Dawson Geophysical Company (DWSN)

NetscribeBasMtrl (< 20) Submitted: 1/03/07 7:35 AM : Start Price: $36.49 DWSN Score: 54.77

Dawson Geophysical (DWSN) is a leading provider of onshore seismic data acquisition services in the United States as measured by the number of active data acquisition crews. With clients ranging from major oil and gas companies to independent oil and gas operators, as well as, providers of multi-client data libraries, it has added its twelfth crew in mid-2006 and primarily derives revenues from 3-D seismic data acquisition operations.

As a market leader and a pure play on the US onshore market, DWSN is well positioned to garner the maximum from the positive long-term prospects for the North American oilfield service industry, especially in the US onshore market. Encashing the above, the company signed an agreement which endorses it as the exclusive provider of onshore seismic data acquisition services to Schlumberger, the industry leader. Given continued volatility in oil prices translating into higher exploration activities, it is believed that demand for onshore seismic data should remain firm and DWSN’s order book of existing work extends into calendar 2007.

A continued geographic expansion in response to increased exploration activities led the operating revenues to surge by 44% in fiscal 2006. High oil and natural gas prices have created a favorable environment for drilling activities, thereby enhancing the business opportunities for Dawson. Although a competitive environment envisages a tough road ahead for the company, the completion of the data acquisition phase of a large 3-D multi-component seismic project in West Texas, will come handy in supporting its revenues.

As the corporation moves forward into 2007 and beyond, an unlevered balance sheet together with the culture of operational excellence provides a solid foundation for growth, in pursuit of the company’s vision of becoming a larger brand.

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