Service & Supply | Oilfield Services | Capital Markets | Capital Expenditure | Private Equity Activity
Basic Energy Services Ups CapEx for Frac Equipment
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Basic Energy Services, Inc. recently approved an increase of $50 million in its 2014 capital expenditure plan for the purchase of approximately 60,000 hydraulic horsepower (HHP) of frac equipment.
The total 2014 capital expenditure plan including this increase now stands at $285 million, which includes $155 million for expansion projects.
Roe Patterson, Basic's President and Chief Executive Officer, stated, "Due to the improving environment of completion activity and the increase in customer demand, we decided to take advantage of these positive trends to expand our pumping services fleet. Profit margins for these services have been stable and have recently begun to improve with increased utilization. We believe the fundamentals and competitive returns we're experiencing justify adding more growth capital at this time. This increase in our capital plan includes adding a 100 bpm frac spread in our Permian Basin operations and adding additional HHP to build-out two 100 bpm frac spreads in our Mid-Continent operations.
"We project that this equipment will be in the field by September and will generate approximately $24 million of revenue in 2014. We now expect to have a total of 400,000 HHP of pumping equipment by the end of this year."