Coil well service revenue experienced improved operating performance during the first quarter of 2013 as compared to the same period in the prior year as the demand for services was particularly strong in the Bakken oil play in Saskatchewan and Manitoba and in the Montney play in northern Alberta and British Columbia. Masted coil tubing revenue increased quarter-over-quarter as a result of the deep coil tubing reel trailer commissioned in the latter part of 2012 and an increase in coil tubing cycle charges and ancillary charges. Deep conventional coil tubing revenue increased as customers took advantage of the prolonged cold weather and continued service work in northern Alberta and British Columbia. Coil well service pumper revenue also increased from the addition of six new pumpers since the first quarter in 2012 and the training and recruiting initiatives undertaken in the latter part of 2012 which enabled Essential to crew additional pumpers. Revenue per hour for coil well service equipment increased due to the mix of services provided.
Service rigs maintained strong utilization during the first quarter of 2013 consistent with the same period in the prior year as demand for services remained high, particularly for Essential's three service rigs operating 24 hours a day on SAGD wells and service rigs operating in northern Alberta. Revenue per hour in the first quarter of 2013 increased due to the mix of services provided including the increase in SAGD work and associated rentals.
SEGMENT RESULTS - DOWNHOLE TOOLS & RENTALS Three months ended March 31,(Thousands of dollars, except percentages) 2013 2012----------------------------------------------------------------------------Revenue Downhole Tools & Rentals $ 37,342 $ 33,570 Other(i) - 1,681----------------------------------------------------------------------------Total revenue 37,342 35,251Operating expenses 24,374 23,738----------------------------------------------------------------------------Gross margin $ 12,968 $ 11,513 Gross margin % 35% 33%Downhole Tools & Rentals Revenue - % of total Tryton MSFS 60% 47% Conventional Tools & Rentals 40% 53%--------------------------------------------------------------------------------------------------------------------------------------------------------(i) Other revenue includes Essential's wireline business which was disposed of in February 2012.
Essential's downhole tools & rentals business focuses on oil and liquids-rich natural gas plays by providing production and completion tools and rentals for horizontal and vertical wells. Operations for this segment are well placed geographically across many of the active oil plays in the WCSB.
Downhole tools & rentals revenue increased during the first quarter as compared to the same period in the prior year due to the continued growth of the Tryton MSFS business and strong customer acceptance of the new MSFS tools introduced in the last half of 2012. The new tools provide an innovative, cost effective alternative to customers completing long reach horizontal wells.
