CALGARY, ALBERTA — (Marketwire) — 03/12/13 — Total Energy Services Inc. (TSX: TOT) (“Total Energy” or the “Company”) announces its consolidated financial results for the three and twelve-month periods ending December 31, 2012.
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
Total Energy–s results for the three and twelve months ended December 31, 2012 reflect a more challenging industry environment that began following a record first quarter for the Company. Continued weakness in North American natural gas prices and widening oil price differentials in Western Canada contributed to lower drilling and completion activity during the second half of 2012 compared to the second half of 2011.
Total Energy–s Contract Drilling Services division achieved 42% utilization during the fourth quarter of 2012, recording 603 operating days (spud to release) with a fleet of 15 rigs, compared to 801 operating days, or 62% utilization, during the fourth quarter of 2011 with a fleet of 14 rigs. Revenue per operating day decreased 6% for the fourth quarter of 2012 relative to the prior year comparable period due primarily to lower pricing. For the twelve months ended December 31, 2012, the Contract Drilling Services division achieved 2,460 operating days (44% utilization), compared to 3,042 operating days (60% utilization) for 2011. The Rentals and Transportation Services division achieved a utilization rate on major rental equipment of 41% during the fourth quarter of 2012 as compared to a 72% utilization rate during the fourth quarter of 2011. For 2012, rental equipment utilization averaged 47% as compared to 68% for 2011. The Gas Compression Services division generated revenues of $33.9 million for the three months ended December 31, 2012 compared to $33.0 million for the same period in 2011, an increase of 3%. For 2012, revenues increased by 8% to $121.3 million compared to $112.8 million in 2011. The Gas Compression Services division exited 2012 with a $34.5 million backlog of fabrication sales orders as compared to $33.6 million at December 31, 2011. At December 31, 2012, approximately 31,700 horsepower of compression equipment was on rent compared to 25,300 horsepower on rent at December 31, 2011. The gas compression rental fleet operated at an average utilization rate of 87% and 84% for the three and twelve month periods ended December 31, 2012, respectively, as compared to 78% for the same periods in 2011.
During the fourth quarter, Total Energy declared a quarterly dividend of $0.05 per share to shareholders of record on December 31, 2012. This dividend was paid on January 31, 2013.
Outlook
Western Canadian drilling activity started out somewhat slowly during the first part of January 2013. However, drilling activity levels steadily increased and have generally been at or above the five year average since mid-January. With ongoing weak natural gas prices, producers continue to focus their drilling, completion and production activities towards oil and natural gas liquids prospects. In the context of continued global economic uncertainty and unique commodity price challenges facing Canadian producers, the Company remains focused on the quality and efficiency of existing operations and the disciplined deployment of capital. In that regard, Total Energy is pleased to announce that Gerry Crawford was recently appointed Vice President, Field Services. Mr. Crawford has been with Total Energy since 1998 and had previously served as General Manager of the Company–s Rentals and Transportation Services division.
Total Energy–s previously announced preliminary 2013 capital expenditure plan of $32.7 million provides the Company with significant financial flexibility to pursue additional investment opportunities that may arise. Despite uncertain markets, Total Energy continues to strategically invest in the long term growth of its existing business divisions. The recently completed $14.0 million acquisition of a well-established process equipment fabrication business increases Total–s exposure to large North American and international liquids and natural gas infrastructure projects. Total Energy will continue to pursue investment opportunities that will generate acceptable returns on capital.
Total Energy–s financial condition remains strong with a long-term debt (including convertible debentures) to long-term debt plus equity ratio of 0.18 to 1.0, $90.7 million of positive working capital and no net debt as at December 31, 2012. Total Energy–s $35 million operating facility is currently fully available and undrawn.
Conference Call
At 2:30 p.m. MST today, Total Energy will conduct a conference call and webcast to discuss its fourth quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. The call is open to Shareholders and all other interested persons. A live webcast of the conference call will be accessible on Total–s website at by selecting “Webcasts”. Persons wishing to join the conference call live may do so by calling (866) 696-5910 or (416) 340-2217. Those who are unable to listen to the call live may listen to a recording of it on Total Energy–s website. A recording of the conference call will also be available until March 19, 2013 by dialing (800) 408-3053 (passcode 8257802).
Annual Meeting of Shareholders
Shareholders and other interested persons are invited to attend the annual meeting of Shareholders which will commence at 10:00 a.m. (Calgary time) on Wednesday, May 22, 2013 at the Calgary Petroleum Club, 319 – 5th Avenue S.W., Calgary, Alberta.
Selected Financial Information
Selected financial information relating to the three and twelve-month periods ended December 31, 2012 and 2011 is attached to this news release. This information should be read in conjunction with the consolidated financial statements of Total Energy and the attached notes to the consolidated financial statements and management–s discussion and analysis to be issued in due course and reproduced in the Company–s 2012 annual report.
Segmented Information
The Company operates in three main industry segments, which are substantially in one geographic segment. These segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labour required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in drilling, completion and production operations and Gas Compression Services, which includes the fabrication, sale, rental and servicing of natural gas compression and process equipment.
(1) Other includes the Company–s corporate activities, accretion of convertible debentures and obligations pursuant to long-term credit facilities.
Total Energy Services Inc. is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
Notes to Financial Highlights
Certain statements contained in this press release, including statements which may contain words such as “could”, “should”, “expect”, “believe”, “will” and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, the demand for products and services provided by Total Energy, Total Energy–s ability to attract and retain key personnel and other factors. Reference should be made to Total Energy–s most recently filed Annual Information Form and other public disclosures (available at ) for a discussion of such risks and uncertainties.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
Contacts:
Total Energy Services Inc.
Daniel Halyk
President & Chief Executive Officer
(403) 216-3921
Total Energy Services Inc.
Mark Kearl
Vice-President Finance and Chief Financial Officer
(403) 216-3920