n.m. - not meaningful
PHX Energy's US operations had a record fourth quarter. For the three-month period ended December 31, 2012, US revenue of $37.8 million was generated compared to $23.5 million in the 2011-period; a 61 percent increase. In the Corporation's history, this level of revenue is second only to record results achieved in the third quarter of 2012. The Corporation's US operating days in the fourth quarter increased by 56 percent to 3,152 days from 2,015 days in the 2011-quarter. Average US day rates, excluding the motor rental division in Midland, Texas, increased by 4 percent to $11,557 in the 2012-quarter compared to $11,163 in the corresponding 2011-period. This increase is attributable to the increased utilization of the Corporation's value added technologies, such as its RWD technology.
In the fourth quarter of 2012, US industry activity, as measured by the average number of horizontal and directional rigs running on a daily basis, decreased by 6 percent to 1,302 rigs from 1,384 rigs in 2011. (Source: Baker Hughes) Despite reduced rig utilization levels, the Corporation continued to realize substantial growth in its US operations. Horizontal oil well drilling represented approximately 49 percent of Phoenix USA's overall activity, as measured by drilling days, in the fourth quarter of 2012 as compared to 39 percent in the 2011-quarter.
Phoenix USA achieved a remarkable year-over-year improvement in 2012, generating a record level of revenue, $137.7 million which is 47 percent higher than the $93.5 million reported in the 2011-year. Excluding the motor rental division in Midland, Texas, Phoenix USA achieved a 12 percent increase in its average day rates, which were $11,508 in 2012 as compared to $10,306 in 2011. The Corporation's US operating days also increased by 29 percent to 11,534 days in the 2012-year compared to 8,961 days in 2011-year. In comparison, US industry activity, as measured by the average number of horizontal and directional rigs running on a daily basis, increased by 5 percent to 1,367 rigs in 2012 compared to 1,305 rigs in 2011. (Source: Baker Hughes)
Intensified marketing efforts through the expansion of the marketing team in all US areas have made a positive impact on activity levels. The Corporation realized substantial growth from its successful penetration in the Permian Basin, South Texas, and Mid-Continent markets, and during the year, Phoenix USA was active in the Wolf Camp, Barnett, Eagleford, Marcellus, Utica, Granite Wash, Mississippian Lime, Niobrara, and Bakken plays.
With the success achieved by the motor rental division in Midland, Texas, additional marketing personnel are in place and the motor rental division is being expanded to the Mid-Continent area of the Gulf Coast region and the Rocky Mountain region. The Corporation has also realized a greater demand for its RWD technology and expects to add 3 RWD systems in the US in early 2013. PHX Energy foresees that these areas will further propel Phoenix USA's growth.
Reportable segment profit before tax for the three-month period ended December 31, 2012 increased to $4.2 million from $0.3 million in the 2011-period. For the year ended December 31, 2012, reportable segment profit before tax increased to $14.4 million from $5.6 million in 2011. The increase in profitability and improved margins in both periods was primarily due to higher activity and improved day rates.
International
(Stated in thousands of dollars)
Three-month periods ended Years ended December 31, December 31, 2012 2011 % Change 2012 2011 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Revenue 9,305 6,287 48 37,296 22,164 68Reportable segment profit before tax 1,460 917 59 8,778 3,666 139--------------------------------------------------------------------------------------------------------------------------------------------------------
