Re: Oil Service Stocks
I did a write-up for another forum, ValueForum, in July, 2006. Here is my write-up:
Essential Energy Services Trust is a new business trust with its recent spin-off in May 2006. Essential is an independent oilfield services organization based in Calgary, Alberta. Company provides essential production services to existing oil & gas wells in BC, Alberta & Saskatchewan.
The trust services are centered on activities that maintain and enhance production from producing oil and gas wells and related facilities. Thus the company’s revenues come from operating budgets as opposed to capex budgets. Therefore the Company’s revenues are less affected by changes in decisions involving drilling activities. IMHO this is a very big positive. Most oil servicing companies are focused on drilling activities. The Company believes that by focusing on “essential” services they will be less exposed to the cyclicality of the drilling cycle.
Quarterly Revenues were up 364% to $ 19.5 Million at 3/31/06
Yield 12.1% (Most service trusts yield around 8%)
TSX- ESN.un Symbol US EEYUF
Basic Units Outstanding as at May 31, 2006
27 Million
Market Cap $ 196 Million US
Very High Growth Company—See Business Brochure.
Overview of Company------ Business Brochure
essentialenergy.ca
Quote in U.S. Dollars tinyurl.com
Monthly Distribution per Unit
$0.083 CDN or annual $ .996 CDN
$ .0735 US or annual US $ .8825
Distribution Payout Ratio Objective 60-65%
Website www.essentialenergy.ca
• Independent Oilfield Services Trust
• Accretive Growth Through Aggregation of
Smaller Operations
• Strong Balance Sheet
• Board and Management in place,
Calgary based
• Focused on Essential Production Services
STRATEGY
• Continue to aggregate smaller operators
• Maintain and strengthen core brands
• Expand new equipment acquisitions
• Expand and improve recruitment, training,
safety and benefits programs
• Increase geographic diversification
• Profitability before growth
First Quarter Results:
essentialenergy.ca
------------- 3/31/06 -----Change
Revenue 19,521 364%
EBITDA 7,368 387%
EBITDA margin (%) 37.7%
Net income 3,063 254%
Net income margin (%) 15.7%
Funds From Operations (FFO) 7,056 375%
Total Assets 116,721
ESSENTIAL ENERGY SERVICES TRUST
950, 330 - 5th Avenue SW
Calgary, Alberta T2P 0L4
Phone: (403) 263-6778
Fax: (403) 263-6737 |
