Total Energy Services Inc. Announces Q2 2016 Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 08/10/16 -- Total Energy Services Inc. ("Total Energy" or the "Company")(TSX: TOT) announces its consolidated financial results for the three and six months ending June 30, 2016.
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
Total Energy''s results for the three months ended June 30, 2016 reflect continued difficult industry conditions that were compounded by spring break-up in Canada. A strong focus on managing credit risk limited the Company''s provision for bad debt during the second quarter of 2016 to $0.2 million.
Total Energy''s Contract Drilling Services segment achieved 3% utilization during the second quarter of 2016, recording 52 operating days (spud to rig release), compared to 126 operating days, or 8% utilization, during the second quarter of 2015. Revenue per operating day decreased 23% for the second quarter of 2016 relative to the prior year comparable period due to reduced pricing.
The Rentals and Transportation Services segment achieved a utilization rate on major rental equipment of 10% during the second quarter of 2016 as compared to 19% during the second quarter of 2015. Segment revenue per utilized rental piece decreased 15% for the second quarter of 2016 compared to the same period in 2015 due to lower pricing. This segment exited the second quarter of 2016 with approximately 10,000 pieces of rental equipment and 112 heavy trucks as compared to 10,000 rental pieces and 120 heavy trucks at June 30, 2015.
Revenue in the Compression and Process Services segment decreased 34% to $37.1 million for the three months ended June 30, 2016 compared to $56.2 million for the same period in 2015. This segment exited the second quarter of 2016 with a $35.9 million backlog of fabrication sales orders as compared to $68.0 million at June 30, 2015 and $49.4 million at March 31, 2016. At June 30, 2016, approximately 12,000 horsepower of compression equipment was on rent compared to 28,900 horsepower on rent at June 30, 2015. The gas compression rental fleet operated at an average utilization rate of 30% during the second quarter of 2016 as compared to 69% during the second quarter of 2015.
Despite very low equipment utilization in the Contract Drilling Services and Rentals and Transportation Services segments due in part to the Company''s determination not to pursue unprofitable work, Total Energy generated $1.8 million of positive cash flow while at the same time minimized wear and tear on its equipment. Adjusting for bad debt expense and share-based compensation expense, second quarter EBITDA was $2.1 million.
During the second quarter, Total Energy declared a quarterly dividend of $0.06 per share to shareholders of record on June 30, 2016. This dividend was paid on July 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 second quarter of 2016, 10,000 common shares were purchased under the Company''s normal course issuer bid at an average price of $13.10 per share (including commissions). Such shares were cancelled subsequent to June 30, 2016.
Outlook
While oil and natural gas prices have strengthened since the beginning of 2016 and industry sentiment has modestly improved, commodity prices remain volatile and significant uncertainty exists regarding near term industry activity levels. In this challenging and uncertain market, Total Energy continues to focus on safely and efficiently managing its existing businesses, protecting its financial strength and liquidity and pursuing investment opportunities that provide acceptable risk-adjusted returns.
Subsequent to June 30, 2016, the Company''s Compression and Process Services segment received a $21.3 million order from a large Australian natural gas producer, which order is not included in the June 30, 2016 fabrication sales backlog. The compression equipment to be provided pursuant to this order is destined for Queensland, Australia and is currently expected to be completed by the end of the first quarter of 2017.
Total Energy''s 2016 capital expenditure budget is $17.2 million, of which $13.6 million had been expended to June 30, 2016. The remaining $3.6 million of budgeted capital expenditures relates primarily to expansion of the gas compression rental fleet and is discretionary in nature. At June 30, 2016 approximately $0.1 million of future capital expenditure commitments existed.
During the second quarter of 2016, Total Energy invested $5.1 million to complete two acquisitions that expanded the Company''s Rental and Transportation Services segment''s presence in North Dakota. Efforts are currently underway to relocate operations from a leased facility in Minot to a newly acquired facility in Watford City.
Total Energy''s financial condition remains very strong, with $79.4 million of positive working capital (including $14.9 million, or $0.48 per share, of cash and marketable securities) and no net debt as at June 30, 2016. The Company''s only bank debt consists of a $47.8 million mortgage loan, which is secured by approximately 60% of the Company''s real estate holdings (based on value). Total Energy''s $65 million operating credit facility was undrawn at June 30, 2016 and remains undrawn. The Company''s mortgage loan and operating credit facility require that it 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 June 30, 2016, Total Energy''s debt to equity ratio was 0.11 to 1.0 and the current ratio was 4.33 to 1.0.
Conference Call
At 9:00 a.m. MDT on August 11, 2016 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. A live webcast of the conference call will be accessible on Total''s website at by selecting "Webcasts". Persons wishing to participate in the conference call may do so by calling (866) 225-2055 or (416) 340-2218. 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 18, 2016 by dialing (800) 408-3053 (passcode 1814423).
Selected Financial Information
Selected financial information relating to the three and six month periods ended June 30, 2016 and 2015 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 2016 second quarter 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 oil and natural gas process equipment.
As at and for the three months ended June 30, 2016 (unaudited)
As at and for the three months ended June 30, 2015 (unaudited)
As at and for the six months ended June 30, 2016 (unaudited)
As at and for the six months ended June 30, 2015 (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 oil and natural gas 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 TSX 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: 10.08.2016 - 15:52 Uhr
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News-ID 1451942
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