Sets New Company Record for Rig and Truck Hours in a Single Month
ALICE, Texas, April 12, 2011 /CNW/ -- Forbes Energy Services Ltd. (TSX: FRB) today announced its rig and trucking hours for the month of March 2011.
For the month ending
March 31, February 28, March 31,
2011 2011 2010
---------- ------------- ----------
Working days 23 20 23
U.S. 34,125 25,857 25,807
Mexico 6,120 5,736 6,168
----- ----- -----
hours 40,245 31,593 31,975
Truck hours 116,252 94,286 93,742
John Crisp, Forbes Energy Services' President and Chief Executive Officer, commented, "We are extremely pleased to report such outstanding performance for the month of March. Total rig hours and total truck hours each represent the highest monthly total in the Company's history.
"The strong demand for our services is being driven by robust oil and natural gas liquids exploration activity in our core areas of South and West Texas, which are benefitting from historically high commodity prices. The drilling rig count in West Texas was up over 60% in the first quarter of 2011 compared to the first quarter of 2010. In the Eagle Ford Shale, the increase was over 200%. And the unconventional nature of these horizontal oil plays requires greater service intensity per well compared to conventional wells, which benefits both of our divisions.
"We are also back to operating at full utilization in Mexico now that our contract extension is finalized, and as mentioned on our recent conference call, we anticipate sending three additional well servicing rigs to Mexico in the next few months.
"The exceptional performance in March is indicative of the ongoing trends in our space. Industry conditions are already approaching the levels we experienced during the last peak in 2008, and showing no signs of slowing down. We implemented price increases in several of our markets in the first quarter of 2011 and anticipate similar increases in the second quarter. Although these will be partially offset by continued cost pressures from labor and fuel, we anticipate a net increase in margins for the next several quarters.
"The summer months are typically our strongest of the year, so we expect to continue building on the positive momentum from March. In addition to the price increases, we should see trucking hours continue their upward trend due to forty new trucks we're adding to the fleet over the next few months."
U.S. rigs generally work all weekdays except holidays. Mexico rigs generally work every day except holidays. Trucks generally operate every day except Sundays and holidays. Rig and truck hours represent actual hours billed to customers.
Forbes Energy Services cautions that several factors other than those discussed above may impact the Company's operating results and that a particular trend regarding the factors above may or may not be indicative of the Company's current or future financial performance.
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, Pennsylvania and Mexico.
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 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 or improve pricing on its core services; the potential for excess capacity in the industry; competition and the ability to obtain additional cash resources through a financing or other permitted transaction. 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, 2009 (the "Form 10-K") as well as other filings the Company has made with the Securities and Exchange Commission.
Contacts: Forbes Energy Services Ltd.
L. Melvin Cooper, SVP & CFO
Ken Dennard, Managing Partner
Ben Burnham, AVP
SOURCE Forbes Energy Services Ltd.