Pulse Seismic Inc. Reports Q3 2016 Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 11/02/16 -- Pulse Seismic Inc. ("Pulse" or "the Company") (TSX: PSD)(OTCQX: PLSDF) reports its financial and operating results for the three and nine months ended September 30, 2016. The unaudited condensed consolidated interim financial statements and management''s discussion and analysis will be filed on SEDAR () and will be available on Pulse''s website ().
HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016
Financial highlights for the three and nine-month periods are:
SELECTED FINANCIAL AND OPERATING INFORMATION
OUTLOOK
The Company is observing a number of positive signs that, although individually modest, collectively point towards a strengthened oil and natural gas industry outlook. Pulse''s improved seismic data library sales in the third quarter made up some of the ground lost in the weak second quarter. Pulse continues to have poor visibility regarding both traditional and transaction-based data library sales for the remainder of the year and, accordingly, overall data library sales for 2016 could be lower year-over-year.
Industry merger and acquisition activity, the primary source of Pulse''s transaction-based sales, has been lower than expected to date this year. Although many producing asset packages and companies continue to be marketed, bid-ask spreads remain high and some management teams appear to be attempting to "hold on" until better times.
Mineral lease auctions across western Canada have remained extremely low, as has oil and natural gas drilling activity. The Canadian Association of Oilwell Drilling Contractors'' revised 2016 drilling forecast, issued in late September, calls for only 3,562 wells to be drilled in 2016, down by 25 percent from the organization''s original forecast of 4,728 wells and down from 5,300 wells drilled in 2015. Drilling rig utilization was only 17 percent in the third quarter compared to 24 percent utilization of a larger drilling fleet in the same months of 2015.
These figures mainly confirm, however, that 2016 will be a weak year for the industry and suggest low field activity for the short term. Certain other forward-looking indicators appear to be improving. In mid-October crude oil prices did briefly climb above US$50 per barrel WTI amidst indicators that the growth in crude oil inventories has halted and may begin to decline.
Natural gas prices have improved markedly. The Alberta benchmark AECO price closed at $3.25 per mcf on October 20. This was up from $2.61 per mcf one year earlier and is significantly higher than the year-to-date average price of $1.95 per mcf. Natural gas storage volumes in the United States, though high, are now tracking the upper end of the five-year weekly range. The Energy Information Administration (EIA) recently predicted robust growth in U.S. residential natural gas consumption over the winter. Meanwhile, with barely 100 rigs drilling for natural gas in the U.S., production from unconventional shale reservoirs is continuing its decline.
Pipeline exports to Mexico continue to grow, while Cheniere Energy''s Sabine Pass project, North America''s first large-scale LNG export operation, now has two liquefaction trains licensed for commercial operations. The EIA forecasts that U.S. LNG exports will average 1.3 billion cubic feet per day in 2017, marking the country''s first material export volumes spanning an entire year. In Canada, federal approval (with numerous conditions) of the Pacific Northwest LNG export facility is a positive step towards a final investment decision for this landmark project.
Together, these factors suggest potential for a supply-demand rebalancing to take hold in North America. For western Canada''s upstream oil and gas sector, low to negative cash flows, typically heavy debt loads, low share prices and investor caution are likely to delay by a number of months or quarters a noticeable supply response in the form of greater field capital expenditures, land acquisitions and drilling.
The price-related trends for both major hydrocarbon commodities are, however, generally positive for the first time in at least two years. Higher industry capital spending historically has been associated with higher data library sales. For this reason, Pulse remains very cautious about the short term, but is becoming more optimistic regarding the medium term.
Due to its low cost structure, Pulse is a high-margin business under even modestly positive levels of data library sales, and creates significant leverage for cash EBITDA and shareholder free cash flow under a significant rebound in data library sales.
In the meantime, Pulse will remain financially prudent. With zero long-term debt and cash of $3.9 million at September 30, the Company''s balance sheet is even stronger than at the end of the first or second quarters. The Company''s ability to generate cash EBITDA and shareholder free cash flow in all three quarters underscores the benefits of the Company''s cash-focused business model. Pulse''s long-term goal continues to be growing into Western Canada''s largest licensable seismic data library.
CONFERENCE CALL
The Company''s next conference call will be held after the release of its year-end 2016 results, in March 2017. Should investors or analysts wish to contact the Company, please feel free to contact Neal Coleman or Pamela Wicks at the e-mail address or telephone number provided below.
CORPORATE PROFILE
Pulse is a market leader in the acquisition, marketing and licensing of 2D and 3D seismic data to the western Canadian energy sector. Pulse owns the second-largest licensable seismic data library in Canada, currently consisting of approximately 28,600 square kilometres of 3D seismic and 447,000 kilometres of 2D seismic. The library extensively covers the Western Canada Sedimentary Basin where most of Canada''s oil and natural gas exploration and development occur.
This news release contains information that constitutes "forward-looking information" or "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities legislation which includes, among other things, statements regarding:
Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to vary and in some instances to differ materially from those anticipated in the forward-looking information. Pulse does not publish specific financial goals or otherwise provide guidance, due to the inherently poor visibility of seismic revenue.
The material risk factors include, without limitation:
The foregoing list is not exhaustive. Additional information on these risks and other factors which could affect the Company''s operations and financial results is included under "Risk Factors" for the most recently completed financial year and interim periods. Forward-looking information is based on the assumptions, expectations, estimates and opinions of the Company''s management at the time the information is presented.
Contacts:
Pulse Seismic Inc.
Neal Coleman
President and CEO
403-237-5559 or Toll Free: 1-877-460-5559
Pulse Seismic Inc.
Pamela Wicks
VP Finance and CFO
403-237-5559 or Toll Free: 1-877-460-5559
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Datum: 02.11.2016 - 19:06 Uhr
Sprache: Deutsch
News-ID 1467627
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Oil & Gas
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