Forbes Energy Services Reports Second Quarter Financial Results



    



    
    ALICE, Texas, Aug. 14, /CNW/ -- Forbes Energy Services Ltd. (TSX: FRB)
today announced financial and operating results for the second quarter ended
June 30, 2009.

    Revenues for the second quarter declined to $49.8 million compared to
$63.4 million in the first quarter of 2009 as a result of lower pricing and
utilization in both operating segments.  Net loss for the three months ended
June 30, 2009 was $9.0 million, or a loss of $0.15 per share, compared to a
net loss of $4.5 million, or $0.07 per share, in the quarter ended March 31,
2009.  Adjusted EBITDA for the second quarter of 2009 totaled $3.3 million
versus $9.7 million in the 2009 first quarter.  Adjusted EBITDA is a non-GAAP
financial measure, defined by the Company as net income before interest,
taxes, depreciation, amortization and non-cash stock based compensation.  For
a reconciliation of Adjusted EBITDA to net income, please see the disclosures
at the end of this release and on the Company's website.

    John Crisp, Forbes Energy's President and Chief Executive Officer,
stated, "Activity in the second quarter was largely consistent with what we
experienced at the end of the first quarter.  In the well servicing segment,
utilization appears to have bottomed in April, and pricing has also
leveled-out.  Pricing and utilization have continued to trend downward in the
fluid logistics segment, although that business now appears to be in the
process of leveling out.

    "Mexico continues to be a positive for the Company as we now have nine
rigs working or en route.  Additionally, we're in the process of setting up
shop in the Marcellus Shale which has the potential to be a key driver of our
long-term growth.  The Marcellus is one of the few plays in the United States
where activity continues to accelerate in spite of the depressed natural gas
environment."
    

    Business Segment Results

    Well Servicing
    
    Well servicing revenues decreased to $25.5 million during the second
quarter of 2009 compared to $31.5 million in the first quarter.  Well
servicing segment gross margins in the second quarter of 2009 were $1.8
million, compared to $5.1 million in the first quarter of 2009.

    Forbes recorded approximately 65,453 rig hours for the second quarter of
2009, including 10,440 hours in Mexico, compared to 73,522 total hours in the
first quarter of 2009 (4,748 in Mexico).  The Company had 170 rigs in its well
service fleet at June 30, 2009, unchanged from March 31, 2009.  Capital
expenditures for the well servicing segment totaled $3.4 million during the
three months ended June 30, 2009, primarily related to Mexico.
    

    Fluid Logistics
    
    Fluid logistics revenues in the second quarter of 2009 decreased to $24.2
million compared to $31.9 million in the first quarter of 2009.  Gross margins
for the fluid logistics segment totaled $4.3 million compared to $8.7 million
in the previous quarter.

    Forbes recorded 199,662 truck hours during the second quarter of 2009
compared to 229,219 for the first quarter.  The Company's fluid transport
segment heavy truck fleet totaled 370 as of June 30, 2009, unchanged from
March 31, 2009.  Total capital expenditures for the fluid logistics segment
were $0.3 million for the three months ended June 30, 2009.
    

    Conference Call

    
    Forbes Energy will host a conference call to discuss its second quarter
2009 results on Monday, August 17, 2009, at 10:00 a.m. Eastern Time (9:00 a.m.
Central). To access the call, please dial (480) 629-9773 and ask for the
"Forbes Energy Services" call at least 10 minutes prior to the start time. The
conference call will also be broadcast live via the Internet and can be
accessed through the "Investor Relations" page of Forbes Energy's website,
www.forbesenergyservices.com.

    A telephonic replay of the conference call will be available until August
24, 2009, and may be accessed by calling (303) 590-3030 and using the pass
code 4139793.  A webcast archive will be available at
www.forbesenergyservices.com shortly after the call and will be accessible for
approximately 30 days. For more information, please contact Donna Washburn at
DRG&E at (713) 529-6600 or email at dmw@drg-e.com.
    

    About Forbes Energy

    
    Forbes Energy Services Ltd. is an independent oilfield services
contractor that provides a broad range of drilling-related and
production-related services to oil and natural gas companies, primarily
onshore in Texas, Mississippi, and Mexico.
    


    Forward-Looking Statements and Regulation G Reconciliation

    
    This press release contains "forward-looking statements," as contemplated
by the Private Securities Litigation Reform Act of 1995, in which the Company
discusses factors it believes may affect its performance in the future. The
accuracy of the Company's assumptions, expectations, beliefs and projections
depend on events or conditions that change over time and are thus susceptible
to change based on actual experience, new developments and known and unknown
risks. The Company gives no assurance that the forward-looking statements will
prove to be correct and does not undertake any duty to update them. The
Company's actual future results might differ from the forward-looking
statements made in this press release for a variety of reasons, which include:
supply and demand for oilfield services and the level of oil and natural gas
prices; the continued uncertainty in the global financial markets and its
effect on domestic spending in the oil and natural gas industry; the Company's
ability to maintain pricing on its core services; the potential for excess
capacity in the industry; and competition. Should one or more of the foregoing
risks or uncertainties materialize, or should the Company's underlying
assumptions prove incorrect, the Company's actual results may vary materially
from those anticipated in its forward-looking statements, and the Company's
business, financial condition and results of operations could be materially
and adversely affected.   Additional factors that you should consider are set
forth in detail in the Risk Factors section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2008 (the "Form 10-K") as well as
other filings the Company has made with the Securities and Exchange
Commission.

    Forbes Energy's financial statements and management's discussion and
analysis of financial condition and results of operations can be found in the
Form 10-Q, which is being filed with the Securities and Exchange Commission
and posted on the Company's website.

    This press release also contains references to the non-GAAP financial
measure of earnings, or net income, before interest, income taxes,
depreciation and amortization, or EBITDA.  For a reconciliation of EBITDA to
net income, please see the table at the end of this release. Management's
opinion regarding the usefulness of  EBITDA to investors and a description of
the ways in which management uses such measures can be found on the "Investor
Relations" page of Forbes Energy's website, www.forbesenergyservices.com.


    
    Contacts:  Forbes Energy Services Ltd.
               L. Melvin Cooper, SVP & CFO
               361-664-0549
    

    
               DRG&E
               Ken Dennard, Managing Partner
               Ben Burnham, AVP
               713-529-6600

    


    -Tables to Follow-

    
                      Selected Statement of Operations Data
                                   (Unaudited)
    

    
                          Three Months Ended           Six Months Ended
                               June 30,                   June 30,
                          ------------------          ------------------
                          2009          2008          2009          2008
                          ----          ----          ----          ----
                                        (As                         (As
                                      Restated)                   Restated)
    Revenues
    Well servicing    $25,515,071   $47,376,065   $57,054,079   $86,660,403
    Fluid logistics    24,237,506    41,225,126    56,129,880    72,463,647
                       ----------    ----------    ----------    ----------
      Total
       revenues        49,752,577    88,601,191   113,183,959   159,124,050
                       ----------    ----------   -----------   -----------
    

    
    Expenses
    Well servicing     23,720,892    30,008,033    50,116,601    54,412,815
    Fluid logistics    19,928,066    28,164,067    43,159,687    50,458,950
    General and
     administrative     3,896,576     4,717,627     9,670,455     7,860,308
    Depreciation and
     amortization       9,774,963     7,431,081    19,466,335    14,471,104
                        ---------     ---------    ----------    ----------
      Total
       expenses        57,320,497    70,320,808   122,413,078   127,203,177
                       ----------    ----------   -----------   -----------
      Operating
       income (loss)   (7,567,920)   18,280,383    (9,229,119)   31,920,873
    

    
    Other income
     (expense)
    Interest expense   (6,406,311)   (6,584,009)  (13,059,988)  (12,559,135)
    Gain on
     extinguishment
     of debt              447,842             -     1,421,750             -
    Other income
     (expense)              8,084        77,034        34,617       106,568
                            -----        ------        ------       -------
      Income
       (loss)
       before
       taxes          (13,518,305)   11,773,408   (20,832,740)   19,468,306
    

    
    Income tax
     expense
     (benefit)         (4,480,569)   54,985,420    (7,259,514)   55,157,420
                       ----------    ----------    ----------    ----------
      Net
       income
       (loss)         $(9,037,736) $(43,212,012) $(13,573,226) $(35,689,114)
                      ===========  ============  ============  ============
    

    
    Earnings (loss)
     per share of
     common stock
      Basic                $(0.15)       $(1.13)       $(0.22)       $(1.05)
      Diluted              $(0.15)       $(1.13)       $(0.22)       $(1.05)
    

    
    Weighted average
     number of
     shares
     outstanding
      Basic            62,111,200    38,166,398    62,111,200    33,833,299
      Diluted          62,111,200    38,166,398    62,111,200    33,833,299
    

    
    Pro forma
     earnings per
     share(1)
      Basic                               $0.14                       $0.23
      Diluted                             $0.13                        0.22
    

    
    Weighted average
     number of
     shares
     outstanding
      Basic                          54,144,700                  54,144,700
      Diluted                        56,914,700                  56,914,700
    

    
    (1) The pro forma earnings per share reflects the effects related to the
        Company's Bermuda reorganization from a limited liability company to
        a "C" corporation, this issuance of common stock in connection with
        Forbes' initial equity offering and an assumed effective tax rate
        of 37%.  See disclosures in the Company's 10-Q filing for additional
        information.
    



    
       Selected Balance Sheet Data
       (Unaudited)
                                       June 30,          December 31,
                                         2009               2008
                                         ----               ----
       Cash                           $38,563,078       $23,469,067
       Accounts receivable             41,672,837        69,095,522
       Working Capital                 36,517,871        42,707,044
       Intangible assets (net)         38,029,379        39,459,977
       Total assets                   457,172,423       482,801,391
       Total debt                     216,596,051       212,189,842
       Deferred tax liability          54,676,072        62,068,620
       Shareholders'/members' equity  146,088,122       158,418,487
    



    Selected Operating Data

    
                           Three Months Ended           Six Months Ended
                                June 30,                   June 30,
                           ------------------          ------------------
                           2009          2008          2009          2008
                           ----          ----          ----          ----
       Working days          64            64            127          128
       Rig Hours
        U.S.              55,013       97,860        123,787      173,549
        Mexico            10,440            -         15,188            -
                          ------          ---         ------          ---
        Total rig hours   65,453       97,860        138,975      173,549
    

    Truck hours       199,662      271,968        428,881      492,823



    
    Reconciliation of Adjusted EBITDA to Net Income
     (Unaudited)
    

    
                                     Three Months Ended
                                     ------------------
                         June 30, 2009  June 30, 2008  March 31, 2009
                         -------------  -------------  --------------
                                        (As Restated)
    Net Income (loss)     $(9,037,736)  $(43,212,012)    $(4,535,490)
    Depreciation and
     amortization           9,774,963     7,431,081        9,691,372
    Interest expense        6,406,311     6,584,009        6,653,677
    Income tax expense
     (benefit)             (4,480,569)   54,985,420       (2,778,945)
    Stock based
     compensation             622,419             -          624,736
                              -------           ---          -------
      Adjusted EBITDA      $3,285,388   $25,788,498       $9,655,350
                           ==========   ===========       ==========
    

    
                                      Six Months Ended June 30,
                                      -------------------------
                                         2009           2008
                                      -----------   -----------
                                                   (As Restated)
    Net Income (loss)                $(13,573,226) $(35,689,114)
    Depreciation and amortization      19,466,335    14,471,104
    Interest expense                   13,059,988    12,559,135
    Income tax expense (benefit)       (7,259,514)   55,157,420
    Stock based compensation            1,247,155       203,428
                                        ---------       -------
      Adjusted EBITDA                 $12,940,738   $46,701,973
                                      ===========   ===========






    




For further information:

For further information: L. Melvin Cooper, SVP & CFO, Forbes Energy
Services Ltd., +1-361-664-0549; or Ken Dennard, Managing Partner, or Ben
Burnham, AVP, both of DRG&E, +1-713-529-6600, for Forbes Energy Services Ltd.
Web Site: http://www.forbesenergyservices.com

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FORBES ENERGY SERVICES LTD.

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