Total Energy Services Inc. Announces Q2 2015 Results and Management Appointment
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 08/12/15 -- Total Energy Services Inc. ("Total Energy" or the "Company") announces its consolidated financial results for the three and six months ending June 30, 2015.
Financial Highlights
($000''s except per share data)
Notes 1 through 5 please refer to the Notes to the Financial Highlights set forth at the end of this release.
Total Energy''s results for the three and six months ended June 30, 2015 reflect challenging North American industry conditions arising from a substantial decline in oil prices that began in the second half of 2014. Included in the Company''s 2015 second quarter results are $4.5 million ($0.14 per share) of non-recurring expenses, which consist of a $3.8 million ($0.12 per share) increase to income tax expense and a $0.7 million ($0.02 per share) non-cash accretion expense arising from the early redemption of $69 million of convertible debentures.
Total Energy''s Contract Drilling Services division achieved 8% utilization during the second quarter of 2015, recording 126 operating days (spud to release), compared to 405 operating days, or 28% utilization, during the second quarter of 2014 with a fleet of 18 rigs in 2015 compared to 16 rigs in 2014. Revenue per operating day for the second quarter of 2015 decreased 10% compared to the second quarter of 2014 due primarily to reduced pricing. The Rentals and Transportation Services division achieved a utilization rate on major rental equipment of 19% during the second quarter of 2015 as compared to a 28% utilization rate during the second quarter of 2014. This division exited the second quarter of 2015 with 10,000 pieces of rental equipment and 120 heavy trucks as compared to 9,900 rental pieces and 109 heavy trucks at June 30, 2014. The Compression and Process Services division generated revenues of $56.2 million for the three months ended June 30, 2015, which was in line with the second quarter of 2014. This division exited the second quarter of 2015 with a $68.0 million backlog of fabrication sales orders as compared to $81.9 million at June 30, 2014 and $86.6 million at March 31, 2015. As at June 30, 2015 there was approximately 28,900 horsepower of compression equipment on rent as compared to 35,900 horsepower on rent at June 30, 2014. The gas compression rental fleet operated at an average utilization rate of 69% during the second quarter of 2015 as compared to 89% during the second quarter of 2014.
Cashflow was $6.3 million for the three months ended June 30, 2014, as compared to $19.9 million for the comparable period in 2014. The decrease in cashflow was due to reduced operating earnings and the payment of $4.2 million of income taxes during the second quarter of 2015 compared to $6.2 million of income tax recoveries received during the second quarter of 2014.
On June 29, 2015, the Alberta government enacted a 20% increase to the Alberta corporate income tax rate. This increase resulted in a one-time $3.8 million increase to total income tax expense for the three and six months ended June 30, 2015. $3.6 million of this increase was allocated to deferred income tax expense and resulted from the higher income tax rate being used in the calculation of deferred income tax balances.
During the second quarter of 2015, Total Energy redeemed $69 million of 5.75% convertible debentures, which redemption was financed with a $50 million bank loan and cash on hand. This refinancing will result in annual interest and administrative cost savings of at least $2.5 million. Upon maturity of the loan in May 2020, approximately $40.2 million of principal will be outstanding assuming only regular monthly payments are made. The Company declared a quarterly dividend of $0.06 per share to Shareholders of record on June 30, 2015. This dividend was paid on July 31, 2015. The Company did not repurchase any shares under its normal course issuer bid during the second quarter of 2015.
Outlook
Uncertainty as to the timing and extent of a recovery in North American industry activity levels is expected to result in difficult industry conditions for the remainder of 2015. Compounding the challenges facing energy producers and service providers operating in Alberta is the impact of recently enacted increases to the Alberta corporate income tax rate and carbon emission levies as well as uncertainty arising from the commencement of an Alberta oil and natural gas royalty review. In this challenging environment, Total Energy has taken steps to right-size its operations in response to reduced customer demand. Steps have also been taken to refocus sales efforts and relocate assets to jurisdictions based on current and future expected activity levels. Additional measures to rationalize the Company''s operating cost structure and relocate operating assets and personnel will be taken as future industry conditions and customer demand may warrant.
Total Energy''s financial condition remains strong with $86.2 million of positive working capital (including $14.0 million of cash or $0.45 of cash per share, basic) and no net debt as at June 30, 2015. Total Energy''s bank credit facilities require that the Company maintain a debt to equity ratio below 2.5 to 1.0 and a current ratio of at least 1.3 to 1.0. As at June 30, 2015, Total Energy''s debt to equity ratio was 0.11 to 1.0 and the current ratio was 3.31 to 1.0. The Company''s $65 million operating facility is currently undrawn and fully available. Total Energy will look to use its financial capacity to pursue investment and consolidation opportunities that may arise during these challenging times.
Management Appointment
Total Energy is pleased to announce the appointment of William Kosich as Vice President, Drilling Services effective immediately. In this newly created position, Mr. Kosich will provide leadership, guidance and support to the Company''s Contract Drilling Services division as Total Energy looks to continue to invest in the growth and development of this business line. Mr. Kosich is a seasoned industry executive with over 28 years of experience in oil and gas drilling operations. Most recently, Mr. Kosich served as Chief Operating Officer of a TSX listed Canadian contract drilling company operating in Canada, the United States and Mexico.
Conference Call
At 2:30 p.m. MDT today, Total Energy will conduct a conference call and webcast to discuss its second quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. The call is open to Shareholders and all other interested persons. A live webcast of the conference call will be accessible on Total''s website at by selecting "Webcasts". Persons wishing to join the conference call live may do so by calling (800) 355-4959 or (416) 340-2216. Those who are unable to listen to the call live may listen to a recording of it on Total Energy''s website. A recording of the conference call will also be available until August 19, 2015 by dialing (800) 408-3053 (passcode 4244949).
Selected Financial Information
Selected financial information relating to the three and six month period ended June 30, 2015 and 2014 is attached to this news release. This information should be read in conjunction with the condensed unaudited interim consolidated financial statements of Total Energy and the attached notes to the consolidated financial statements and management''s discussion and analysis to be issued in due course and reproduced in the Company''s second quarter report.
Condensed Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
Condensed Interim Consolidated Statements of Comprehensive Income
(in thousands of Canadian dollars except per share amounts)
Condensed Interim Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
Segmented Information
The Company operates in three main industry segments, which are substantially in one geographic segment. These segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labour required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in drilling, completion and production operations and Compression and Process Services, which includes the fabrication, sale, rental and servicing of natural gas compression and process equipment.
As at and for the three months ended June 30, 2015 (unaudited)
As at and for the three months ended June 30, 2014 (unaudited)
As at and for the six months ended June 30, 2015 (unaudited)
As at and for the six months ended June 30, 2014 (unaudited)
Total Energy Services Inc. is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
Notes to Financial Highlights
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, the demand for products and services provided by Total Energy, Total Energy''s ability to attract and retain key personnel and other factors. Reference should be made to Total Energy''s most recently filed Annual Information Form and other public disclosures (available at ) for a discussion of such risks and uncertainties.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
Contacts:
Total Energy Services Inc.
Daniel Halyk
President & Chief Executive Officer
(403) 216-3921
Total Energy Services Inc.
Yuliya Gorbach
Vice-President Finance and Chief Financial Officer
(403) 216-3920
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Datum: 12.08.2015 - 09:09 Uhr
Sprache: Deutsch
News-ID 1378627
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