SERVICE SECTOR / Alpine Oil Services 1st Quarter Report
ALPINE OIL SERVICES CORPORATION FIRST QUARTER EARNINGS INCREASE
41%, CASH FLOW INCREASES 20%
1998-05-19
CALGARY, AB
1998 1997
Revenue $10,790,995 $9,596,114
Gross Margin 4,428,943 3,679,462
Net Earnings 1,439,773 1,016,407
Earnings Per Share (diluted) $0.07 $0.06
Cash Flow From Operations 2,567,612 2,138,813
Cash Flow From Operations Per Share
(diluted) $0.12 $0.12
Weighted Average Shares Outstanding 21,223,026 16,788,026
Mr. Rod Hauser, President of Alpine Oil Services Corporation, today announced
financial results for the first quarter ended March 31, 1998. Revenue
increased 12% to $10.7 million from $9.6 million over the same period last
year. Net earnings increased 41% to $1.4 million. This increase is reflective
of the demand for Alpine's services with the industry's current focus on
natural gas exploration activities and continued growth in the underbalanced
drilling and telemetry divisions. Although the Company recorded $1.5 million
in product sales and services, Alpine expects to book significant equipment
sales during the remainder of the year. Fully diluted earnings per share
increased to $0.07 from $0.06 in the prior year, while cash flow from
operations per share remained at $0.12. Weighted average shares outstanding
reflect a 26% increase due primarily to the conversion last year of a $3.0
million convertible debenture. Gross profit margins increased to 41% from 38%
last year, while selling, general and administrative expenses dropped from
11.4% to 10.6% of revenue.
Drill stem testing and telemetry revenue increased 35% during the first
quarter of 1998 over the first quarter of 1997. The increase during the
second quarter of 1997 in the number of wireline units the Company operates
proved very timely, as wireline revenues increased approximately 40% for the
first quarter of 1998 over the same period last year. These increases further
exemplify the move from exploration for oil to natural gas. Production
testing and underbalanced drilling revenues increased approximately 25%; the
majority of this increase is due to the strength in the underbalanced
marketplace. Although Argentine revenues decreased $100,000 compared to the
same period last year, the operating loss decreased to $55,000 USD (net of
$45,000 of non-recurring items) during the first quarter, compared to an
operating loss of $215,000 USD for the same period last year. Additional
non-recurring items in the Argentine operation were expensed during the first
quarter, but the Company believes these operations will break-even during the
second quarter.
The fundamentals of Alpine's business remain strong and the demand for its
services is expected to continue at higher than historical levels during the
remainder of 1998. Alpine expects the number of wells drilled in Western
Canada during 1998 to decline 20% to 13,000 wells, but the proportion of
natural gas wells expected to be drilled should increase from 30% last year
to 40% of the total this year. Natural gas pipeline expansions over the next
few years are expected to place further focus on natural gas activities.
Alpine's services produce higher operating margins during a strong natural
gas exploration environment.
Due to continued strengthening in demand, the majority of Alpine's equipment
is booked through the first quarter of 1999. This has led the Corporation to
build additional drill packs for underbalanced drilling for use
internationally and domestically.
Alpine Oil Services Corporation is an innovative energy services entity
competing in the Canadian upstream oil and gas market. Internationally the
Company is involved in sales of its proprietary products. Various service
lines offered by Alpine include:
* Underbalanced surface pressure control equipment including a comprehensive
software program, rotating blowout preventers, and downhole electronic data
subs placed in the horizontal section for post-drilling operations
evaluations;
* Mechanical wireline and slickline services for downhole well
completions, remedial and work-over operations, depth determination,
deviated hole surveys, paraffin cutting, cementing operations, manipulation
of downhole chokes, circulating plugs, gauge cutters, swaging tools, safety
valves and gas lift valves;
* Bottom hole pressure and temperature surveys utilizing Alpine's electronic
subsurface pressure and temperature probes, downhole electronic shut-in
tools and fluid samplers;
* Telemetry Production Tools (TPTTM) used for reservoir evaluation, which are
wireline set and retrievable; no other wireline company in North America
offers these proprietary telemetry tools in conjunction with their wireline
operations;
* Pressurized frac recovery services used in conjunction with well
stimulation services;
* Open and cased hole drillstem testing services including innovations such
as Electromagnetic Data Transmission (Telemetry),inflate pressure
recorders, back-up deflate systems, and dual inflate packers.
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