CES recorded net income of $2.8 million for the three month period ended December 31, 2012 as compared to $14.9 million in the prior year. CES recorded net income per share of $0.05 ($0.05 diluted) for the three months ended December 31, 2012 versus $0.27 ($0.26 diluted) in 2011. For the twelve month period ended December 31, 2012, CES recorded net income of $27.9 million, compared with the $41.7 million generated for the same period last year. Year-over year, basic net income per share was $0.50 ($0.49 diluted), a decrease from $0.76 ($0.74 diluted) per share for the same period in 2011. Year-over-year net income was negatively impacted by weaker gross margins, higher tax expense, and higher non-cash depreciation and amortization expenses and stock-based compensation.
Revenue from drilling fluids related sales of products and services in Western Canada was $35.1 million for the three months ended December 31, 2012 compared to $54.9 million for the three months ended December 31, 2011, representing a decrease of $19.8 million or 36%. Average revenue per Operating Day for the three months ended December 31, 2012, was $4,040 compared to $4,176 for the three months ended December 31, 2011, representing a decrease of 3%. As noted above, drilling fluid sales were negatively affected by lower year-over-year activity levels due to reduced customer spending as 2012 capital programs came to a close. Despite a slowdown in Canadian Operating Days during 2012, year to date daily average revenue per Operating Day was $4,419 compared to $4,050 in 2011, representing a year-over-year increase of 9%. Average revenue per Operating Day has trended upward over the last several years as operators continue to drill more complex, deeper and longer horizontal wells in the WCSB. These wells require more fluids in general but also more technically advanced fluids in order for the wells to be successfully drilled and cased. The trend though does appear to be flattening out as most drilling operations have turned to horizontal drilling and efficiencies are being implemented.
CES' estimated Canadian Market Share was approximately 30% in 2012, up from 28% in 2011. Estimated market share in Western Canada averaged 27% in Q4 2012, down from 30% in Q4 2011. CES' Operating Days were estimated to be 8,697 for the three month period ended December 31, 2012, a decrease of 34% from 13,156 Operating Days during the same period last year. The year-over-year decline in Q4 revenue is correlated to the decline in operating days experienced. CES' year-to-date Operating Days in Western Canada were estimated to total 38,139 for 2012 compared to 42,702 during the same period last year, representing a decrease of 11%. In Q4 2012, overall industry activity decreased approximately 26% from an average monthly rig count in Q4 2011 of 489 to 363 based on CAODC published monthly data for Western Canada. For 2012, the CAODC average monthly rig count for Western Canada has averaged 353 as compared to 417 in 2011, representing a year-over-year decrease of 15%.
Revenue generated in the US from drilling fluid sales of products and services for the three months ended December 31, 2012 was $50.8 million as compared to the fourth quarter of 2011 with revenue of $73.4 million, representing a decrease of $22.5 million or 31% on a year-over-year basis. As noted below, the reduction in operating days correlates to the decline in revenues in Q4 2012. Daily average revenue per Operating Day for the three months ended December 31, 2012, was $6,163 compared to $6,973 for the three months ended December 31, 2011, representing a decrease of 12%. This too is reflective of the shift of activity away from the Marcellus which, based on the technically advanced fluids deployed there, is the highest revenue per day region for the Company. Despite a slowdown in revenue generated in the US from drilling fluid sales in Q4 2012, for 2012, year-to-date revenue generated in the US totalled $266.7 million as compared to $250.2 million in the previous year representing an increase of $16.5 million or 7%. For 2012, daily average revenue per Operating Day was $6,934 compared to $6,414 in 2011, representing a year-over-year increase of 8%.
Most Popular Stories
- Twitter Names Woman to Board
- NSA Tracks 5 Billion Cellphone Records a Day
- Nelson Mandela Dies After Momentous Life
- W.H. Corrects Itself on Unclegate
- Nelson Mandela Dead at 95
- Fast-Food Workers Want $15 an Hour
- Roybal-Allard Tours Gordon Brush Plant
- Pope Francis Says He'll Fight Child Sex Abuse
- Aspen Contracting Adding 300 Jobs
- Yemen Attack Kills 52