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Gross margin increased on a quarter-over-quarter basis due to improved tool procurement efficiencies and the disposal of the wireline business, which historically generated lower margins compared to the ongoing operations of the segment.
General and administrative Three months ended March 31,(Thousands of dollars, except percentages) 2013 2012----------------------------------------------------------------------------General and administrative expenses $4,406 $3,985 As a% of revenue 4% 3%--------------------------------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses are comprised of wages, professional fees, office space and other administrative costs incurred at the corporate and operations level. General and administrative expenses were higher in the first quarter of 2013 due to increased staffing costs, professional fees and infrastructure costs compared to the first quarter of 2012.
COLOMBIA OPERATIONS
In March 2013 Essential announced it is in the process of disposing of its Colombian operations. Essential continues to seek buyers for the assets. Two rod rigs will continue to operate until their contracts expire in the second quarter 2013.
FINANCIAL RESOURCES AND LIQUIDITYWORKING CAPITAL(1) As at As at March 31 December 31(Thousands of dollars, except ratios) 2013 2012----------------------------------------------------------------------------Current assets $ 125,931 $ 95,840Current liabilities, excluding current portion of long-term debt (49,221) (37,594)----------------------------------------------------------------------------Working capital $ 76,710 $ 58,246--------------------------------------------------------------------------------------------------------------------------------------------------------Working capital ratio 2.6:1 2.5:1--------------------------------------------------------------------------------------------------------------------------------------------------------EQUIPMENT EXPENDITURES AND FLEET Three months ended March 31,(Thousands of dollars) 2013 2012----------------------------------------------------------------------------Well Servicing $ 6,142 $ 8,903Downhole Tools & Rentals 444 823Corporate 238 464----------------------------------------------------------------------------Total equipment expenditures 6,824 10,190----------------------------------------------------------------------------Less proceeds on disposal of property and equipment (540) (7,318)----------------------------------------------------------------------------Net equipment expenditures(1) $ 6,284 $ 2,872--------------------------------------------------------------------------------------------------------------------------------------------------------
