Dawson Geophysical Reports Second Quarter 2016 Results

MIDLAND, Texas, Aug. 4, 2016

For the quarter ended June 30, 2016, the Company reported revenues of $28,086,000 as compared to $43,335,000 for the quarter ended June 30, 2015. For the second quarter of 2016, the Company reported a net loss of $11,589,000 or $0.54 loss per share attributable to common stock, as compared to a net loss of $11,877,000 or $0.55 loss per share attributable to common stock for the quarter ended June 30, 2015. The Company reported negative EBITDA of $1,464,000 for the quarter ended June 30, 2016 compared to negative EBITDA $5,704,000 for the quarter ended June 30, 2015.  For the first six months of 2016, the Company's EBITDA remains positive at $1,045,000.

During the second quarter of 2016, the Company operated four to six crews in the United States for most of the quarter. Utilization of several crews was unfavorably impacted by inclement weather conditions in several areas of operation late in the first quarter that continued into the early part of the second quarter, and again during the latter stages of the second quarter. The Company also experienced a few client driven project delays which resulted in longer than anticipated crew moves.

Stephen C. Jumper, President and Chief Executive Officer, said, "Demand for seismic data acquisition services in North America and worldwide continues to be soft in response primarily to low and uncertain oil prices. During the quarter ending June 30, 2016, oil prices averaged approximately $45 per barrel after  reaching a decade low price of $26 per barrel on February 11, 2016 and ending the quarter at approximately $48 per barrel for West Texas Intermediate. Since the end of the quarter, oil prices declined once again to below $40 during the first week of August. Given the recent fluctuations in oil prices, it remains to be determined when strengthening in oil prices will be sustained.  As we experienced during our first quarter of 2016, due to uncertainty in oil and natural gas prices, our client base continues to take a cautious approach to their capital spending budgets. Based on currently available information and anticipated  seismic data acquisition service demand levels, we believe we will continue to operate four to six crews through the third quarter of 2016. However, visibility beyond the third quarter remains limited. In response to these factors, we will continue our on-going effort to control costs, maintain a strong balance sheet, retain our key personnel and expand our position as a leading onshore seismic data acquisition company in North America."

Capital expenditures for the first six months of 2016 were $5,326,000, primarily composed of replacement recording channels lost in the spring 2015 floods in southeast Texas. These expenditures were funded primarily by insurance proceeds received related to that loss. The Company anticipates a capital budget for 2016 to be at maintenance levels below the $10 million approved by our board of directors. The Company's balance sheet remains strong with $67,195,000 of cash and cash equivalents and short term investments, $67,637,000 of working capital and $6,177,000 of debt and capital lease obligations as of June 30, 2016.

Jumper continued, "As mentioned during our first quarter call, 2016 will be a difficult year, and likely the most difficult in my thirty-plus years of experience with the Company and in the industry. Despite the recent fluctuations in oil prices, several of our client companies have recently announced increases in their capital programs going forward. We believe oil and gas companies will gradually start to put capital back to work when the oil and natural gas markets reach a supply and demand rebalance.  As oil and gas companies seek to maximize their production economics and efficiencies from both conventional and unconventional reservoirs, seismic technology should play an important role as it has historically with reliance on improved high resolution subsurface images. We continue to be well positioned to meet the needs of our clients and shareholders as conditions improve." 

On February 11, 2015, legacy Dawson Geophysical Company and legacy TGC Industries, Inc. consummated their previously announced strategic business combination. The merger transaction was accounted for as a reverse acquisition with legacy Dawson Geophysical being deemed the accounting acquirer with the results of legacy TGC Industries, Inc. being reflected in the Company's reported consolidated financial results only for periods from and after February 11, 2015. The merged companies adopted a calendar fiscal year ending December 31. Due to the foregoing, comparative financial results that include periods prior to February 11, 2015 are not comparable to financial results that include periods from and after February 11, 2015.  Additional information regarding the business combination and its impact on the Company's financial position are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed with the Securities and Exchange Commission on March 16, 2016 and includes the Company's audited consolidated financial statements (i) as of and for the years ended December 31, 2015 and September 30, 2014, (ii) for the three months ended December 31, 2014 and (iii) for the year ended September 30, 2013.