Dawson Geophysical SWOT & PESTLE Analysis

Strength

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Weakness

1. Majority of current activity is in areas of unconventional reservoirs: Conducting oil and gas extraction activities and hydraulic fracturing in areas of unconventional reservoirs are prone to higher production costs as compared to conventional sources. Companies that deal in unconventional oil and gas extraction activities are thus likely to be affected more in the current economic scenario which is seeing low oil prices and a dragging global economic growth. Dawson too is likely to be affected as most of its clients belong to the above category. A slowdown in their business and a stoppage to investments in new projects will translate directly to a lack of jobs of Dawson, affecting its growth.

2. Heavily dependent on North American markets: North America is the primary source of Dawson’s revenues. In end of FY 2019 on December 31 showed the company to have earned revenues of approximately $145.77 million of which $129.45 million was earned in the U.S. and $16.32 million was earned in Canada. This high dependency on North American markets can affect the company’s business and ability for growth in an industrial environment that is by nature highly challenging.

Opportunity

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Threat

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Political

1. Global political and military events impacting oil and gas prices: Oil and natural gas prices are seeing lots of fluctuations in recent times. This instability has been driven by global political, economic, and military events and is a trend that is likely to continue in the future. As oil and natural gas exploration and development companies determine their drilling programs and capital expenditure based upon the market prices of oil and natural gas, it is likely that Dawson will see a reduction in the demand of its services. The alternative will be that companies will be unable to pay Dawson for their services and consequently defer payments to a later date, affecting its revenues.

Economic

1. Oil and natural gas industry historically a cyclical industry: The geophysical services and the oil and natural gas companies are mutually dependent upon each other. The activities of the geophysical services are regulated by the expenditures that are conducted by oil and natural gas companies for the purpose of exploration, production, development and field management activities. This in turn is completely dependent upon oil and natural gas prices. Dawson has found the demand for its services to be affected by volume changes in domestic oil and natural gas exploration activities and commodity prices. A marked decline in the prices for oil and natural gas has the potential to adversely affect Dawson’s future prospects. Reducing prices are also likely to negatively impact the inclination of customers to start new exploration projects. Dawson faces a threat as it has no control over the affecting factors, including general economic conditions and the availability of credit.

Social

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Technological

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Legal

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Environmental

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