Quintana Energy Services, Pre-Earnings Report
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Quintana Energy Services Inc. (NYSE: QES) provides oilfield services to onshore oil and natural gas exploration and production companies operating in conventional and unconventional plays in the United States. It operates through four segments: Directional Drilling Services, Pressure Pumping Services, Pressure Control Services, and Wireline Services.
The company has announced that it will release its first quarter 2018 financial results on Wednesday, May 9, 2018 after the market closes.
Analysts covering QES have an average “buy” rating on QES shares with an average target price of $12.42 per share. Average estimates for Q1 2018 call for revenues of $130.36 million and a net loss of $(.05) per share.
In connection with the Company’s initial public offering, which closed on February 13, 2018, QES converted $33.6 million of outstanding indebtedness under its term loan into shares of common stock of the Company, fully repaid and terminated the revolving credit facility and term loan and entered into a new $100 million senior secured asset-based revolving credit facility.
Recent Events
February 8, 2018. Quintana Energy announced today the pricing of its initial public offering of 9,259,259 shares of its common stock at $10.00 per share (the “Offering”). The shares are expected to begin trading on February 9, 2018 on the New York Stock Exchange under the ticker symbol “QES.” In addition, the Company has granted the underwriters of the offering a 30-day option to purchase up to an additional 1,388,889 shares of the Company’s common stock at the initial public offering price, less underwriting discounts and commissions. The Offering is expected to close on February 13, 2018, subject to customary closing conditions. https://finance.yahoo.com/news/quintana-energy-services-inc-prices-035500604.html
March 9, 2018. Higher oil prices and a positive earnings outlook for energy companies are expected to fuel a rebound in North American oil and gas initial public offerings in 2018, with bankers betting investors will remain optimistic about the sector even if the broader stock market remains volatile.
IPOs in the United States and Canada could reach their highest in four years, and oilfield services companies are seen leading the recovery, given their pressing capital needs.
More than a dozen energy companies are lining up to list this year, including several private equity-backed U.S. exploration and production (E&P) companies. https://finance.yahoo.com/news/north-american-energy-ipos-set-184846840.html
About
Quintana Energy Services Inc. provides oilfield services to onshore oil and natural gas exploration and production companies operating in conventional and unconventional plays in the United States. It operates through four segments: Directional Drilling Services, Pressure Pumping Services, Pressure Control Services, and Wireline Services. The Directional Drilling Services segment provides directional, horizontal, underbalanced, and measurement-while-drilling, as well as rental tool and pipe inspection services. The Pressure Pumping Services segment provides hydraulic fracturing stimulation services; cementing services, such as surface- and intermediate-casing and long-string cementing services; and a range of acid stimulation services comprising CO2 foamed acid stimulation services. As of December 31, 2017, this segment had a pressure pumping fleet of 245,925 hydraulic horsepower. The Pressure Control Services segment offers coiled tubing, rig-assisted snubbing, nitrogen, fluid pumping, and well control services for drilling, completion, and workover activities. As of December 31, 2017, this segment had a fleet of 23 coiled tubing, 36 rig-assisted snubbing, and 24 nitrogen pumping units. The Wireline Services segment offers pump-down services for setting plugs between frac stages, as well as the deployment of perforation equipment in connection with plug-and-perf operations; and other pump-down and cased-hole wireline services, including electro-mechanical pipe-cutting and punching. This segment also provides cased-hole production logging, injection profiling, stimulation performance evaluation, and water break-through identification services; and industrial logging services for cavern, storage, and injection wells, as well as operates Archer’s POINT proprietary detection system and SPACE imaging and measurement platform in the land market. As of December 31, 2017, it owned 49 wireline units. The company was founded in 2017 and is headquartered in Houston, Texas.
Analysts
Analysts covering QES have an average “buy” rating on QES shares with an average target price of $12.42 per share. Average estimates for Q1 2018 call for revenues of $130.36 million and a net loss of $(.05) per share.
Financial review
Fourth quarter 2017 revenue grew 16% to $130.9 million, up from $113.3 million in the third quarter of 2017. Fourth quarter 2017 net income was $2.1 million and Adjusted EBITDA was $18.8 million, compared to a net loss of $8.4 million and Adjusted EBITDA of $6.8 million for the third quarter of 2017. In the fourth quarter of 2016, revenue was $58.3 million, net loss was $35.9 million, and Adjusted EBITDA was a loss of $3.8 million. See the section of this release entitled “Non-GAAP Financial Measures” for a discussion of Adjusted EBITDA and its reconciliation to the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
General and administrative expense for the fourth quarter of 2017 was $18.8 million, compared to $19.4 million for the third quarter of 2017 and $19.0 million for the fourth quarter of 2016. Depreciation and amortization expense in the fourth quarter of 2017 was $11.4 million, compared to $11.2 million for the third quarter of 2017 and $19.2 million in the fourth quarter of 2016.
Capital expenditures totaled $7.7 million during the fourth quarter of 2017, compared to $4.8 million in the third quarter of 2017, and $3.2 million in the fourth quarter of 2016.
In connection with the Company’s initial public offering, which closed on February 13, 2018, QES converted $33.6 million of outstanding indebtedness under its term loan into shares of common stock of the Company, fully repaid and terminated the revolving credit facility and term loan and entered into a new $100 million senior secured asset-based revolving credit facility.
Stock influences and risk factors
Continuing increases in the prices of crude oil and natural gas may be a continuing catalyst for the company’s shares;
Federal or state legislative and regulatory initiatives related to induced seismicity could result in operating restrictions or delays in the drilling and completion of oil and natural gas wells;
They have operated at a loss in the past, and there is no assurance of profitability in the future;
Their business depends on domestic capital spending by the oil and natural gas industry, and reductions in capital spending could have a material adverse effect on business, financial condition and results of operations.
Stock chart
On Wednesday, May 9, 2018, QES shares were at $8.72 on traded volume of 6.8K shares. The current RSI (14) is 53.31
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