The COVID-19 pandemic has struck energy companies hard and Tulsa-based Cypress Environmental Partners, L.P. says it resulted in a $1.3 million second quarter loss for the company. And management says there is a liklihood of more volatility in the market for the remainder of the year.
“The second wave of virus cases, the reinstitution of select lockdowns, and the risk of lingering high unemployment creates an uncertain economic environment that likely persists through the rest of 2020 and until a vaccine is discovered,” said Peter C. Boylan III, chairman, president, and CEO.
“This pandemic is adversely impacting the energy industry, demand, prices, our customers, and in turn us. Given these factors, we are preparing for potential future volatility, while also focusing on structurally reducing our cost base and implementing several strategic initiatives across our companies,” he said.
Cypress already had suspended its common unit distributions. For the second quarter, the company had distributable cash flow of $300,000 and adjusted EBITDA of $3.1 million which was a 17% increase over the first quarter of the year.
The company’s Pipeline Inspection Services segment saw a 31% drop from quarter to quarter as its gross margin totaled $4.4 million. But the company’s Pipeline and Process Services segment gross margin increased 276% from the first quarter and 56% over a year earlier. The Water and Environmental Services segment recorded a 17% drop from the first quarter.
Despite the challenges, Cypress came out of the second quarter with about $27.8 million in cash and cash equivalents. The company is hopeful for the prospects of more business as rig activity and production is slowly returning in the Bakken.
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