Question-and-Answer Session
Operator
(Operator Instructions). The first question comes from Stephen Gengaro – Jefferies & Co.
Stephen Gengaro – Jefferies & Co.
I guess a couple things, if you don't mind, but the first is can you help us understand the – obviously offshore services had a tremendous quarter. Can you help us understand the – how we got such a high revenue number? I mean is it utilization, is it pricing, it is all the above and sort of how we should sort of think about the revenue progression going forward?
Obviously with the realization that you do have seasonality here in the next couple quarters but you generated extremely high revenue. I'm just trying to understand how you got there and if you could add some color around that?
Stuart Brightman
Yes, well it's nice to be able to take that question. So I guess first of all as I said on the call, we certainly will see the seasonal aspects of that in the fourth quarter and would expect that to continue in the first quarter.
If you look at the third quarter that just ended, we benefited from a lot of things coming together at once. We said in the past that utilization is the driver for this business and all of our major assets were pretty much fully utilized during the entire third quarter.
And we clearly benefited from a lack of hurricane season, so that negative variable didn't impact us. But all the major assets worked. We've done a very good job of taking some cost out of this business over the last year and we continue to operate even at these revenue levels with lower overhead and lower headcount than we did last year, so we've benefited from the integration savings.
We had a nice mix of discrete services and integrated business. We've had one third party asset that we've used during the third quarter that will continue for a while. And we've done a back to back contract, so there's no exposure with TETRA, again lessons learned from the previous cycle.
Pricing has been strong but it hasn't changed dramatically. I think a lot of it's just driven by the utilization, the mix of the business, the good weather, taking overhead out and some very, very good project management.
The tougher question is, I'm sure you're alluding to is when we go forward, we still think there's going to be a lot of activity over the next year on Ike-related down structures and customers' continue to spend on risk mitigation to get to a quarter like we just experienced. Clearly everything needs to line up perfectly and we had the benefit in the third quarter and hopefully in the future those events will come together again.
- To read the full transcript on Seeking Alpha, click here »
