Tulsa-based Cypress Energy Partners, L.P. announced a net loss of $11.6 million for second quarter of 2016, according to a company press release. The energy company previously lost $1.4 million during the first quarter of 2016. The second quarter results are down when compared to a net income of $1.9 million generated during the same period a year ago.
Cypress reported a revenue of $72.3 million for the second quarter 2016 compared with $91.0 million in the same period of 2015. Results were nearly flat to the $73.5 million for the first quarter of 2016.
“As discussed in May, we have taken steps to reduce our cost structure and protect liquidity during this continued downturn which totaled approximately $5 million in annual cost savings,” said Peter Boylan, Chairman and Chief Executive Officer of Cypress Energy. “These actions contributed to sequential improvement in the last month of the second quarter and should continue to impact future periods.”
The company reported that it faced an uphill battle involving significant environmental challenges in the energy industry, particularly in California which is proposing new rules and requirements for inspection of energy infrastructure.
Gas pipeline safety regulations proposed by the U.S. DOT’s Pipeline and Hazardous Materials Safety Administration included a massive 550-page notice of proposed rulemaking to broaden the scope of monitoring, testing and repairing pipelines through revisions within the pipeline safety regulations for onshore gas transmission and gathering pipelines.
In addition to expanding the coverage to gathering pipelines, PHMSA is also proposing to delete the grandfather clause and require all gas transmission pipelines constructed before 1970 be subjected to a hydrostatic spike pressure test. Currently, pipes built before 1970 are exempted from certain pipeline safety regulations. This could involve a significant increase in testing as approximately 60% of total U.S. natural gas pipelines were installed before 1970, according to a study commissioned by The INGAA Foundation, Inc.