Conference Call and Webcast Scheduled for Tomorrow at 4:15 PM ET
HOUSTON, Aug. 19 /PRNewswire-FirstCall/ -- Best Energy Services, Inc. (OTC
Bulletin Board: BEYS), a U.S. energy production equipment and services
provider, today announced its financial results for the three and six months
ended June 30, 2009.
Highlights for the Three Months Ended June 30, 2009 Compared to the Three Months Ended July 31, 2008:
- Total revenues were $1.60 million, declining 75% from $6.43 million.
- Well service revenues decreased 82% to $840,000 from $4.63 million, due primarily to a measurable drop in rig utilization caused by the general economic downturn in the oil and gas industry and further exasperated by unseasonably extreme weather conditions affecting the Company's key service region in April and May of this year.
- Drilling service revenues totaled $690,000, dropping 55% from $1.54 million.
- Geological service revenues, reflecting combined sales of mud logging services and housing accommodations, were $71,000, down 73% from $263,000.
- On a more positive note, total operating costs and expenses decreased 44% to $3.46 million from $6.20 million. The sizable decline is largely attributable to a specific company-wide cost-cutting program implemented by management, ongoing tight cost controls and lower direct cost of revenue booked during the current reporting period.
- General and administrative expenses declined 19% to $565,000 from $695,000. Included in the $565,000 was $110,000 of non-cash stock-based compensation.
- Business unit operating expenses were $1.32 million, down 29% from $1.86 million.
- After factoring a preferred stock dividend, net loss attributable to common shareholders totaled $2.34 million, or $0.11 loss per basic and diluted share, which compared to a net loss attributable to common shareholders of $595,000, or $0.03 loss per basic and diluted share.
Highlights for the Six Months Ended June 30, 2009 Compared to the Six Months Ended July 31, 2008:
- Total revenues decreased 59% to $4.43 million from $10.72 million.
- Due to the aforementioned reasons, well service revenues fell 68% to $2.72 million from $8.50 million.
- Drilling service revenues declined 18% to $1.52 million from $1.84 million.
- Geological service revenues totaled $191,000, decreasing 49% from $374,000.
- Total operating costs and expenses dropped 39% to $7.35 million from $12.05 million. Non-cash stock-based compensation totaled $463,000 for the first six months of this year.
- Net loss attributable to common shareholders, after factoring the preferred stock dividend, was $3.74 million, or $0.18 loss per basic and diluted share, down 25% from $5.0 million, or $0.27 loss per basic and diluted share.
As of June 30, 2009, cash totaled $108,000, accounts receivables were
$1.46 million and total stockholders' equity was $6.91 million. Earlier this
month, Best Energy completed a private placement, yielding approximately $1.1
million in gross proceeds to the Company. Terms and conditions of the equity
transaction have been detailed in the Company's Form 10Q for the period ended
June 30, 2009.
Mark Harrington, Chairman and CEO of Best Energy Services, stated, "As
noted on our last quarter conference call, we have encountered a series of
difficult challenges this year - not the least of which has been the ferocious
decline in industry-wide activity levels. Compounding this problem was severe
weather-related disruptions in our Hugoton workover business activities during
April and May. However, activity increased in both June and July; and for the
first few weeks of August, our rig count has hovered around nine. We believe
that count may continue to at least modestly improve over the balance of the
year. In brief, Best Energy maintains dominant market share of workover
business in the Hugoton; we continue to be successful in our water well
activities in Utah; we now have our expenses at housing back in line; and we
appear to have a promising outlook for mud-logging through the end of this
year and into 2010. Moreover, we continue to exercise tight cost control in
all our business units, and now see our cash G&A coming in below our current
budget of $1.4 million for 2009."
Best Energy also reported that it has entered into a second amendment and
waiver of its credit agreement with PNC Bank. Under the second amendment,
covenant terms on minimum EBITDA and rig utilization have been adjusted
significantly downward. Interest rate on the term loan has been increased by
0.25%. Under the new covenant tests, Fixed Charge Coverage, EBITDA and rig
utilization rates are as noted below:
Minimum Fixed Charge Coverage Requirements:
Twelve Month Period Ending: Minimum Fixed Charge Coverage Ratio:
--------------------------- ------------------------------------
September 30, 2009 No Test
December 31, 2009 No Test
March 31, 2010 No Test
June 30, 2010 No Test
September 30, 2010 1.10 to 1.0
December 31, 2010 1.10 to 1.0
March 31, 2011 1.10 to 1.0
Minimum Quarterly EBITDA Requirements:
Fiscal Quarter Ending: Minimum EBITDA
---------------------- --------------
Three month period ending September 30, 2009 $(30,000)
Six month period ending December 31, 2009 $880,000
Nine month period ending March 31, 2010 $1,640,000
Twelve month period ending June 30, 2010 $2,685,000
Twelve month period ending September 30, 2010 $3,795,000
Twelve month period ending December 31, 2010 $3,990,000
Twelve month period ending March 31, 2011
and each fiscal quarter ending thereafter $4,000,000
Minimum Quarterly Rig Utilization Requirements:
Fiscal Quarter Ending: Minimum Rig Utilization:
---------------------- ------------------------
September 30, 2009 34%
December 31, 2009 39%
March 31, 2010 40%
June 30, 2010 41%
September 30, 2010 43%
December 31, 2010 43%
March 31, 2011 and each fiscal
quarter ending thereafter 43%
Commenting on the amended agreement with PNC, Harrington added, "It is
rewarding to all of us that in these very challenging times, PNC continues to
work side-by-side with us to meet and address our challenges. We thank them
for once again demonstrating their continued support of our business model."
Best Energy's management team will host a teleconference tomorrow
afternoon, Thursday, August 20, 2009, beginning at 4:15 PM Eastern Time, and
invites all interested parties to join a discussion regarding the Company's
financial performance, ongoing operational initiatives and other matters of
shareholder interest. The conference call can be accessed via telephone by
dialing toll free 1-877-941-1427 or via the web at www.BEYSinc.com. For those
unable to participate at that time, a replay of the webcast will be available
for 90 days on www.BEYSinc.com.
About Best Energy Services, Inc.
Based in Houston, Texas, Best Energy Services, Inc. is a leading well
service, drilling and ancillary services provider to the domestic oil, gas,
water and mining industries. Through its subsidiaries, Best Well Service,
Inc. and Bob Beeman Drilling Co., and its Housing Accommodations and
Geological Services operations, the Company is actively engaged in supporting
the exploration, production and recovery of oil, gas, water and mineral
resources in Arizona, Colorado, Kansas, New Mexico, Nevada, Oklahoma, Texas,
Utah and Wyoming. For more information, please visit www.BEYSinc.com.
Best Energy Services, Inc. Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
ASSETS 2009 2008
-------- ------------
Current assets
Cash $107,600 $249,330
Accounts receivable, net of allowance
for doubtful accounts of $120,518 and
$106,237, respectively 1,461,806 3,602,118
Prepaid and other current assets 71,434 123,053
------ -------
Total current assets 1,640,840 3,974,501
Property and equipment, net 29,173,537 30,877,472
Deferred financing costs, net 556,500 -
Goodwill and other intangible assets 7,616,254 7,557,309
--------- ---------
TOTAL ASSETS $38,987,131 $42,409,282
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable and accrued liabilities $488,631 $678,834
Bank overdraft 219,172 -
Current portion of accrued officer
compensation 185,000 140,000
Preferred stock dividends payable 1,276,268 765,761
Current portion of loans payable 1,395,778 21,802,193
--------- ----------
Total current liabilities 3,564,849 23,386,788
Accrued officer compensation, net of
current portion 350,000 410,000
Loans payable, net of current portion 19,315,525 134,836
Convertible notes payable, net of
discount of $405,492 and $-,
respectively 412,508 -
Deferred income taxes 8,431,507 8,708,454
--------- ---------
TOTAL LIABILITIES 32,074,389 32,640,078
---------- ----------
STOCKHOLDERS' EQUITY
Series A Preferred Stock, 2,250,000
shares authorized, 1,458,592 shares
issued and outstanding, at redemption
value of $10 per share 14,585,920 14,585,920
Common stock, $0.001 par value per
share; 90,000,000 shares authorized;
21,010,109 and 20,891,366 shares
issued and outstanding, respectively 21,010 20,891
Additional paid-in capital 2,823,655 2,452,350
Retained deficit (10,517,843) (7,289,957)
----------- ----------
Total stockholders' equity 6,912,742 9,769,204
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $38,987,131 $42,409,282
=========== ===========
Best Energy Services, Inc. Consolidated Statements of Operations
For the three and six months ended June 30, 2009 and July 31, 2008
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, July 31, June 30, July 31,
2009 2008 2009 2008
-------- -------- -------- --------
Revenues
Well service revenue $839,913 $4,628,882 $2,717,302 $8,502,681
Drilling service revenue 690,235 1,542,413 1,518,794 1,843,500
Geological services
revenue 70,614 263,035 191,025 373,877
--------- --------- --------- ----------
Total revenue 1,600,762 6,434,330 4,427,121 10,720,058
--------- --------- --------- ----------
Costs and expenses:
Direct cost of revenue 612,197 2,746,647 2,348,137 4,690,805
Business unit operating
expenses 1,321,915 1,859,108 1,862,115 4,556,233
Depreciation and
amortization 965,210 891,649 1,899,227 1,611,170
Loss on sale on property
and equipment - 6,793 - 6,793
General and administrative
expense 564,751 694,479 1,244,057 1,187,188
--------- --------- --------- ----------
Total operating costs and
expenses 3,464,073 6,198,676 7,353,536 12,052,189
--------- --------- --------- ----------
Income (Loss) from
operations (1,863,311) 235,654 (2,926,415) (1,332,131)
--------- --------- --------- ----------
Other income (expense):
Interest income 122 586 874 19,697
Interest expense (355,519) (364,347) (579,292) (3,221,834)
--------- --------- --------- ----------
Loss before provision
for income taxes $(2,218,708) $(128,107) $(3,504,833) $(4,534,268)
Income tax - - - -
Deferred income tax
benefit 138,000 - 276,947 -
--------- --------- --------- ----------
Net loss $(2,080,708) $(128,107) $(3,227,886) $(4,534,268)
Preferred stock dividend (255,253) (466,858) (510,507) (466,858)
--------- --------- --------- ----------
Net loss attributable
to common shareholders (2,335,961) (594,965) (3,738,393) (5,001,126)
========= ========= ========= ==========
Net loss per share -
basic and diluted (0.11) (0.03) (0.18) (0.27)
========= ========= ========= ==========
Weighted average common
shares outstanding -
basic and diluted 20,999,713 20,216,306 20,952,535 18,604,444
========== ========== ========== ===========
Certain statements contained in this press release, which are not based on
historical facts, are forward-looking statements as the term is defined in the
Private Securities Litigation Reform Act of 1995, and are subject to
substantial uncertainties and risks in part detailed in the respective
Company's Securities and Exchange Commission filings, that may cause actual
results to materially differ from projections. Although the Company believes
that its expectations are reasonable assumptions within the bounds of its
knowledge of its businesses, expectations, representations and operations,
there can be no assurance that actual results will not differ materially from
their expectations. Important factors currently known to management that could
cause actual results to differ materially from those in forward-looking
statements include the Company's ability to execute properly its business
model, to raise additional capital to implement its continuing business model,
the ability to attract and retain personnel - including highly qualified
executives, management and operational personnel, ability to negotiate
favorable current debt and future capital raises, and the inherent risk
associated with a diversified business to achieve and maintain positive cash
flow and net profitability. In light of these risks and uncertainties, there
can be no assurance that the forward-looking information contained in this
press release will, in fact, occur.
FOR MORE INFORMATION, PLEASE CONTACT
Elite Financial Communications Group/Elite Media Group
Dodi B. Handy, President and CEO (Twitter: dodihandy)
407-585-1080 or via email at BEYS@efcg.net
SOURCE: Best Energy Services, Inc.
CONTACT:
Dodi B. Handy, President and CEO of Elite Financial
Communications Group/Elite Media Group
+1-407-585-1080
BEYS@efcg.net
for
Best Energy Services, Inc.
Web Site:
http://www.BEYSinc.com
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