Cathedral Makes Further Personnel ‘Adjustments,’ Updates Tech
Cathedral Energy Services Ltd.’s 2019 activity levels in the U.S. have declined over the comparative period in 2018 while the company restructures its U.S. operations.
In late 2019 Q1, the company replaced its senior managers within the U.S. division and since then it has made additional personnel adjustments to assist in improving its financial results.
Cathedral is expecting these adjustments to show in the financial results through 2019 and it has already seen improvement in the U.S. adjusted gross margin from 2019 Q1 to 2019 Q2.
The company’s revenue in Q2 fell to $32.55 million from $34.97 million. Net loss widened to $5.34 million from $2.5 million the previous year.
The U.S. market continues to be Cathedral's focus area for growth and “we believe we can increase our market share based on our value added and differentiated technology — FUSION MWD and nDurance drilling motors — and overall job performance.”
Cathedral expects to build on its 2019 Q2 Canadian market share gain as it moves through 2019 H2, based upon work awarded to the company. The Q2 market share gain was achieved by aggressive pricing in basins in which Cathedral has fit for purpose equipment that operates reliably, has low operating cost, and requires minimal, if no rentals. This allows for effective controls over its cost structure with reasonable field margins and requires no additional fixed costs.
Despite the challenges within the Canadian market in the near term, “Cathedral remains committed to expanding our presence in this market," said the company.
‘Double Bend’ testing
During 2019 Q2, the company continued testing of its patented “Double Bend” motor design and test results are promising.
“This motor design is expected to significantly reduce drag, stick slip and rotary torque as well as extending the length of laterals that can be drilled with a conventional bottom hole assembly (BHA) as compared to using a rotary steerable system (RSS),” the company said. “The ability to drill longer laterals with a conventional BHA is expected to result in significant savings to Cathedral's clients.
The company continues to seek additional testing opportunities as it moves toward commercialization of the tool.
In addition, Cathedral has constructed prototypes of its mud lubricated bearing section targeted to hotter wellbores and short run applications "where it is better suited and more cost effective than oil sealed bearing sections.”
Cathedral continues to be on track to introduce its next generation FUSION Dual Telemetry (DT) tool in 2019. In addition, a priority is to improve the data rates of its previously commercialized FUSION Linear Pulse (LP) tool. Further increases in the speed at which surveys are transmitted on FUSION LP are anticipated in Q3.
- Oilfield Services
- Cathedral Energy Services Ltd.