Best Energy Announces First Quarter 2010 Financial Results and Positive Cash Flows on Rising Revenues - Management to Host Conference Call Tuesday After Close of Market on May 18, 2010

HOUSTON and LIBERAL, Kan., May 17 /PRNewswire-FirstCall/ -- Best Energy Services, Inc. (OTC Bulletin Board: BEYS) announced today its results for first quarter ended March 31, 2010. The results reported herein reflect continuing operations only. In the fourth quarter of 2009, Best discontinued operations in its housing division, geological services and at the Bob Beeman drilling division. Accordingly, interim results for 2009 and 2010 reflect only the operations of our wholly owned Liberal, Kansas-based subsidiary Best Well Service ("BWS").

Revenues were $1,356,536 for the three months ended March 31, 2010 compared to $1,877,390 for the three months ended March 31, 2009, reflecting the industry wide significant decline in workover activity that began in January of 2009. That decline resulted in the Company's 25 rig workover fleet decreasing from 100% utilization at the beginning of January 2009 to less than a 20% utilization by the end of the quarter.

Consequent to Best's implementation of its market share strategy in the second quarter of 2009, over the past four quarters revenues have risen steadily from a low point of $840,000 in the second quarter of 2009, to $855,000 in the third quarter, $930,000 in the fourth quarter, and now $1,356,536 in the first quarter of 2010. Also, during the first quarter of 2010, revenues rose steadily on a month to month basis and have continued to do so thus far in the second quarter. The preliminary quarterly run rate indicated for the second quarter is approximately $1.7 million, a 25% gain from the first quarter, and a 102% gain from the year earlier level of $840,000 in second quarter 2009.

In line with strict cost containment implemented in 2009, direct operating expenses decreased by 35%, from $908,107 in the first quarter of 2009 to $591,032 in the first quarter of 2010. Direct operating expenses include direct labor, fuel and materials.

For the first quarter of 2010, Best's gross margin improved to 56% versus 52% in the prior year's first quarter, notwithstanding price reductions in the field for its workover services of 15%.

Indirect operating expenses held steady at $430,656, compared to $419,384 a year earlier.

Excluding non-cash G&A expenses, stock-based compensation, cash G&A for the first quarter of 2010 was $165,036, a decrease of 49% from the year earlier cash G&A of $326,555. The reductions in G&A reflect Best's continuing cost containment efforts at all levels.  Including non-cash items, corporate G&A for the first quarter of 2010 was $467,041 versus $679,306 a year earlier.

Interest expense for the first quarter of 2010 before allocations to discontinued operations totaled $664,372, including $339,385 of non-cash interest expense.

Best reported positive cash EBITDA from continuing operations for the first quarter of $169,812 and expects further improvements in the second quarter consequent to rising revenues. This is the first positive cash flow posted by the Company since the full impact of the 2009 activity declines began. Cash EBITDA from continuing operations in the second quarter of 2009 was a negative $693,000; for the third quarter of 2009 a negative $454,000; for the fourth quarter of 2009 a negative $227,000; and the positive $169,812 in the first quarter of 2010 as cited above.

The Table below summarizes results for the three month period ended March 31, 2010 and March 31, 2009.

The table that follows reconciles Best's Net Operating Income to Cash EBITDA from continuing operations for the first quarter of 2010 and for the preceding three quarters of 2009.

Commenting on the results of the first quarter of 2010, Mark Harrington, Chairman and CEO of Best stated, "It is extremely gratifying to all of us at Best to begin showing positive improvement in our operating results on all fronts—positive cash flow; sequential revenue growth; healthy margin maintenance in the face of last year's price reductions; and G&A cost containment. We are working diligently to achieve our most important goal of positive net income for our shareholders. Our efforts on that front focus on continued revenue growth in the quarters to come from higher rig utilization."

Mr. Harrington continued, "To achieve increased rig utilization, we continue to focus on growth in our existing market area of the Hugoton by demonstrating outstanding performance by our people in the field; and maintaining our excellent safety record, which now counts in excess of 520 days without an hour lost to a safety incident. Supplementing that effort, we are in active discussions with potential customers in the South Texas Eagle Ford shale trend, with the objective of relocating several rigs to that area in the future. In addition, we recently began a series of extensive meetings with our customers on our Hugoton Basin Financing Partners initiative. We are receiving very positive reception for the product and will continue our aggressive effort to launch the program in the coming months."

Mr. Harrington concluded, "We very much appreciate our shareholders vote of confidence during the first quarter in the $1.2 million equity raise, as well as the continued support of our senior lender, PNC Credit. Best's management and employees continue our efforts to bring value to our shareholders through results delivered from focused hard work at all levels."

Management will be hosting a conference call for all shareholders and analysts on Tuesday, May 18, 2010 at 4:15 PM Eastern Standard Time. Those wishing to participate may call in at that time to Toll Free Number: 1.800.434.1335, Conference Code: 76724175. The Call will be available for replay by dialing: Toll Free Number: 1.800.920.7487 Conference Code: * then 76724175.

About Best Energy Services, Inc.

Headquartered in Houston, Texas, Best Energy Services, Inc. is a leading well service/workover provider in the Hugoton Basin. For more information, please visit www.BEYSinc.com.

Certain statements contained in this press release, which are not based on historical facts, are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to substantial uncertainties and risks in part detailed in the respective Company's Securities and Exchange Commission filings, that may cause actual results to materially differ from projections. Although the Company believes that its expectations are reasonable assumptions within the bounds of its knowledge of its businesses, expectations, representations and operations, there can be no assurance that actual results will not differ materially from their expectations. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the Company's ability to execute properly its business model, to raise additional capital to implement its continuing business model, the ability to attract and retain personnel – including highly qualified executives, management and operational personnel, ability to negotiate favorable current debt and future capital raises, and the inherent risk associated with a diversified business to achieve and maintain positive cash flow and net profitability. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will, in fact, occur.  

SOURCE Best Energy Services, Inc.

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED