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Pioneer Energy service revenue rises as demand recovers

Pioneer Energy

Pioneer Energy posted a bigger-than-expected Q4 loss due to the slump in oil prices. Company photo.

Pioneer Energy oil field services unit expects 30 per cent bump in Q1

 

Feb 17 (Reuters) – Pioneer Energy Services Corp said it expected revenue from its biggest unit, which provides oil field services, to rise by as much as 30 per cent in the first quarter, with more oil companies drilling and completing wells.

However, the company, which also leases out rigs to oil and gas producers, posted a bigger-than-expected quarterly loss as both rig rates and prices for related oilfield services have slumped since oil prices began to fall mid-2014.

With oil prices now recovering and bolstering demand for rigs and other oilfield services, Pioneer Energy said prices for oilfield services had modestly risen and were expected to continue to improve through the year.

“Our customers are announcing larger capital spending programs in 2017 and demand for all of our four core services is increasing,” Chief Executive Stacy Locke said in a statement on Friday.

Pioneer said it expected margins in its production services business to rise 17-20 per cent in the first quarter from 14 per cent in the fourth quarter.

Revenue at the unit is expected to rise by 25-30 per cent from the fourth quarter.

Rig utilization is also expected to increase and average 70 to 73 per cent in the first quarter, much higher than the 48 per cent the company reported in the fourth quarter.

The dramatic rise in utilization numbers is partly because the company is selling and retiring some rigs.

The San Antonio, Texas-based company’s net loss narrowed to $36.1 million, or 53 cents per share, in the quarter ended Dec. 31, from $48.3 million, or 75 cents per share, a year earlier.

Excluding items, Pioneer posted a loss of 34 cents per share, bigger than analysts’ average estimate of 31 cents, according to Thomson Reuters I/B/E/S.

Pioneer’s total revenue fell nearly 32 per cent to $71.5 million, but was slightly ahead of analysts’ expectation of $70.5 million.

(Reporting by Muvija M in Bengaluru; Editing by Savio D’Souza and Anil D’Silva)

Posted in: Energy Financial

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