Total Energy Services Inc. Announces 2015 Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 03/10/16 -- Total Energy Services Inc. (TSX: TOT) ("Total Energy" or the "Company") announces its consolidated financial results for the three months and the year ending December 31, 2015.
Financial Highlights
($000''s except per share data)
Total Energy''s results for the three months and the year ended December 31, 2015 reflect continued deterioration of the North American energy service industry. Low natural gas prices combined with further declines in crude oil prices resulted in substantial reductions to oil and gas producers'' capital expenditure budgets. Included in Total Energy''s results for the three months ended December 31, 2015 is an unrealized pre-tax loss of $2.7 million ($0.09 per share diluted) on the Company''s holding of marketable securities. For the 12 months ended December 31, 2015, the unrealized pre-tax loss on such marketable securities was $5.1 million, or $0.16 per share diluted. Excluding this unrealized loss but including non-recurring restructuring and severance costs, the net loss for the fourth quarter of 2015 was $0.7 million ($0.02 per share diluted) and for the twelve months ended December 31, 2015 net income was $13.0 million ($0.42 per share diluted).
Total Energy''s Contract Drilling Services division achieved 15% utilization during the fourth quarter of 2015, recording 241 operating days (spud to release) with a fleet of 18 rigs, compared to 755 operating days, or 49% utilization, during the fourth quarter of 2014 with a fleet of 17 rigs. Revenue per operating day decreased 24% for the fourth quarter of 2015 relative to the prior year comparable period due to reduced pricing.
The Rentals and Transportation Services division achieved a utilization rate on major rental equipment of 17% during the fourth quarter of 2015 as compared to 44% during the fourth quarter of 2014. Divisional revenue per utilized rental piece decreased 17% for the fourth quarter of 2015 compared to the same period in 2014 due to lower pricing that was offset somewhat by equipment mix. This division exited the fourth quarter of 2015 with approximately 10,000 pieces of rental equipment and 119 heavy trucks as compared to 10,000 rental pieces and 109 heavy trucks at December 31, 2014.
Revenue in the Compression and Process Services division decreased 47% to $36.5 million for the three months ended December 31, 2015 compared to $68.6 million for the same period in 2014. This division exited the fourth quarter of 2015 with a $48.9 million backlog of fabrication sales orders as compared to $108.0 million at December 31, 2014 and $51.1 million at September 30, 2015. Included in the December 31, 2015 backlog is an $8.1 million order purported to be cancelled without payment of the prescribed cancellation fee. Legal action has been taken to enforce such contract and no revenue has or will be recorded in respect of such order until resolution. At December 31, 2015, approximately 15,800 horsepower of compression equipment was on rent compared to 45,000 horsepower on rent at December 31, 2014 and 18,900 at September 30, 2015. The gas compression rental fleet operated at an average utilization rate of 42% for the fourth quarter of 2015 as compared to 89% during the fourth quarter of 2014 and 55% in the third quarter of 2015.
Cashflow was $5.9 million for the three months ended December 31, 2015, as compared to $30.3 million for the comparable period in 2014. The decrease in cashflow was due to lower operating earnings and the payment of $1.3 million of income taxes during the fourth quarter of 2015 as compared to nominal income tax payments being made during the fourth quarter of 2014. The increase in tax payments was due in part to the timing of taxation of the Company''s limited partnerships which has resulted in $12.7 million of taxes being paid in 2015 that relate to 2014 taxable income. Also included in income taxes paid during 2015 is $7.1 million that was required to be remitted following the previously announced income tax reassessment relating to the Company''s conversion from an income trust to a corporate structure in 2009.
During the fourth quarter, Total Energy declared a quarterly dividend of $0.06 per share to shareholders of record on December 31, 2015. This dividend was paid on January 29, 2016. For Canadian income tax purposes, all dividends paid by Total Energy on its common shares are designated as "eligible dividends" unless otherwise indicated. During the fourth quarter of 2015, no shares were purchased under the Company''s normal course issuer bid.
Outlook
The deterioration of North American energy service industry activity levels experienced during the fourth quarter of 2015 has continued into 2016. In this challenging environment, price competition has been fierce and Total Energy has and continues to take measures to lower its operating cost structure so as to remain competitive without compromising the safety and quality of its service and equipment. However, Total Energy has declined, and will continue to decline, unprofitable business opportunities in order to preserve its asset base. As part of this strategy, Total Energy has determined not to cannibalize its equipment fleet simply to defer repair and maintenance expenditures. While this discipline has resulted in lower equipment utilization in the short term, it is expected to benefit Total Energy when industry activity levels recover as the Company''s equipment fleet will be in a good state of repair and ready to resume normal operations in short order with relatively minimal startup expense.
Risks relating to the financial solvency of business counterparties have also increased materially in this difficult environment and Total Energy has declined to do business where the credit risk of potential customers and suppliers is determined to be unacceptable. Again, while this discipline has resulted in lower equipment utilization, it is expected to minimize bad debt expense and the cost and reputational damage associated with failed business partners.
Total Energy has taken significant steps to right size its operations to reflect current activity levels. As part of its rationalization efforts, the Company has seen its workforce decrease by approximately 40% during 2015. Total Energy''s Compression and Process Services division has also consolidated its fabrication operations into Company-owned facilities, thereby reducing fabrication capacity by approximately 20% until such time as additional capacity is required. Consistent with past practice, the Company does not segregate "non-recurring" costs associated with adjustments to its operating capacity as it considers such adjustments part of managing through the business cycle.
Despite the challenging environment, Total Energy continues to invest in the growth of its business and the maintenance of its equipment. Of the previously announced $12.1 million capital budget for 2016, $3.0 million relates to maintenance with the remaining $9.1 million targeted towards growth. Included in growth capital is $3.9 million for the acquisition of the operating assets of an oilfield equipment rental company based in the United States that was completed effective January 1, 2016.
Total Energy''s financial condition remains very strong, with $90.3 million of positive working capital (including $14.6 million, or $0.47 per share, of cash and marketable securities) and no net debt as at December 31, 2015. Total Energy''s bank credit facilities require that the Company maintain a debt (less cash) to equity ratio below 2.5 to 1.0 and a current ratio of at least 1.3 to 1.0. As at December 31, 2015, the Company''s debt to equity ratio was 0.12 to 1.0 and the current ratio was 3.74 to 1.0. Total Energy''s $65 million operating facility is currently undrawn and the Company will look to use its financial capacity and flexibility to continue to build sustainable shareholder value.
While the current industry downturn is as challenging as any experienced by Total Energy since commencing operations in 1997, the Company''s strong financial position, modern and well maintained fleet of equipment, established market presence and experienced and stable management team allow the Company to conduct its business in a disciplined and sustainable manner.
Conference Call
At 2:30 p.m. MST today, Total Energy will conduct a conference call and webcast to discuss its year end 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 March 17, 2016 by dialing (800) 408-3053 (passcode 7119515).
Annual Meeting of Shareholders
Shareholders and other interested persons are invited to attend the annual meeting of Shareholders which will commence at 10:00 a.m. (Calgary time) on Thursday, May 19, 2016 at the Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta.
Selected Financial Information
Selected financial information relating to the three months and year ended December 31, 2015 and 2014 is attached to this news release. This information should be read in conjunction with the 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 2015 annual report.
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 December 31, 2015 (unaudited)
As at and for the three months ended December 31, 2014 (unaudited)
As at and for the year ended December 31, 2015 (audited)
As at and for the year ended December 31, 2014 (audited)
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: 10.03.2016 - 10:12 Uhr
Sprache: Deutsch
News-ID 1421042
Anzahl Zeichen: 3097
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