Depreciation expense increased by $0.3 million or 13.3% from $2.2
million for the nine months ended September 30, 1994 to $2.5 million for the
comparable fiscal 1995 period primarily as a result of the consolidation of
Servicios in 1995.
General and Administrative Expense
General and administrative expenses increased from $5.9 million to $7.6
million, an increase of $1.7 million or 29% during the nine months ended
September 30, 1995 compared with the nine months ended September 30, 1994.
Approximately 53% of this increase related to the consolidation of Servicios in
1995. The remaining increase was the result of increases in several of
WellTech's operating areas including drilling ($319,000), Mid Continent
($554,000) and Eastern ($175,000) partially offset by cost reductions at the
Interest expense increased from $550,000 to $1.4 million, an increase
of $850,000 or 155%, during the nine months ended September 30, 1995 compared
with the nine months ended September 30, 1994, primarily due to the bank
financing which was completed in January 1995 ($535,000) and the consolidation
of Servicios during the nine months ended September 30, 1995 ($325,000).
Gain on Disposition of Assets
The gain on disposition of assets decreased to $390,000 for the nine
months ended September 30, 1995 compared with $2,499,000 for the comparable 1994
period because the gain of approximately $3.0 million from the sale of the West
Texas operations to Key was included in the nine months ended September 30,
Net cash provided by operating activities decreased by $2.4 million, to
$(1.8) million, during the nine months ended September 30, 1995 from $0.6
million for the comparable 1994 period. Of this decrease $4.0 million was the
result of changes in working capital components offset by $1.5 million higher
cashflows from operations during the 1995 period. Net cashflows required for
investing activities decreased $4.0 million, from $7.7 million in 1994 to $3.7
million in 1995 primarily due to a decrease in contributions to unconsolidated
operations ($1.2 million) and a decrease in capital expenditures ($4.0 million).
These were offset by a decrease in proceeds from asset sales ($1.1 million). Net
cash from financing activities decreased by $2.0 million during the 1995 period
versus the 1994 period. While there was no new equity in 1995 as compared to
$4.6 million in 1994 there was an increase in the additions to new debt of $5.6
million in 1995. This net increase was offset by an increase in debt repayments
of $2.7 million.