Basic Energy says November activity fell

Basic Energy Services, Inc., an oil and gas well site services provider, on Monday reported a reduced rig utilization rate in November and predicted further declines in business activity in 2009, due to the decline in commodity prices.

Basic Energy said November rig hours came it at 53,600, producing a rig utilization rate of 59 percent, a decrease from 72 percent and 71 percent in October 2008 and November 2007, respectively.

Rig count remained unchanged as the company added two new rigs and retired two rigs in the month. The company's truck fleet for fluid services rose by a net of 17 trucks, bringing it to a total of 811 trucks by the end of November.

The company said that while demand for well servicing and drilling has softened due to weakened commodity prices, the company's fluid services and completion and remedial segments remain strong as Basic completes previously drilled wells. Still, the company expects commodity price conditions and the reeling financial markets to limit demand as customers pull back spending.

Ken Huseman, Basic Energy's chief executive, said these factors along with reduced cash flow and restricted access to the capital markets, "lead us to expect activity levels well below prior year levels through at least the first half of 2009 as customers limit spending to essential maintenance and to only the most lucrative capital projects."

Shares of Basic Energy rose $1, or 9.2 percent, to close at $11.84.