Basic Energy Services Inc. has a market cap of $459.2 million; its shares were traded at around $11.07 with and P/S ratio of 0.8. BAS is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:Revenue per fluid service truck increased by 8% to $80,000 in the third quarter of 2010 compared to $74,000 in the second quarter of 2010, primarily due to the increasing rates being charged to customers. Segment profit percentage decreased slightly to 25% in the third quarter of 2010 from 26% in the second quarter of 2010 due to increased workers compensation costs.
The increase in completion and remedial services revenue to $73.7 million in the third quarter of 2010 from $61.5 million in the second quarter of 2010 was caused by higher drilling and completion activity. There was also an increase in segment profit percentage to 41% in the third quarter of 2010 from 39% in the second quarter of 2010 due to the increased activity and improved pricing for our pressure pumping services.
The increase in revenue per day to $10,600 in the third quarter of 2010 from $10,000 in the second quarter of 2010 was due primarily to improved pricing for our services. The decrease in segment profit percentage to 26% in third quarter of 2010 from 29% in the second quarter of 2010 is due to increased operating costs associated with our derrick recertification program that was completed in the third quarter of 2010.
Self-Insured Risk Accruals. We are self-insured up to retention limits with regard to workers compensation, general liability claims, and medical and dental coverage of our employees. We generally maintain no physical property damage coverage on our workover rig fleet, with the exception of certain of our 24-hour workover rigs and newly manufactured rigs. We have deductibles per occurrence for workers compensation, general liability claims, and medical and dental coverage of $500,000, $500,000 and $250,000 respectively. We have lower deductibles per occurrence for automobile liability. We maintain accruals in our consolidated balance sheets related to self-insurance retentions by using third-party actuarial data and claims history.
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