Despite a drop in rig activity in the past year across the U.S., Nine Energy Service, Inc. reported third quarter earnings that fell within the company’s revenue guidance.
Revenues totaled $140.6 million but the company also had a net loss of $13.3 million. Adjusted EBITDA was $11.6 million.
The company, with operations in Oklahoma, had provided original third quarter revenue guidance between $140 million and $150 million, so it just made the range of guidance.
“We continued to see activity declines throughout Q3, with the U.S. rig count declining by over 150 rigs, or approximately 20%, since the end of 2022,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service.
She noted the ccompany experienced activity declines and operational inefficiencies because of weather and frac delays in August. Fox said it lead to “elevated white space in the calendar” and significantly impacted revenue and profitability.
“September returned to more normalized levels, and as we look forward, we are not expecting a recurrence of what happened in August in Q4 and expect the business to be back to trend for Q4, though some normal holiday and winter seasonality is expected,” said Fox.
She said the company’s cementing operations were also affected by the continued rig declines in the third quarter, especially because of the firm’s heavy commitment to the Haynesville and Eagle Ford plays.
“We believe we have reached a bottoming of the U.S. rig count and have already begun to feel a shift in sentiment as we look towards 2024. With what we know today, we anticipate 2024 activity to increase over current levels, but it is too early to provide a detailed outlook,” predicted Fox.