U.S., Argentina, and Mexico.
The company noted that the oil producing regions of the U.S. have recently witnessed an activity response to an increase in the per barrel price of oil, which has averaged more than $60 for the last two months. Activity has also increased in the company's well service rig based market, particularly with regard to repair and maintenance activity. The company added that until there is a more meaningful increase in U.S. based activity, it would continue its cost reduction efforts.
Houston, Texas-based Key energy reported a net loss of $18.47 million or $0.15 per share for the second quarter, compared to net income of $44.01 million or $0.35 per share in the prior-year quarter.
On average, 13 analysts surveyed by Thomson Reuters expected the company to report a loss of $0.11 per share for the second quarter. Analysts' estimate typically excludes special items.
Total revenues for the quarter dropped 52% to $241.46 million from $502.0 million in the same quarter last year, and missed eight Wall Street analysts' consensus estimate of $280.25 million.
Segment-wise, well servicing revenues for the second quarter dropped to $197.95 million from the year-ago quarter's $370.86 million. Production services revenues were $43.51 million, sharply down from $131.14 million in the prior-year quarter.
Total costs and operating expenses for the quarter dropped to $270.59 million from the year-ago quarter's $430.76 million. Expenses include direct operating expenses of $173.85 million, sharply lower than $322.49 million in the prior-year quarter.
Total capital expenditures for the quarter were about $22.6 million. The company ended the second quarter with cash and cash equivalents of $79.64 million, compared to $45.46 million at end of the prior-year quarter.
Looking ahead, the company now expects capital expenditures to about $125 million for the full year 2009, up from the prior estimate of $100 million.
KEG closed Wednesday's regular trading session at $7.15, down $0.34 or 4.54% on a volume of 0.87 million shares, lower than the three-month average volume of 1.77 million shares.
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