During this period of adoption, our operations in both Canada and the United States remain concentrated with a few key customers and our revenues are subject to fluctuation dependent on the level of drilling operations by these customers in the areas in which we are servicing them. Their levels of drilling activity can be impacted by numerous factors including, but not limited to, operational difficulties, infrastructure limitations, weather conditions, hunting restrictions, and budgetary priorities. While these fluctuations add a degree of uncertainty to the timing of our cash flows, our current cost structure allows us to remain cash positive at approximately $10 million of revenue per month. Further, our capital commitments and requirements for 2013 are minimal. As such, our draw on our bank credit facility is expected to remain at a level driven by the amount of our accounts receivable.
Overall demand for pressure pumping services in Canada is expected to be stable in 2013 as compared to 2012 with oil and liquids-rich gas activity remaining the predominate area of the market given the continued weakness in natural gas prices. The increase in pressure pumping equipment made available to the Canadian market during 2012 resulted in resulted in price declines for hydraulic fracturing during 2012. It is expected that pricing pressures will remain during 2013 but significant additional price declines are not expected at this time as the equipment supply/demand balance appears to be near equilibrium for 2013. We will continue to monitor the capital budgets and cash flows of the exploration & production companies in light of recent weaknesses in oil prices, particularly given the poor oil price differentials due to limited pipeline capacity in Canada. We expect that many companies will construct capital budgets for 2013 within their cash flows rather than adding significantly to their debt positions. This phenomenon will particularly put pressure on smaller operating company budgets. As such, both their outlook on commodity prices and realized prices will impact the extent of their capital expenditures in 2013. Specifically, due to this uncertainty, we expect budget expenditures to be delayed during the first half of the year until there is more certainty and thus will not be as proportionately strong as the first quarter of 2012. During the first quarter we have experienced some customer delays pushing work to the second quarter through planned pad fracturing work.
We also expect that adoption by new customers will be achieved during 2013 as more data becomes available and less robust commodity prices encourage use of more effective technologies.
In the US, the overall pressure pumping market remains with an oversupply of equipment which we do not expect to reverse during 2013. Equipment builds combined with reduced activity in natural gas basins has resulted in this over supply. However, on a region by region basis, particularly in oil rich areas such as South Texas, activity remains strong. Our sales efforts in the US are focused on independent operators in South Texas and Colorado. Subsequent to quarter-end we performed work with Blackbrush in February but were delayed in March as drilling operations were completed. We anticipate that upon recommencement of operations in April this work will continue through 2013. However, we have experienced interruptions to fracturing activity on this project for various reasons and such interruptions may recur in the future. In addition to the Blackbrush work, we have a number of customers planning to use our services during 2013 however, the level of repeat activity with these customers cannot be determined at this time. In addition, we anticipate that our sales focus in these areas on independent operators will result in additional customer activity over the coming quarters.
Most Popular Stories
- Twitter Coming to Phones Without Internet
- Entravision Initiates Quarterly Cash Dividend
- Warner Bros. Unleashes 'Hobbit: Desolation of Smaug' Merchandise
- How Monthly Jobs Reports Move the Markets' Needle
- Consistent Hiring Points to Stronger Economy Ahead
- Shanghai Smog Forces Factory Shutdowns
- Thad Cochran, 76, Seeks 7th Senate Term
- How to Arm Yourself Against CryptoLocker Virus
- Eagle Deaths OK'd for Wind Power
- Amanda Bynes Enrolls in California's FIDM