Quintana (QES) To Divest Pressure Pumping Assets, Cut Costs
Zacks Investment Research | Aug 20, 2019 11:35PM ET
Of late, Quintana Energy Services (NYSE:QES) announces its exit from the pressure pumping business for conventional oil wells in Kansas and Bartlesville, OK to reduce costs and sustain itself in the tough operating environment.
As part of expense management measures, Quintana will be selling its prevalent pressure pumping assets to the privately-held Hurricane Services for $4.4 million. The assets, which included 12,000 hydraulic horsepower, five facilities and 26 employees, fetched revenues of $2.2 million for the first half of 2019.
In a bid to cut costs, Quintana also dissolved its COO position, earlier this month. This cost-controlling move will lower the company’s expenses by $1.42 million (plus a base salary of $393,077).
Further, Quintana has announced the layoff of almost 10% of its staff, which represents more than 130 employees.
This Houston, TX-based company is bearing the brunt of decelerating demand growth due to the upstream operators’ constraints in the capital expenditure budget.
Apart from cost issues, Quintana is looking to decrease debt to trim its interest outgo. For the recently reported second quarter, Quintana incurred interest expenses of $853,000, higher than the first quarter’s $671,000 and the year-ago quarter’s $433,000. Unsurprisingly, Quintana’s earnings missed the Zacks Consensus Estimate in the last four quarters.
The disposal of the pressure pumping business along with the other steps taken by the company is likely to help it improve its leverage and slash costs.
Quintana Energy Services Inc. Price
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.