Enseco Energy Services Corp. Announces Results for the Three and Six Months Ended Sep 30, 2009
CALGARY, ALBERTA–(Marketwire – Nov. 30, 2009) – Enseco Energy Services Corp. (“Enseco” or “the Company”) announces the sum monetary formula for the 3 and 6 months Sep 30, 2009.
HIGHLIGHTS
- On Oct 2, 2009, Enseco sealed the superfluous $0.4 million of the formerly voiced $2.0 million automobile debenture financing. With the shutting of this financing, Enseco’s lender augmenting the long-term debt trickery by $2.0 million which was rught away modernized to and used by the Company for operative collateral purposes.
- On Oct 28, 2009, the Company voiced which Mr. Lane Roberts was allocated as the brand brand brand brand brand brand new President and Chief Executive Officer of Enseco Energy Services Corp. Mr. Roberts brings an endless credentials of handling operations in ubiquitous markets and a resources of comparison turn oilfield services experience, both of which should infer to be a endless item to Enseco as it moves in to brand brand brand brand brand brand new geographic regions in sequence to grow and variegate the income stream.
- On Nov 12, 2009, the Company voiced the signing of a decisive agreement to take all of the superb usual shares of a in isolation directional services association with operations in the United States and Canada. This merger will yield Enseco with the compulsory scale compulsory to contest effectively in this marketplace by augmenting the directional apparatus swift from 6 directional kits before to to the merger to twenty-four directional kits in the sum entity. It is approaching which this merger will additionally urge the monetary formula of the sum entity by on condition which entrance to a incomparable apartment of motors and subordinate equipment, as good as the rejecting of surplus costs in between the dual companies.
- For the 3 months finished Sep 30, 2009, Enseco’s Directional Drilling multiplication finished a 40% enlarge in revenues to $2.1 million as compared to $1.5 million for the same duration in the before to year. This income enlarge was achieved notwithstanding one of the misfortune durations of training wake up in Western Canada.
Financial Highlights($000's solely per share data)
Three Three Six Six Months Months Months Months Ended Ended Ended Ended Sep 30, Sep 30, Sep 30, Sep 30, 2009 2008 % 2009 2008 % (unaudited) (unaudited) shift (unaudited) (unaudited) change --------------------------------------------------------------Revenue from continuing ops (1) $ 5,955 $ 7,499 (21%) $ 9,104 $11,226 (19%)
Operating detriment from continuing ops (1) (2,086) (999) (109%) (5,421) (3,462) (57%)Operating detriment from discontinued ops (1) - (695) 100% - (1,622) 100% -------------------------------------------------------------- Total (2,086) (1,694) (23%) (5,421) (5,084) (7%)
EBITDA (1) from continuing ops (772) (417) (85%) (2,855) (1,963) (45%)EBITDA (1) from discontinued ops - (405) 100% - (1,043) 100% -------------------------------------------------------------- Total (772) (822) 6% (2,855) (3,006) 5%
Cashflow (1) from continuing ops (943) (120) (686%) (3,112) (1,771) (76%)Cashflow (1) from discontinued ops - (383) 100% - (999) 100% -------------------------------------------------------------- Total (943) (503) (87%) (3,112) (2,770) (12%)
Net loss from continuing ops(1) (2,096) (1,271) (65%) (5,475) (3,821) (43%)Net loss from discontinued ops (1) - (711) 100% - (1,638) 100% -------------------------------------------------------------- Total (2,096) (1,982) (6%) (5,475) (5,459) -
Per Share DataEBITDA (1) $ (0.02) $ (0.02) - $ (0.06) $ (0.07) 14%Cashflow (1) $ (0.02) $ (0.01) (100%) $ (0.07) $ (0.06) (14%)Net detriment $ (0.05) $ (0.05) - $ (0.12) $ (0.12) -
Mar 31 Sep thirty 2009 2009 (audited) % change ------------ ------------ ------------Financial PositionTotal resources $ 43,661 $ 48,059 (9%)Working collateral (2) (18,012) (16,112) (12%)Shareholders' equity 17,783 23,671 (25%)
The initial 3 buliding of monthly monthly calendar 2009 one after another to simulate a diseased tellurian manage to buy and ensuing low appetite commodity prices. While the manage to buy has started to show signs of stabilization and oil pricing has recovered somewhat, there stays substantial direct doubt for both oil and healthy gas and this has triggered low underlying patron direct for oilfield services. At the finish of the entertain these conditions endure as the fundamentals for healthy gas one after another to show debility as a outcome of jot down tall storage levels in Canada and the United States. The supply genius was delivered by training wake up peaking in 2008 in most regions inside of the United States, in all radical apparatus plays in Texas and Louisiana. A poignant apportionment of these wells, and the compared gas prolongation gains, have been theme to tall lassitude rates and the brand brand brand brand new high decrease in training is commencement to show in not long ago reported prolongation levels.
As a outcome of reduce wake up levels attention wide, Enseco has gifted poignant waste and disastrous cashflow, and as at Sep 30, 2009 has a operative collateral necessity of $19.5 million. As at Sep 30, 2009 Enseco had authorized entrance to $17.4 million of the sum $20.0 million credit facility, but has drawn $19.9 million as of which date and has not been equates to to compensate all of the accounts on credit when due. The Company’s operative collateral comparative magnitude is reduction than 1.10:1 as compulsory by the lender pursuant to the conditions of the credit facility. The Company’s capability to go on the operations is contingent on restorative the crack in the credit facility, restorative the stream operative collateral deficiency, restorative the crack of the operative collateral compact with the lender, generating enough money upsurge to cover the handling costs, renegotiating the credit trickery with the lender, the one after another monetary await of the lender and raising one more equity. The Company has taken stairs to beget one more money upsurge together with shortening ubiquitous and executive costs together with layoffs and terminations of employees and salary reductions, entering in to handling franchise agreements for bound item purchases in sequence to enlarge operative collateral flexibility, and is looking pick sources of financing. The Company finished a in isolation chain of $2.0 million in 14% seductiveness per annum automobile debentures as of Oct 2, 2009. Upon closing, the Company’s lender augmenting the long-term debt trickery by $2.0 million from $14.0 million to $16.0 million. This volume was rught away drawn and used by the Company for operative collateral purposes.
Enseco has filed the unaudited monetary statements as at and for the 3 and 6 months finished Sep 30, 2009, and the concomitant Management’s Discussion and Analysis. These filings have been accessible underneath Enseco’s SEDAR form at www.sedar.com.
OUTLOOK
The tellurian mercantile retrogression marked down liquidity in the collateral markets and low healthy gas prices go on to have a disastrous stroke on the oilfield services industry. The training zone in both Canada and the United States is experiencing a duration of poignant decrease in utilization. According to attention sources, as at Nov 17, 2009, the United States active land training supply equate was down by we estimate 45% from the same duration in the before to year whilst the Canadian training supply equate was down by we estimate 30%. With dwindling utilization, the rival vigour on all of Enseco’s use offerings clever ensuing in reduce rates for services. Enseco expects this citation to go on in to the fourth entertain of monthly monthly calendar 2009 and longer depending on commodity prices. With the retrogression negatively impacting appetite demand, the United States healthy gas storage levels have been right away 9% aloft than storage volumes a year ago. Canada exports over half the healthy gas prolongation to the United States and Enseco’s oilfield use businesses have been rarely contingent on compared patron economics. The perspective which North America has an oversupply of healthy gas has driven gas prices lower. The brand brand brand brand new enlarge in United States healthy gas production, concerns over the declines in industrial gas expenditure and the awaiting of aloft liquefied healthy gas (“LNG”) imports has overshadowed reduce Canadian imports and the dump in active North American training supply count. Subject to direct distinctness and LNG imports, Enseco anticipates the supply decrease from marked down training might proceed to overtake direct reductions in late 2010, on condition which the matter for softened fundamentals to await a liberation in training activity.
Despite the severe macro issues confronting the oilfield services industry, Enseco has not long ago taken a series of assertive measures to safeguard the destiny success. The initial was the brand brand brand brand new appointment of Mr. Lane Roberts as Enseco’s brand brand brand brand brand brand new President and CEO. Mr. Roberts’ countless years of attention knowledge in downhole training technologies and his endless ubiquitous hit bottom should infer to be a poignant item to the Company as it moves brazen with the enlargement initiatives. In and with Mr. Roberts appointment, the Company finished a usual share in isolation chain with Mr. Roberts in sell for a debt valued at $850,000 which is approaching to be converted to money during the initial entertain of 2010. The second key magnitude was the vital merger of a in isolation directional services association which will enlarge Enseco’s register of directional training kits from 6 to 24. With the augmenting concentration on plane good technology, this merger represents a really plain and poignant step brazen in Enseco’s corporate evolution. The in isolation directional services association has a clever operational lane jot down and a unchanging story of essential results, which rught away positions Enseco with money upsurge certain handling formula and a plain substructure for destiny growth. In addition, the founders of the in isolation directional services association have concluded to stick on Enseco in assorted capacities to yield the Company with enough government abyss to govern Enseco’s vital plan. Enseco’s nearby tenure plan is to significantly enhance the participation in the directional services marketplace in the United States. This is being achieved by the setup of brand brand brand brand brand brand new sales bureau located in Houston, Texas. Enseco additionally expects to comprehend poignant price resources from the merger of the in isolation directional services association by improved utilizing existent assets, streamlining operational and comparison government purposes and responsibilities, and rationalizing the existent geographic footprint by shortening the series of handling comforts which Company functions out of. Enseco’s vital citation is right away obviously focused on Resource Play environments, the infancy of which need non-vertical wells in sequence to entrance the intensity resource, as good as aloft vigour armoured column and contrast vessels in sequence to hoop the ever augmenting pressures and volumes compared with brand brand brand brand brand brand new fracturing techniques.
Enseco is a premier retailer of appetite associated services handling via the Western Canadian Sedimentary Basin and name markets in the United States, with operational centres in Red Deer, Whitecourt, Edmonton, Beaverlodge, Grande Prairie, Fort St. John, Midale, Saskatchewan and Minot, North Dakota, as good as a corporate and sales bureau located in Calgary. Enseco is led by an gifted government group right away charity good swabbing, prolongation testing, open hole logging, and directional training services with a concentration on one after another worth origination by accretive acquisitions and organic growth.
(1) Operating detriment is detriment before to spoil detriment on unsubstantial assets, spoil detriment on goodwill, benefit (loss) on sale of apparatus and income taxes. EBITDA equates to benefit before to interest, taxes, debasement and amortization and is next to to benefit before to income taxes and seductiveness on long-term debt and pick seductiveness shortcoming and debasement and amortization and (gain)/loss on ordering of resources reduction unfamiliar sell benefit and spoil detriment on unsubstantial assets, and spoil detriment on goodwill. Cashflow equates to money flows supposing by operations before to changes in non-cash operative collateral items. Operating loss, EBITDA and cashflow have been not famous measures underneath Canadian in all supposed accounting beliefs (“GAAP”). Management believes which in further to net earnings, handling loss, EBITDA and cashflow have been utilitarian supplemental measures as they yield an denote of the formula generated by Enseco’s first commercial operation activities before to to care of how those activities have been financed, amortized or how the formula have been taxed in assorted jurisdictions as good as the money generated by Enseco’s first commercial operation activities. Readers should be cautioned, however, which handling loss, EBITDA and cashflow should not be construed as an pick to net benefit dynamic in suitability with GAAP as an indicator of Enseco’s performance. Enseco’s process of working out handling loss, EBITDA and cashflow might talk about from pick organizations and, accordingly, these total might not be allied to those disclosed by pick organizations.
(2) Working collateral equals stream resources reduction stream liabilities.
FORWARD-LOOKING STATEMENTS
Certain report and statements contained in this press recover consecrate forward-looking information, together with expectations per the shutting of the acquisition, the benefits to be subsequent from the merger including, expectations per revenue, cash-flow and handling income, enlargement opportunities, synergies and economies of scale as a outcome of the merger and the stroke on the additions to Enseco’s government group as a outcome of the acquisition, expectations per the acclimatisation of the debt from Mr. Roberts to money and the timing thereof, Enseco’s ongoing concentration and commercial operation plans, together with enlargement in the directional services marketplace in the United States and attention conditions together with function rates and direct for oilfield services and, statements as to destiny mercantile and handling conditions, which have been supposing by Management to capacitate investors to improved assimilate the business, and such report might not be suitable for pick purposes. These forward-looking statements have been formed on the opinions, expectations and estimates of government as at the date the statements have been done together with the Company’s stream bill (which is theme to change), expectations per the Company’s capability to go on the operations, the one after another await of the Company’s lender and the Company’s capability to lift one more equity, expectations relating to destiny mercantile and handling conditions and statements relating to Enseco’s marketing, operational and commercial operation plans, the rival sourroundings and opinions of third-party analysts with regard to approaching mercantile and handling conditions.
These forward-looking statements have been theme to a accumulation of risks and uncertainties and pick factors which could means tangible events or outcomes to talk about materially from those approaching or pragmatic by such forward-looking statements. Such factors include, but have been not singular to, fluctuations in the marketplace for oil and gas and associated products and services, domestic and mercantile conditions, the direct for services supposing by Enseco, attention foe and Enseco’s capability to capture and keep both business and key crew and the Company’s capability to go on the operations, the one after another await of the Company’s lender and Enseco’s capability to lift one more equity. Enseco has done assumptions regarding, but not singular to, commodity prices, unfamiliar sell rates, seductiveness rates, the accessibility of learned labour, and the timing and volume of collateral expenditures. Readers have been cautioned which the assumptions used in the credentials of such information, nonetheless deliberate in accord with at the time of preparation, might infer to be close and, as such, unjustified faith should not be placed on forward-looking statements. Enseco’s tangible results, opening or feat could talk about materially from those voiced in, or pragmatic by, these forward-looking statements, or if any of them do so, what benefits which Enseco will get therefrom. Enseco disclaims any goal or requisite to refurbish or correct any forward-looking statements, either as a outcome of brand brand brand brand brand brand new information, destiny events or otherwise, solely as compulsory by law.
Neither the TSX Venture Exchange nor the Regulation Service Provider (as which tenure is tangible in the policies of the TSX Venture Exchange) accepts shortcoming for the endowment or correctness of this release.
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