Select Energy Services sees improvement in first quarter 2017

By Patrick C. Miller | May 23, 2017

Select Energy Services Inc—provider of water solutions to the U.S. unconventional oil and gas industry—reported first quarter 2017 revenues of nearly $100 million, a $13 million increase over the previous quarter and $21 million more than the same quarter a year ago.

The Gainesville, Texas, company’s net loss for the first quarter was $12.3 million, compared to a net loss of $24.7 million in the fourth quarter of 2016 and a net loss of $25.8 million in the first quarter of 2016. 

John Schmitz, Select's chairman and CEO, said the company’s first quarter highlights included increased activity and demand for its services in several end markets, both in year-over-year and sequential comparisons. 

“These increases were primarily attributable to a higher level of drilling and completions activity due to the improved commodity price environment,” he said. “Additionally, we benefited from the growing trend by our customers to increase well completion intensity, which drives an increase in revenue per well.”

Schmitz noted that late in the first quarter, Select acquired Gregory Rockhouse Ranch Inc. (GRR) and some of its affiliates. GRR provides water and water-related services to E&P companies in the Permian Basin. 

“With this acquisition, we have enhanced our unique inventory of strategic water sources and valuable rights-of-way,” he said. “The acquisition provides us with additional rights to a vast array of fresh, brackish and effluent water sources with access to significant volumes of water annually and established water transport infrastructure, including more than 900 miles of temporary and permanent pipelines and related storage facilities and pumps, all located in the northern Delaware region of the Permian Basin.”.

Select’s adjusted EBITDA was $13.8 million in the first quarter of 2017 compared to $6.7 million in the fourth quarter of 2016 and $5.7 million in the first quarter of 2016. Select completed its initial public offering in April and publicly reported its financial results for the first time.

"We are very proud of what our management team and hard-working employees have built over the past 10 years,” Schmitz said. “We believe our differentiated service model and portfolio of strategic water sources, pipelines and infrastructure in all the major U.S. oil and gas shale basins will meet the needs for increased well completion intensity by our diversified customer base of major integrated and independent oil and gas companies for years to come."