Yahoo Finance Quintana (QES) to Divest Pressure Pumping Assets, Cut Costs
Of late, Quintana Energy Services 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
Quintana Energy Services Inc. price | Quintana Energy Services Inc. Quote
Zacks Rank & Key Picks
Quintana carries a Zacks Rank #5 (Strong Sell).
Better-ranked players in the energy space include Enbridge Inc ENB, Dril-Quip, Inc. DRQ and World Fuel Services Corporation INT, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Enbridge earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Dril-Quip earnings beat the Zacks Consensus Estimate in three of the previous four quarters.
World Fuel Services earnings beat the Zacks Consensus Estimate in all the trailing four quarters.
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