C&J Energy impacted by oil price volatility; net debt down 14% from Q2

By Lisa Kerner

Charlotte, N.C., Nov. 5 – C&J Energy Services Ltd. founder, chairman and chief executive officer Josh Comstock said he is “disappointed” with the company’s third-quarter financial results but pleased with its operational results.

“The third quarter was another extremely challenging quarter for the North American oilfield services industry due to the sustained weakness and volatility in oil prices at levels that caused further reductions in drilling, completion and production services activities,” Comstock said during C&J’s earnings call on Thursday.

C&J, as a result of market conditions, idled more equipment, further reduced head count and implemented other measures to control costs and bring operations in line with the fluctuation in activity and anticipated instability over the remainder of the year, according to Comstock.

The company ended the quarter with a cash balance of about $23 million. Net debt was down 14% sequentially, president and chief financial officer Randy McMullen said on the call.

Net long-term debt and capital lease obligations were about $1.12 billion at Sept. 30.

C&J had $94 million drawn and $12.6 million of letters of credit outstanding under its recently amended $400 million revolving credit facility, leaving $193.4 million available for additional borrowing.

Also, C&J had $1.1 billion outstanding under a term loan B facility, comprised of a $572.1 million term loan B-1 and a $482.6 million term loan B-2.

McMullen said the company has $217 million of “ample” liquidity to navigate through the challenging market conditions.

According to the CFO, C&J expects to benefit from working capital reductions over the next six months and estimates it can generate about $30 million of cash inflow, with an additional $20 million to be realized through real estate sales and tax refunds.

The company had a third-quarter net loss of $55 million, or $3.89 per diluted share, on revenue of $427.5 million. This compares with a net loss in the second quarter of $65.1 million, or $0.56 per diluted share, on revenue of $511.2 million

C&J Energy is a Houston-based provider of hydraulic fracturing, coiled tubing, cased-hole wireline, pumpdown and other oilfield services.

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