The earnings for Gasfrac Energy Services, Inc. (GFS in Canada and GSFVF on the pink sheers) for the fourth quarter of 2012 were released tonight after the close of the market. For the second report in a row, GasFrac seems to have accomplished for the most part exactly what management had told us would happen. The restructuring to reduce the breakeven point to $10 million per month of revenue is close to being in place. Half of the company's equipment has been put into storage, so that it no longer incurs ongoing costs. The marketing and sales plan which focuses on only certain areas is in place. revenues were $46.9 million for the quarter. This is lighter than I would have liked to have seen, but nevertheless, the revenues are basically in line with what should have been expected. That is a very short summary of a rather long report from the company.
On the whole, GasFrac seems to have stopped the ongoing damage that was hitting the company relentlessly before the change in management last fall. New management is to be named in the next 60 days. Hopefully, the new CEO will be able to direct the company into clear and ongoing profitablity. Of course, it would help more if the price of natural gas were to rise with a concommitant increase in drilling.
This report is just another indicator that GasFrac is performing adequately for now. The issue here remains whether or not management can attract enough new customers to try GasFrac's innovative fracking process. I still have faith in the worth of the process; if the new management is up to the task, the rewards for holding the stock could be great.
GasFrac is still rated at Hold in my view.
DISCLOSURE: I am long GasFrac. Indeed, I added additional stock yesterday.
On the whole, GasFrac seems to have stopped the ongoing damage that was hitting the company relentlessly before the change in management last fall. New management is to be named in the next 60 days. Hopefully, the new CEO will be able to direct the company into clear and ongoing profitablity. Of course, it would help more if the price of natural gas were to rise with a concommitant increase in drilling.
This report is just another indicator that GasFrac is performing adequately for now. The issue here remains whether or not management can attract enough new customers to try GasFrac's innovative fracking process. I still have faith in the worth of the process; if the new management is up to the task, the rewards for holding the stock could be great.
GasFrac is still rated at Hold in my view.
DISCLOSURE: I am long GasFrac. Indeed, I added additional stock yesterday.
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