Basic Energy Services
Even Goldman admitted that some firms on its buy list might take an extra quarter or two to see the bottom in the services sector. However, these companies also could provide the most opportunity for investors.
One example on the investment bank’s roll is Basic Energy Services (NYSE:BAS).
BAS provides a range of well-site services, including completion and remedial services, fluid services, well servicing and contract drilling. Yet, unlike some of its peers, it still has work to do on the earnings front.
Q4 2012 revenue decreased 11% to $302.1 million, which also was 15% lower than the $354.4 million reported in the fourth quarter of 2011. Basic blamed the results on lower U.S. land drilling rig counts in addition to the fact that most E&P companies had spent their annual capital budget by the beginning of the quarter and were content to coast into year end.
A new year equals new CAPEX spending. That, plus the improvement in onshore activity, could finally provide a big bump to Basic’s shares.