SERVICE SECTOR / Total Energy Services Q1 Results
TOTAL ENERGY SERVICES LTD. - FIRST QUARTER REPORT TO SHAREHOLDERS
CALGARY, May 26 /CNW/ - Total Energy Services Ltd. (''Total'') is pleased
to announce its results for the three months ended March 31, 1998.
Consolidated net earnings were $1,050,000 on revenue of $5,834,000 as compared
to earnings of $99,000 and revenue of $2,400,000 for all of 1997. Comparable
quarterly figures for the prior year are not available as Total commenced
operations in August 1997. On a fully diluted basis, earnings per share were
$0.08, funds from operations per share were $0.13, and earnings before
interest, taxes, depreciation and amortization (EBITDA) per share were $0.21.
The financial situation reflected on our balance sheet has improved
significantly since the December 31 year-end: total assets have increased from
$13,747,000 at December 31 to $34,084,000 at March 31, working capital has
improved from a deficit at December 31 of $3,836,000 to a surplus of $401,000
at March 31. During the first quarter a $12,000,000 five year term loan was
provided by the Hongkong Bank of Canada and a special warrant financing for
$10,000,000 was completed through a syndicate led by Peters & Co. Limited, RBC
Dominion Securities Inc., and Canaccord Capital Corporation. Total has filed a
preliminary prospectus in order to qualify the common shares, issuable upon
exercise of these special warrants, for trading.
Acquisitions -
March 5, 1998 we completed the acquisition of the drilling rental assets
of ELM Oilpatch Rentals Ltd. for $15,000,000. The ELM acquisition added
operating bases in Valleyview, Fox Creek, Grande Prairie, and Manning to our
Whitecourt and Red Earth operations. Since the effective date of the purchase
was January 3, we have included all but 2 days of the entire first quarter's
revenue and expenses from this acquisition.
On May 22, 1998 we announced our entry into the gas compression industry
by signing a letter of intent to acquire for $4,500,000 all of the shares of
Bidell Equipment Inc., a supplier of natural gas compression equipment
packages. Closing is scheduled for late summer. We believe this opportunity
within the expanding natural gas industry will complement our drilling rental
business, which is focused in the active gas drilling area of northwestern
Alberta.
Operations -
As expected, our first quarter was extremely active. For the months of
January and February utilization on the major lines of drilling rental
equipment such as loaders, 400 barrel tanks, sump tanks, and shale tanks were
at or near full capacity. Even though there was a decrease in utilization on
this equipment in March, the fleet of trucking equipment offset this trend
with an exceptionally strong month. In order to ensure a consistent corporate
identity with our customer base and to increase administrative efficiencies,
all of our drilling rental divisions and companies operate as Total Oilfield
Rentals Ltd. effective May 1.
People -
Our Company's most important asset is our people. At December 31 we had
an employee base of 25 people through our subsidiaries, GBM Trailer Services
Ltd. and Total Oilfield Rentals Ltd. With the ELM acquisition, we welcomed 65
new employees and wish them every success in their future with our Company.
The continued involvement of ELM's two senior managers, Bruce Leslie and Gerry
Crawford, has been a strong addition to the drilling rental management team.
Outlook -
The second quarter is traditionally the slowest quarter from a
utilization perspective due to ''spring breakup'', which restricts equipment
movement due to wet weather conditions and related road bans. This year's
second and third quarter may also be impacted by the unprecedented forest fire
near the Swan Hills region of northwestern Alberta and by continued volatility
in short term commodity prices, which creates uncertainty for the projected
cash flows of our customers.
In addition to the recently announced natural gas compression
acquisition, Total will continue to review opportunities to expand through
strategic acquisitions and internal growth in the drilling rental and
specialty production rental sectors.
For a complete first quarter report please contact Mark Gustafson,
President & CEO.
THE ALBERTA STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE
INFORMATION CONTAINED HEREIN
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For further information: Mark Gustafson, President & CEO, (403)
234-8710
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