CALGARY, Alberta, Dec. 02, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) announces that its Board of Directors has declared a quarterly dividend of $0.09 (Cdn.) per common share for the quarter ending December 31, 2024 on Total Energy’s outstanding common shares. The dividend is payable on January 15, 2025, to shareholders of record at the close of business on December 31, 2024.
Unless otherwise indicated, all dividends paid by Total Energy are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Yuliya Gorbach, Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and nine months ended September 30, 2024.
Financial Highlights
($000’s except per share data)
Three months ended September 30
Nine months ended September 30
2024
2023
Change
2024
2023
Change
Revenue
$
241,940
$
232,016
4
%
$
659,960
$
678,638
(3
%)
Operating income
27,308
23,691
15
%
63,950
61,112
5
%
EBITDA (1)
50,543
44,955
12
%
131,280
123,685
6
%
Cashflow
48,091
40,784
18
%
119,022
118,864
–
Net income
19,706
19,237
2
%
50,623
49,455
2
%
Attributable to shareholders
19,731
19,231
3
%
50,685
49,472
2
%
Per Share Data (Diluted)
EBITDA (1)
$
1.28
$
1.10
16
%
$
3.27
$
3.00
9
%
Cashflow
$
1.22
$
1.00
22
%
$
2.97
$
2.88
3
%
Attributable to shareholders:
Net income
$
0.50
$
0.47
6
%
$
1.26
$
1.20
5
%
Common shares (000’s)(4)
Basic
38,802
40,149
(3
%)
39,385
40,555
(3
%)
Diluted
39,489
40,961
(4
%)
40,086
41,291
(3
%)
September 30
December 31
Financial Position at
2024
2023
Change
Total Assets
$
963,743
$
861,658
12
%
Long-Term Debt and Lease Liabilities (excluding current portion)
104,997
100,834
4
%
Working Capital (2)
97,274
123,439
(21
%)
Net Debt (3)
7,723
–
nm
Shareholders’ Equity
561,211
530,758
6
%
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
nm – calculation not meaningful
Total Energy’s results for the three months ended September 30, 2024 represent record quarterly financial results. Substantial share repurchases over the past year amplified the results on a fully diluted per share basis. Underpinning these record results were stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment that more than offset a year over year decline in drilling and completion activity in the United States.
Contract Drilling Services (“CDS”)
Three months ended September 30
Nine months ended September 30
2024
2023
Change
2024
2023
Change
Revenue
$
86,634
$
75,815
14
%
$
235,734
$
212,633
11
%
EBITDA (1)
$
20,563
$
21,670
(5
%)
$
57,414
$
51,830
11
%
EBITDA (1) as a % of revenue
24
%
29
%
(17
%)
24
%
24
%
–
Operating days(2)
2,836
2,880
(2
%)
7,687
7,723
–
Canada
1,861
2,009
(7
%)
4,954
5,023
(1
%)
United States
328
535
(39
%)
1,033
1,696
(39
%)
Australia
647
336
93
%
1,700
1,004
69
%
Revenue per operating day(2), dollars
$
30,548
$
26,325
16
%
$
30,667
$
27,532
11
%
Canada
25,026
24,522
2
%
26,137
25,668
2
%
United States
27,829
28,540
(2
%)
28,566
28,326
1
%
Australia
47,808
33,577
42
%
45,144
35,522
27
%
Utilization
29
%
33
%
(12
%)
27
%
30
%
(10
%)
Canada
27
%
28
%
(4
%)
24
%
24
%
–
United States
30
%
48
%
(38
%)
31
%
53
%
(42
%)
Australia
41
%
73
%
(44
%)
46
%
74
%
(38
%)
Rigs, average for period
105
94
12
%
103
94
10
%
Canada
76
77
(1
%)
77
77
–
United States
12
12
–
12
12
–
Australia
17
5
240
%
14
5
180
%
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Operating days includes drilling and paid standby days.
Canadian drilling activity during the third quarter of 2024 was relatively consistent with 2023 while United States activity continued to lag the prior year. Canadian operating days were negatively impacted when an AC double drilling rig was damaged in July during transit. The rig returned to service in mid-October following completion of repairs. In Australia, Saxon contributed $20.2 million of revenue during the third quarter of 2024. Included in 2023 third quarter segment EBITDA was a $4.1 million realized foreign exchange gain on settlement of intercompany notes. Excluding the effect of this foreign exchange gain, third quarter segment EBITDA increased 17% as compared to 2023 and the segment EBITDA margin increased from 23% to 24%. The substantial year over year increase in third quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.
Rentals and Transportation Services (“RTS”)
Three months ended September 30
Nine months ended September 30
2024
2023
Change
2024
2023
Change
Revenue
$
19,437
$
21,137
(8
%)
$
59,614
$
65,362
(9
%)
EBITDA (1)
$
8,179
$
7,263
13
%
$
23,958
$
23,977
–
EBITDA (1) as a % of revenue
42
%
34
%
24
%
40
%
37
%
8
%
Revenue per utilized piece of equipment, dollars
$
12,868
$
12,825
–
$
42,297
$
42,473
–
Pieces of rental equipment
7,960
7,659
4
%
7,960
7,659
4
%
Canada
7,040
6,767
4
%
7,040
6,767
4
%
United States
920
892
3
%
920
892
3
%
Rental equipment utilization
19
%
19
%
–
18
%
18
%
–
Canada
18
%
18
%
–
16
%
16
%
–
United States
29
%
27
%
7
%
33
%
36
%
(8
%)
Heavy trucks
67
69
(3
%)
67
69
(3
%)
Canada
46
48
(4
%)
46
48
(4
%)
United States
21
21
–
21
21
–
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Third quarter revenue in the RTS segment decreased as compared to 2023 due to lower United States revenue. While United States equipment utilization increased slightly, lower pricing due to competitive market conditions and the mix of equipment operating contributed to a year over year decline in third quarter revenue. Despite the decline in segment revenue, effective cost management resulted in higher third quarter EBITDA and EBITDA margins as compared to 2023.
Compression and Process Services (“CPS”)
Three months ended September 30
Nine months ended September 30
2024
2023
Change
2024
2023
Change
Revenue
$
110,567
$
110,959
–
$
297,547
$
322,207
(8
%)
EBITDA (1)
$
19,336
$
14,404
34
%
$
47,795
$
39,402
21
%
EBITDA (1) as a % of revenue
17
%
13
%
31
%
16
%
12
%
33
%
Horsepower of equipment on rent at period end
52,881
36,616
44
%
52,881
36,616
44
%
Canada
16,661
15,226
9
%
16,661
15,226
9
%
United States
36,220
21,390
69
%
36,220
21,390
69
%
Rental equipment utilization during the period (HP)(2)
77
%
69
%
12
%
77
%
75
%
3
%
Canada
72
%
73
%
(1
%)
70
%
77
%
(9
%)
United States
79
%
67
%
18
%
80
%
74
%
8
%
Sales backlog at period end, $ million
$
189.0
$
152.9
24
%
$
189.0
$
152.9
24
%
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2) Rental equipment utilization is measured on a horsepower basis.
CPS segment revenue for the third quarter of 2024 was consistent with 2023 and decreased during the first nine months of 2024 as compared to the same period in 2023. Improved fabrication efficiencies and a significant increase in compression horsepower on rent contributed to the year over year increase in segment EBITDA and EBITDA margin. The quarter end fabrication sales backlog increased by $36.1 million compared to the $152.9 million backlog at September 30, 2023 and decreased sequentially by $15.6 million from the $204.6 million sales backlog at June 30, 2024.
Well Servicing (“WS”)
Three months ended September 30
Nine months ended September 30
2024
2023
Change
2024
2023
Change
Revenue
$
25,302
$
24,105
5
%
$
67,065
$
78,436
(14
%)
EBITDA (1)
$
4,943
$
5,044
(2
%)
$
11,344
$
16,177
(30
%)
EBITDA (1) as a % of revenue
20
%
21
%
(5
%)
17
%
21
%
(19
%)
Service hours(2)
24,680
26,044
(5
%)
67,307
81,920
(18
%)
Canada
13,412
12,140
10
%
37,229
38,988
(5
%)
United States
2,613
6,370
(59
%)
9,243
18,781
(51
%)
Australia
8,655
7,534
15
%
20,835
24,151
(14
%)
Revenue per service hour(2), dollars
$
1,025
$
926
11
%
$
996
$
957
4
%
Canada
958
923
4
%
962
955
1
%
United States
861
944
(9
%)
883
980
(10
%)
Australia
1,179
913
29
%
1,109
944
17
%
Utilization(3)
27
%
30
%
(8
%)
25
%
32
%
(20
%)
Canada
27
%
24
%
13
%
24
%
26
%
(8
%)
United States
24
%
63
%
(62
%)
31
%
63
%
(51
%)
Australia
33
%
28
%
18
%
26
%
31
%
(16
%)
Rigs, average for period
79
79
–
79
79
–
Canada
55
56
(2
%)
56
56
–
United States
12
11
9
%
11
11
–
Australia
12
12
–
12
12
–
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby. (3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.
Third quarter WS segment revenue increased in 2024 as compared to 2023 due to increased activity in Canada and Australia that offset a substantial decline in United States activity. Segment EBITDA was modestly lower as higher operating income in Canada and Australia was more than offset by the decline in United States operating income. Activity levels in the United States were significantly lower due in part to significant customer consolidation. Increased pricing and utilization in Australia was due to the deployment of upgraded rigs.
Corporate
During the third quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. Including the acquisition of Saxon, $112.4 million of capital expenditures have been funded to September 30, 2024.
Total Energy exited the third quarter of 2024 with $97.3 million of positive working capital, including $61.9 million of cash, and $80 million of available credit under its $175 million of revolving bank credit facilities. Included in current liabilities is a $41.5 million mortgage loan that matures in April of 2025. Total Energy expects to repay this debt at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at September 30, 2024 was 5.26%.
Outlook
Despite continued global economic uncertainty and commodity price volatility, industry conditions remain relatively stable. Contributing to this stability is continued investment to increase North American LNG export capacity, a strong Asian LNG market and the recent completion of the Trans Mountain pipeline expansion in Canada. Total Energy’s efforts to grow its Australian business continued in the third quarter when two drilling rigs and a service rig commenced operations under long term contracts.
Total Energy continues to see opportunities to upgrade and reactivate equipment as well as targeted opportunities to build new equipment. In that regard, the Board of Directors has approved a $19.8 million increase to the Company’s 2024 capital expenditure budget to $86.1 million. $13.1 million of this increase is directed towards growth opportunities, including the upgrade of two Saxon drilling rigs and one service rig in Australia that will be deployed in the first quarter of 2025 under long term contracts. Also included in growth capital is $1.0 million of new rental equipment for the RTS segment that will be deployed during the fourth quarter of 2024. The remaining $6.7 million includes the purchase of new drill pipe and an operating facility currently leased by the RTS segment in the United States as well as drilling rig recertifications. Including this increase, $14.2 million of capital commitments carried forward from 2023 and the acquisition of Saxon, projected 2024 capital expenditures total $147.7 million, of which $112.4 million has been funded to September 30, 2024. The Company expects to fund the remaining $35.3 million of capital commitments with cash on hand and cashflow, with approximately $10.0 million expected to be funded in 2025.
Conference Call
At 9:00 a.m. (Mountain Time) on November 7, 2024 Total Energy will conduct a conference call and webcast to discuss its third quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (844) 763-8274 or (647) 484-8814. 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 December 7, 2024 by dialing (855) 669-9658 (passcode 1362549).
Selected Financial Information
Selected financial information relating to the three and nine months ended September 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
September 30
December 31
2024
2023
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
61,879
$
47,935
Accounts receivable
147,293
137,604
Inventory
116,359
98,179
Prepaid expenses and deposits
16,763
16,735
342,294
300,453
Property, plant and equipment
617,129
557,152
Deferred income tax asset
267
–
Goodwill
4,053
4,053
$
963,743
$
861,658
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
132,910
$
116,794
Deferred revenue
53,477
39,321
Contingent consideration on business acquisition
2,700
–
Income taxes payable
4,489
9,771
Dividends payable
3,453
3,198
Current portion of lease liabilities
6,528
5,880
Current portion of long-term debt
41,463
2,050
245,020
177,014
Long-term debt
95,000
90,947
Lease liabilities
9,997
9,887
Deferred income tax liability
52,515
53,052
Shareholders’ equity:
Share capital
240,563
251,283
Contributed surplus
5,273
4,805
Accumulated other comprehensive loss
(18,235
)
(25,506
)
Non-controlling interest
259
521
Retained earnings
333,351
299,655
561,211
530,758
$
963,743
$
861,658
Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)
Three months ended September 30
Nine months ended September 30
2024
2023
2024
2023
Revenue
$
241,940
$
232,016
$
659,960
$
678,638
Cost of services
178,530
175,235
491,092
522,270
Selling, general and administration
13,337
12,027
37,512
33,586
Other expense (income)
(844
)
238
(720
)
(208
)
Share-based compensation
518
701
1,940
1,457
Depreciation
23,091
20,124
66,186
60,421
Operating income
27,308
23,691
63,950
61,112
Gain on sale of property, plant and equipment
144
1,140
1,144
2,152
Finance costs, net
(2,330
)
(1,691
)
(6,318
)
(5,190
)
Net income before income taxes
25,122
23,140
58,776
58,074
Current income tax (recovery) expense
2,072
(231
)
7,090
140
Deferred income tax expense
3,344
4,134
1,063
8,479
Total income tax expense
5,416
3,903
8,153
8,619
Net income
$
19,706
$
19,237
$
50,623
$
49,455
Net income (loss) attributable to:
Shareholders of the Company
$
19,731
$
19,231
$
50,685
$
49,472
Non-controlling interest
(25
)
6
(62
)
(17
)
Income per share
Basic
$
0.51
$
0.48
$
1.29
$
1.22
Diluted
$
0.50
$
0.47
$
1.26
$
1.20
Consolidated Statements of Comprehensive Income
Three months ended September 30
Nine months ended September 30
2024
2023
2024
2023
Net income
$
19,706
$
19,237
$
50,623
$
49,455
Foreign currency translation
(31
)
(1,734
)
7,271
(7,034
)
Total other comprehensive income (loss) for the period
(31
)
(1,734
)
7,271
(7,034
)
Total comprehensive income
$
19,675
$
17,503
$
57,894
$
42,421
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
19,700
$
17,497
$
57,956
$
42,438
Non-controlling interest
(25
)
6
(62
)
(17
)
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
Three months ended September 30
Nine months ended September 30
2024
2023
2024
2023
Cash provided by (used in):
Operations:
Net income for the period
$
19,706
$
19,237
$
50,623
$
49,455
Add (deduct) items not affecting cash:
Depreciation
23,091
20,124
66,186
60,421
Share-based compensation
518
701
1,940
1,457
Gain on sale of property, plant and equipment
(144
)
(1,140
)
(1,144
)
(2,152
)
Finance costs, net
2,330
1,691
6,318
5,190
Foreign currency translation
(999
)
(3,934
)
(336
)
(4,284
)
Current income tax (recovery) expense
2,072
(231
)
7,090
140
Deferred income tax expense
3,344
4,134
1,063
8,479
Income taxes paid
(1,827
)
202
(12,718
)
158
Cashflow
48,091
40,784
119,022
118,864
Changes in non-cash working capital items:
Accounts receivable
(1,109
)
(13,516
)
(9,689
)
(8,396
)
Inventory
3,527
10,194
(18,180
)
(9,850
)
Prepaid expenses and deposits
(2,637
)
(5,353
)
(28
)
(5,207
)
Accounts payable and accrued liabilities
9,029
(8,066
)
21,896
10,480
Deferred revenue
3,452
(2,104
)
14,156
(10,309
)
Cash provided by operating activities
60,353
21,939
127,177
95,582
Investing:
Purchase of property, plant and equipment
(14,700
)
(17,177
)
(65,038
)
(59,631
)
Cash paid on acquisition
–
–
(47,350
)
–
Proceeds on disposal of property, plant and equipment
156
4,906
1,705
6,410
Changes in non-cash working capital items
(441
)
(12
)
3,260
2,492
Cash used in investing activities
(14,985
)
(12,283
)
(107,423
)
(50,729
)
Financing:
Advances of long-term debt
5,000
–
65,000
–
Repayment of long-term debt
(513
)
(498
)
(21,534
)
(16,491
)
Repayment of lease liabilities
(1,742
)
(1,558
)
(5,134
)
(4,714
)
Dividends to shareholders
(3,496
)
(3,212
)
(10,290
)
(8,944
)
Repurchase of common shares
(5,183
)
(2,298
)
(17,853
)
(13,587
)
Shares issued on exercise of stock options
–
42
64
42
Partnership distributions
–
–
(200
)
–
Interest paid
(2,319
)
(2,113
)
(15,863
)
(5,335
)
Cash used in financing activities
(8,253
)
(9,637
)
(5,810
)
(49,029
)
Change in cash and cash equivalents
37,115
19
13,944
(4,176
)
Cash and cash equivalents, beginning of period
24,764
29,866
47,935
34,061
Cash and cash equivalents, end of period
$
61,879
$
29,885
$
61,879
$
29,885
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.
As at and for the three months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
86,634
$
19,437
$
110,567
$
25,302
$
–
$
241,940
Cost of services
63,727
9,165
86,723
18,915
–
178,530
Selling, general and administration
2,358
2,144
4,587
1,444
2,804
13,337
Other income
–
–
–
–
(844
)
(844
)
Share-based compensation
–
–
–
–
518
518
Depreciation
12,287
5,145
2,788
2,446
425
23,091
Operating income (loss)
8,262
2,983
16,469
2,497
(2,903
)
27,308
Gain (loss) on sale of property, plant and equipment
14
51
79
–
–
144
Finance costs, net
(17
)
(43
)
(109
)
(19
)
(2,142
)
(2,330
)
Net income (loss) before income taxes
8,259
2,991
16,439
2,478
(5,045
)
25,122
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
434,030
163,853
284,919
76,899
4,042
963,743
Total liabilities
84,042
26,558
111,634
6,473
173,825
402,532
Capital expenditures
9,184
2,269
1,076
2,171
–
14,700
Canada
United States
Australia
International
Total
Revenue
$
117,704
$
82,514
$
41,722
$
–
$
241,940
Non-current assets (2)
364,318
131,534
125,330
–
621,182
As at and for the three months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
75,815
$
21,137
$
110,959
$
24,105
$
–
$
232,016
Cost of services
51,265
11,828
94,122
18,020
–
175,235
Selling, general and administration
2,581
2,240
3,327
1,208
2,671
12,027
Other (income) expense
308
7
(131
)
–
54
238
Share-based compensation
–
–
–
–
701
701
Depreciation
9,580
4,903
2,585
2,802
254
20,124
Operating income (loss)
12,081
2,159
11,056
2,075
(3,680
)
23,691
Gain on sale of property, plant and equipment
9
201
763
167
–
1,140
Finance costs, net
(14
)
(28
)
(121
)
(18
)
(1,510
)
(1,691
)
Net income (loss) before income taxes
12,076
2,332
11,698
2,224
(5,190
)
23,140
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
367,553
176,330
275,886
74,376
180
894,325
Total liabilities
72,824
28,851
110,391
6,980
132,751
351,797
Capital expenditures
9,094
1,643
4,268
1,937
235
17,177
Canada
United States
Australia
International
Total
Revenue
$
111,945
$
99,790
$
20,281
$
–
$
232,016
Non-current assets (2)
393,168
129,263
46,240
–
568,671
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the nine months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)
As at and for the nine months ended
Contract
Rentals and
Compression
Well
Corporate
Total
September 30, 2024
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
235,734
$
59,614
$
297,547
$
67,065
$
–
$
659,960
Cost of services
171,011
29,933
238,453
51,695
–
491,092
Selling, general and administration
7,424
6,567
11,508
4,002
8,011
37,512
Other expense
–
–
–
–
(720
)
(720
)
Share-based compensation
–
–
–
–
1,940
1,940
Depreciation
34,669
15,228
7,999
7,269
1,021
66,186
Operating income (loss)
22,630
7,886
39,587
4,099
(10,252
)
63,950
Gain (loss) on sale of property, plant and equipment
115
844
209
(24
)
–
1,144
Finance costs, net
(55
)
(130
)
(321
)
(64
)
(5,748
)
(6,318
)
Net income (loss) before income taxes
22,690
8,600
39,475
4,011
(16,000
)
58,776
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
434,030
163,853
284,919
76,899
4,042
963,743
Total liabilities
84,042
26,558
111,634
6,473
173,825
402,532
Capital expenditures
30,762
7,442
15,263
11,571
–
65,038
Canada
United States
Australia
International
Total
Revenue
$
294,720
$
260,102
$
102,184
$
2,954
$
659,960
Non-current assets (2)
364,318
131,534
125,330
–
621,182
As at and for the nine months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)
As at and for the nine months ended
Contract
Rentals and
Compression
Well
Corporate
Total
September 30, 2023
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
212,633
$
65,362
$
322,207
$
78,436
$
–
$
678,638
Cost of services
153,466
35,725
273,607
59,472
–
522,270
Selling, general and administration
7,552
6,374
10,122
3,124
6,414
33,586
Other (income) expense
20
–
(88
)
–
(140
)
(208
)
Share-based compensation
–
–
–
–
1,457
1,457
Depreciation
28,107
14,620
7,822
9,091
781
60,421
Operating income (loss)
23,488
8,643
30,744
6,749
(8,512
)
61,112
Gain on sale of property, plant and equipment
235
714
836
337
30
2,152
Finance costs, net
(44
)
(63
)
(353
)
(51
)
(4,679
)
(5,190
)
Net income (loss) before income taxes
23,679
9,294
31,227
7,035
(13,161
)
58,074
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
367,553
176,330
275,886
74,376
180
894,325
Total liabilities
72,824
28,851
110,391
6,980
132,751
351,797
Capital expenditures
40,528
5,777
6,783
6,308
235
59,631
Canada
United States
Australia
International
Total
Revenue
$
303,329
$
303,617
$
71,692
$
–
$
678,638
Non-current assets (2)
393,168
129,263
46,240
–
568,671
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
Notes to the Financial Highlights
(1) EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations.
(2) Working capital equals current assets minus current liabilities.
(3) Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.
(4) Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 to the Company’s Condensed Interim Consolidated Financial Statements.
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. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, Oct. 17, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (TSX:TOT) (“Total Energy” or the “Company”) announced today that it has filed a Notice with the Toronto Stock Exchange (the “TSX”) to undertake a normal course issuer bid that will begin on October 21, 2024 and expire on October 20, 2025. Total Energy has been informed that the TSX has accepted its notice to make the normal course issuer bid. All purchases of common shares (the “Shares”) will be effected through the facilities of the TSX and one or more of the Canadian alternative trading systems and all Shares purchased will be cancelled by the Company.
As of today, there are 38,194,658 Shares issued and outstanding. In connection with the normal course issuer bid commencing on October 21, 2024, Total Energy may purchase up to 1,909,732 Shares, being 5% of the total number of outstanding Shares on October 16, 2024, during the period from October 21, 2024 to October 20, 2025, subject to a maximum daily purchase limit of 7,620 Shares based on an average daily trading volume for the last six calendar months of 30,482 Shares.
On October 17, 2023, Total Energy announced its intention to undertake a normal course issuer bid, which remained in effect during the 12-month period ending on October 18, 2024. Under that normal course issuer bid Total Energy purchased a total of 1,998,750 Shares at an average price of $9.58 per Share, which was the maximum number of Shares permitted to be purchased by Total Energy under such normal course issuer bid.
Capital stewardship remains a core value at Total Energy. Since its inception, Total Energy has returned approximately $323 million to its owners through dividends, distributions and share buybacks, including $6.24 per share in dividends and distributions. In the context of current market conditions, Total Energy believes that the repurchase of Shares is an attractive investment opportunity that will benefit the remaining shareholders of Total Energy by increasing their proportionate equity investment in the Company.
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol “TOT”.
CALGARY, Alberta, Oct. 07, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) will conduct a conference call and webcast following the release of its financial results for the three months ended September 30, 2024. The financial results will be released prior to the conference call. Daniel Halyk, President and CEO will host the call.
Open to:
Shareholders and other interested persons
Date:
November 7, 2024
Time:
9:00 a.m. (Mountain Time)
Call:
(844) 763-8274 or (647) 484-8814
A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”.
Shortly after the live webcast, an archived version will be available on Total Energy’s website. A recording of the conference call will also be available until December 7, 2024, by dialing (855) 669-9658, passcode 1362549.
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol “TOT”.
For further information, please contact Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, Aug. 30, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) announces that its Board of Directors has declared a quarterly dividend of $0.09 (Cdn.) per common share for the quarter ending September 30, 2024 on Total Energy’s outstanding common shares. The dividend is payable on October 15, 2024, to shareholders of record at the close of business on September 30, 2024.
Unless otherwise indicated, all dividends paid by Total Energy are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Yuliya Gorbach, Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, Aug. 08, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and six months ended June 30, 2024.
Financial Highlights
($000’s except per share data)
Three months ended June 30
Six months ended June 30
2024
2023
Change
2024
2023
Change
Revenue
$
213,334
$
208,845
2%
$
418,020
$
446,622
(6%)
Operating income
14,612
9,401
55%
36,642
37,421
(2%)
EBITDA (1)
37,447
30,255
24%
80,737
78,730
3%
Cashflow
38,094
29,408
30%
70,931
78,080
(9%)
Net income
15,454
6,180
150%
30,917
30,218
2%
Attributable to shareholders
15,472
6,201
150%
30,954
30,241
2%
Per Share Data (Diluted)
EBITDA (1)
$
0.93
$
0.74
26%
$
2.00
$
1.89
6%
Cashflow
$
0.95
$
0.72
32%
$
1.75
$
1.88
(7%)
Attributable to shareholders:
Net income
$
0.39
$
0.15
160%
$
0.77
$
0.73
5%
Common shares (000’s)(4)
Basic
39,329
40,325
(2%)
39,740
40,821
(3%)
Diluted
40,060
41,048
(2%)
40,453
41,568
(3%)
June 30
December 31
Financial Position at
2024
2023
Change
Total Assets
$
936,356
$
861,658
9%
Long-Term Debt and Lease Liabilities (excluding current portion)
100,983
100,834
–
Working Capital (2)
71,816
123,439
(42%)
Net Debt (3)
29,167
–
nm
Shareholders’ Equity
549,999
530,758
4%
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
nm – calculation not meaningful
Total Energy’s results for the three months ended June 30, 2024 represent record second quarter financial results. Relatively stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment more than offset a year over year decline in drilling and completion activity in the United States.
Contract Drilling Services (“CDS”)
Three months ended June 30
Six months ended June 30
2024
2023
Change
2024
2023
Change
Revenue
$
67,889
$
54,282
25%
$
149,100
$
136,818
9%
EBITDA (1)
$
14,505
$
9,891
47%
$
36,851
$
30,160
22%
EBITDA (1) as a % of revenue
21%
18%
17%
25%
22%
14%
Operating days(2)
2,075
1,974
5%
4,851
4,843
–
Canada
1,082
1,094
(1%)
3,093
3,014
3%
United States
346
571
(39%)
705
1,161
(39%)
Australia
647
309
109%
1,053
668
58%
Revenue per operating day(2), dollars
$
32,718
$
27,498
19%
$
30,736
$
28,251
9%
Canada
25,563
25,396
1%
26,805
26,431
1%
United States
28,905
27,319
6%
28,909
28,227
2%
Australia
46,722
35,275
32%
43,506
36,500
19%
Utilization
22%
23%
(4%)
26%
29%
(10%)
Canada
15%
16%
(6%)
22%
22%
–
United States
32%
52%
(38%)
32%
51%
(37%)
Australia
44%
68%
(35%)
48%
74%
(35%)
Rigs, average for period
105
94
12%
101
94
7%
Canada
77
76
1%
77
76
1%
United States
12
12
–
12
13
(8%)
Australia
16
5
220%
12
5
140%
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Operating days includes drilling and paid standby days.
Canadian drilling activity during the second quarter of 2024 was consistent with 2023. The decline in United States drilling activity that began in the third quarter of 2023 continued into the second quarter of 2024. In Australia, Saxon contributed $19.2 million of revenue during the second quarter of 2024. The substantial year over year increase in second quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.
Rentals and Transportation Services (“RTS”)
Three months ended June 30
Six months ended June 30
2024
2023
Change
2024
2023
Change
Revenue
$
17,798
$
19,812
(10%)
$
40,177
$
44,225
(9%)
EBITDA (1)
$
6,064
$
7,064
(14%)
$
15,779
$
16,714
(6%)
EBITDA (1) as a % of revenue
34%
36%
(6%)
39%
38%
3%
Revenue per utilized piece of equipment, dollars
$
16,257
$
15,428
5%
$
28,543
$
22,291
28%
Pieces of rental equipment
7,940
7,667
4%
7,940
7,667
4%
Canada
7,030
6,779
4%
7,030
6,779
4%
United States
910
888
2%
910
888
2%
Rental equipment utilization
14%
15%
(7%)
18%
21%
(14%)
Canada
12%
14%
(14%)
15%
18%
(17%)
United States
32%
34%
(6%)
35%
40%
(13%)
Heavy trucks
66
69
(4%)
66
69
(4%)
Canada
45
48
(6%)
45
48
(6%)
United States
21
21
–
21
21
–
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Second quarter revenue in the RTS segment decreased as compared to 2023 due to lower industry activity in the United States. The year-over-year decline in second-quarter EBITDA and EBITDA margin was a result of lower equipment utilization given this segment’s relatively high fixed cost structure. Partially offsetting the impact of lower equipment utilization on revenue and EBITDA was a modest increase in revenue per utilized piece of equipment.
Compression and Process Services (“CPS”)
Three months ended June 30
Six months ended June 30
2024
2023
Change
2024
2023
Change
Revenue
$
109,454
$
113,130
(3%)
$
186,980
$
211,248
(11%)
EBITDA (1)
$
17,559
$
12,399
42%
$
28,459
$
24,998
14%
EBITDA (1) as a % of revenue
16%
11%
45%
15%
12%
25%
Horsepower of equipment on rent at period end
54,476
41,842
30%
54,476
41,842
30%
Canada
16,156
19,202
(16%)
16,156
19,202
(16%)
United States
38,320
22,640
69%
38,320
22,640
69%
Rental equipment utilization during the period (HP)(2)
80%
78%
3%
77%
78%
(1%)
Canada
70%
84%
(17%)
69%
78%
(12%)
United States
84%
73%
15%
80%
77%
4%
Sales backlog at period end, $ million
$
204.6
$
185.6
10%
$
204.6
$
185.6
10%
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2) Rental equipment utilization is measured on a horsepower basis.
The year-over-year decrease in the CPS segment’s second quarter revenue was due primarily to lower fabrication sales resulting from a shift in customer preference towards renting compression units in the United States. The resulting increase in horsepower on rent contributed to improved second quarter EBITDA and EBITDA margins for 2024 as compared to 2023. The fabrication sales backlog strengthened during the second quarter of 2024, increasing by $18.9 million from the $185.7 million sales backlog at March 31, 2024.
Well Servicing (“WS”)
Three months ended June 30
Six months ended June 30
2024
2023
Change
2024
2023
Change
Revenue
$
18,193
$
21,621
(16%)
$
41,763
$
54,331
(23%)
EBITDA (1)
$
2,087
$
2,854
(27%)
$
6,401
$
11,133
(43%)
EBITDA (1) as a % of revenue
11%
13%
(15%)
15%
20%
(25%)
Service hours(2)
18,063
22,630
(20%)
42,627
55,876
(24%)
Canada
8,410
9,357
(10%)
23,817
26,848
(11%)
United States
3,115
5,767
(46%)
6,630
12,411
(47%)
Australia
6,538
7,506
(13%)
12,180
16,617
(27%)
Revenue per service hour(2), dollars
$
1,007
$
955
5%
$
980
$
972
1%
Canada
945
941
–
963
969
(1%)
United States
937
993
(6%)
891
998
(11%)
Australia
1,121
945
19%
1,060
959
11%
Utilization(3)
20%
25%
(20%)
25%
32%
(22%)
Canada
17%
18%
(6%)
24%
26%
(8%)
United States
29%
58%
(50%)
30%
62%
(52%)
Australia
25%
29%
(14%)
23%
32%
(28%)
Rigs, average for period
79
79
–
79
79
–
Canada
55
56
(2%)
55
56
(2%)
United States
12
11
9%
12
11
9%
Australia
12
12
–
12
12
–
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby. (3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.
Second quarter WS segment revenue and EBITDA decreased as compared to 2024 due to lower activity in all jurisdictions. Canadian activity was negatively impacted by lower well abandonment activity. Activity levels in the United States were significantly lower due to reduced industry activity levels, due in part to significant customer consolidation. Field activity in Australia was somewhat restricted during the second quarter of 2024 due to periods of wet weather although price increases following certain rig upgrades mitigated the impact of lower service hours on revenue.
Corporate
During the second quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. $20.7 million of capital expenditures were made during the second quarter of 2024.
Total Energy exited the second quarter of 2024 with $71.8 million of positive working capital, including $24.8 million of cash, and $85 million of available credit under its $175 million of revolving bank credit facilities. Included in working capital at June 30, 2024 is a $42.0 million mortgage loan that became current debt as it matures in April of 2025. Total Energy expects to repay this debt (which bears interest at a fixed rate of 3.10%) at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at June 30, 2024 was 5.62%.
Outlook
Industry conditions remain stable. While North American natural gas spot market price weakness has negatively impacted North American gas drilling activity, particularly in the United States, relatively strong oil prices and the pending completion of several LNG export facilities have provided tailwinds for the North American energy services industry, particularly in Canada.
The significant investment in Total Energy’s Australian business, including the acquisition of Saxon in March, began to pay dividends in the second quarter of 2024. Synergies arising from the ongoing integration of Saxon with Savanna Australia and the completion of several capital projects during the third quarter of 2024 will see this momentum continue. In late July, a Saxon drilling rig was reactivated and in early August a service rig returned to service following its recertification and upgrade. Both rigs are operating under long term contracts. In addition, a newly constructed drilling rig is scheduled to commence operations by September under a long term contract.
Despite weak near term North American natural gas prices, demand for compression and processing equipment remains steady, driven by continued infrastructure investment to support expansion of North American LNG export capacity. The Company’s significant investment in growing the CPS segment’s compression rental fleet during the first half of 2024 was reflected in that segment’s second quarter results. This investment will continue to benefit the CPS segment going forward as it was supported by long term contracts.
Conference Call
At 9:00 a.m. (Mountain Time) on August 9, 2024 Total Energy will conduct a conference call and webcast to discuss its second quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (844) 763-8274 or (647) 484-8814. 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 September 9, 2024 by dialing (855) 669-9658 (passcode 7163493).
Selected Financial Information
Selected financial information relating to the three and six months ended June 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
June 30
December 31
2024
2023
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
24,764
$
47,935
Accounts receivable
146,184
137,604
Inventory
119,886
98,179
Prepaid expenses and deposits
14,126
16,735
304,960
300,453
Property, plant and equipment
624,058
557,152
Deferred income tax asset
3,285
–
Goodwill
4,053
4,053
$
936,356
$
861,658
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
124,314
$
116,794
Deferred revenue
50,025
39,321
Contingent consideration on business acquisition
2,738
–
Income taxes payable
3,898
9,771
Dividends payable
3,496
3,198
Current portion of lease liabilities
6,697
5,880
Current portion of long-term debt
41,976
2,050
233,144
177,014
Long-term debt
90,000
90,947
Lease liabilities
10,983
9,887
Deferred income tax liability
52,230
53,052
Shareholders’ equity:
Share capital
244,223
251,283
Contributed surplus
4,755
4,805
Accumulated other comprehensive loss
(18,204)
(25,506)
Non-controlling interest
284
521
Retained earnings
318,941
299,655
549,999
530,758
$
936,356
$
861,658
Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)
Three months ended June 30
Six months ended June 30
2024
2023
2024
2023
Revenue
$
213,334
$
208,845
$
418,020
$
446,622
Cost of services
164,333
169,049
312,562
347,035
Selling, general and administration
11,441
10,126
24,175
21,559
Other (income) expense
(196)
(440)
124
(446)
Share-based compensation
713
367
1,422
756
Depreciation
22,431
20,342
43,095
40,297
Operating income
14,612
9,401
36,642
37,421
Gain on sale of property, plant and equipment
404
512
1,000
1,012
Finance costs, net
(2,156)
(1,796)
(3,988)
(3,499)
Net income before income taxes
12,860
8,117
33,654
34,934
Current income tax expense
1,046
47
5,018
371
Deferred income tax (recovery) expense
(3,640)
1,890
(2,281)
4,345
Total income tax (recovery) expense
(2,594)
1,937
2,737
4,716
Net income
$
15,454
$
6,180
$
30,917
$
30,218
Net income (loss) attributable to:
Shareholders of the Company
$
15,472
$
6,201
$
30,954
$
30,241
Non-controlling interest
(18)
(21)
(37)
(23)
Income per share
Basic
$
0.39
$
0.15
$
0.78
$
0.74
Diluted
$
0.39
$
0.15
$
0.77
$
0.73
Consolidated Statements of Comprehensive Income
Three months ended June 30
Six months ended June 30
2024
2023
2024
2023
Net income
$
15,454
$
6,180
$
30,917
$
30,218
Foreign currency translation
5,667
(4,682)
7,302
(5,300)
Total other comprehensive income (loss) for the period
5,667
(4,682)
7,302
(5,300)
Total comprehensive income
$
21,121
$
1,498
$
38,219
$
24,918
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
21,139
$
1,519
$
38,256
$
24,941
Non-controlling interest
(18)
(21)
(37)
(23)
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
Three months ended June 30
Six months ended June 30
2024
2023
2024
2023
Cash provided by (used in):
Operations:
Net income for the period
$
15,454
$
6,180
$
30,917
$
30,218
Add (deduct) items not affecting cash:
Depreciation
22,431
20,342
43,095
40,297
Share-based compensation
713
367
1,422
756
Gain on sale of property, plant and equipment
(404)
(512)
(1,000)
(1,012)
Finance costs, net
2,156
1,796
3,988
3,499
Foreign currency translation
933
(702)
663
(350)
Current income tax expense
1,046
47
5,018
371
Deferred income tax (recovery) expense
(3,640)
1,890
(2,281)
4,345
Income taxes paid
(595)
–
(10,891)
(44)
Cashflow
38,094
29,408
70,931
78,080
Changes in non-cash working capital items:
Accounts receivable
(18)
22,124
(8,580)
5,120
Inventory
(6,960)
(9,241)
(21,707)
(20,044)
Prepaid expenses and deposits
(1,103)
(491)
2,609
146
Accounts payable and accrued liabilities
(4,465)
14,534
12,867
18,546
Deferred revenue
3,639
(12,432)
10,704
(8,205)
Cash provided by operating activities
29,187
43,902
66,824
73,643
Investing:
Purchase of property, plant and equipment
(20,703)
(12,665)
(50,338)
(42,454)
Cash paid on acquisition
–
–
(47,350)
–
Proceeds on disposal of property, plant and equipment
922
741
1,549
1,504
Changes in non-cash working capital items
(305)
(10,229)
3,701
2,504
Cash used in investing activities
(20,086)
(22,153)
(92,438)
(38,446)
Financing:
Advancements of long-term debt
–
–
60,000
–
Repayment of long-term debt
(10,513)
(10,496)
(21,021)
(15,993)
Repayment of lease liabilities
(1,763)
(1,539)
(3,392)
(3,156)
Dividends to shareholders
(3,596)
(3,242)
(6,794)
(5,732)
Repurchase of common shares
(11,946)
(3,275)
(12,670)
(11,289)
Shares issued on exercise of stock options
64
–
64
–
Partnership distributions
–
–
(200)
–
Interest paid
(1,622)
(1,559)
(13,544)
(3,222)
Cash (used in) from financing activities
(29,376)
(20,111)
2,443
(39,392)
Change in cash and cash equivalents
(20,275)
1,638
(23,171)
(4,195)
Cash and cash equivalents, beginning of period
45,039
28,228
47,935
34,061
Cash and cash equivalents, end of period
$
24,764
$
29,866
$
24,764
$
29,866
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.
As at and for the three months ended June 30, 2024 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
67,889
$
17,798
$
109,454
$
18,193
$
–
$
213,334
Cost of services
51,392
9,853
88,179
14,909
–
164,333
Selling, general and administration
2,060
2,162
3,795
1,173
2,251
11,441
Other income
–
–
–
–
(196)
(196)
Share-based compensation
–
–
–
–
713
713
Depreciation
12,039
5,019
2,622
2,424
327
22,431
Operating income (loss)
2,398
764
14,858
(313)
(3,095)
14,612
Gain (loss) on sale of property, plant and equipment
68
281
79
(24)
–
404
Finance costs, net
(16)
(46)
(110)
(22)
(1,962)
(2,156)
Net income (loss) before income taxes
2,450
999
14,827
(359)
(5,057)
12,860
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
424,342
163,914
276,447
70,130
1,523
936,356
Total liabilities
78,649
29,854
106,665
6,063
165,126
386,357
Capital expenditures
8,777
2,388
3,732
5,806
–
20,703
Canada
United States
Australia
Total
Revenue
$
76,906
$
98,471
$
37,957
$
213,334
Non-current assets (2)
368,701
137,395
122,015
628,111
As at and for the three months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
54,282
$
19,812
$
113,130
$
21,621
$
–
$
208,845
Cost of services
42,783
10,994
97,513
17,759
–
169,049
Selling, general and administration
1,986
2,076
3,218
1,072
1,774
10,126
Other (income) expense
(288)
(7)
43
–
(188)
(440)
Share-based compensation
–
–
–
–
367
367
Depreciation
9,479
4,845
2,614
3,142
262
20,342
Operating income (loss)
322
1,904
9,742
(352)
(2,215)
9,401
Gain on sale of property, plant and equipment
90
315
43
64
–
512
Finance costs, net
(15)
(17)
(111)
(17)
(1,636)
(1,796)
Net income (loss) before income taxes
397
2,202
9,674
(305)
(3,851)
8,117
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
354,433
177,972
278,289
75,584
1,839
888,117
Total liabilities
65,250
27,464
132,616
6,196
126,637
358,163
Capital expenditures
7,614
2,596
542
1,913
–
12,665
Canada
United States
Australia
Total
Revenue
$
83,257
$
98,820
$
26,768
$
208,845
Non-current assets (2)
395,421
128,222
47,394
571,037
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2)Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the six months ended June 30, 2024 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
149,100
$
40,177
$
186,980
$
41,763
$
–
$
418,020
Cost of services
107,284
20,768
151,730
32,780
–
312,562
Selling, general and administration
5,066
4,423
6,921
2,558
5,207
24,175
Other expense
–
–
–
–
124
124
Share-based compensation
–
–
–
–
1,422
1,422
Depreciation
22,382
10,083
5,211
4,823
596
43,095
Operating income (loss)
14,368
4,903
23,118
1,602
(7,349)
36,642
Gain (loss) on sale of property, plant and equipment
101
793
130
(24)
–
1,000
Finance costs, net
(38)
(87)
(212)
(45)
(3,606)
(3,988)
Net income (loss) before income taxes
14,431
5,609
23,036
1,533
(10,955)
33,654
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
424,342
163,914
276,447
70,130
1,523
936,356
Total liabilities
78,649
29,854
106,665
6,063
165,126
386,357
Capital expenditures
21,578
5,173
14,187
9,400
–
50,338
Canada
United States
Australia
Total
Revenue
$
179,970
$
177,588
$
60,462
$
418,020
Non-current assets (2)
368,701
137,395
122,015
628,111
As at and for the six months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
136,818
$
44,225
$
211,248
$
54,331
$
–
$
446,622
Cost of services
102,201
23,897
179,485
41,452
–
347,035
Selling, general and administration
4,971
4,134
6,795
1,916
3,743
21,559
Other (income) expense
(288)
(7)
43
–
(194)
(446)
Share-based compensation
–
–
–
–
756
756
Depreciation
18,527
9,717
5,237
6,289
527
40,297
Operating income (loss)
11,407
6,484
19,688
4,674
(4,832)
37,421
Gain on sale of property, plant and equipment
226
513
73
170
30
1,012
Finance costs, net
(30)
(35)
(232)
(33)
(3,169)
(3,499)
Net income (loss) before income taxes
11,603
6,962
19,529
4,811
(7,971)
34,934
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
354,433
177,972
278,289
75,584
1,839
888,117
Total liabilities
65,250
27,464
132,616
6,196
126,637
358,163
Capital expenditures
31,434
4,134
2,515
4,371
–
42,454
Canada
United States
Australia
Total
Revenue
$
191,384
$
203,827
$
51,411
$
446,622
Non-current assets (2)
395,421
128,222
47,394
571,037
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca
Notes to the Financial Highlights
(1)
EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations.
(2)
Working capital equals current assets minus current liabilities.
(3)
Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.
(4)
Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 to the Company’s Condensed Interim Consolidated Financial Statements.
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. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, June 03, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) announced on May 31, 2024 that its Board of Directors had declared a quarterly dividend of $0.09 (Cdn.) per common share for the quarter ending June 30, 2024 on Total Energy’s outstanding common shares. The dividend remains payable on July 15, 2024, to shareholders of record at the close of business on June 28, 2024. Total Energy is correcting the ex-dividend date to June 28, 2024.
Unless otherwise indicated, all dividends paid by Total Energy are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Yuliya Gorbach, Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
The TSX has neither approved nor disapproved of the information contained herein.
CALGARY, Alberta, May 31, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) announces that its Board of Directors has declared a quarterly dividend of $0.09 (Cdn.) per common share for the quarter ending June 30, 2024 on Total Energy’s outstanding common shares. The dividend is payable on July 15, 2024, to shareholders of record at the close of business on June 28, 2024. The ex-dividend date is June 27, 2024.
Unless otherwise indicated, all dividends paid by Total Energy are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Headquartered in Calgary, Alberta, Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
CALGARY, Alberta, May 14, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces that the following matters were voted upon at the Company’s annual meeting of Shareholders on May 14, 2024 (the “Meeting”). A total of 27,868,857 common shares, representing 69.7% of Total Energy’s issued and outstanding shares as at the Record Date for the Meeting, were represented in person or by proxy at the Meeting.
Matter Voted Upon
Outcome of Vote
Votes For
Votes Withheld
1.
The election of the following nominees as directors
of the Company for the ensuing year or until their
successors are elected or appointed:
George Chow
Passed
27,089,792
(99.4%)
157,715
(0.6%)
Glenn Dagenais
Passed
27,031,573
(99.2%)
215,934
(0.8%)
Daniel Halyk
Passed
27,089,692
(99.4%)
157,815
(0.6%)
Jessica Kirstine
Passed
27,035,448
(99.2%)
212,059
(0.8%)
Greg Melchin
Passed
26,056,613
(95.6%)
1,190,894
(4.4%)
Ken Mullen
Passed
25,137,057
(92.3%)
2,110,450
(7.7%)
2.
The appointment of MNP LLP as auditors
of the Company to hold office until the close
of the next annual meeting of shareholders.
Passed
27,816,689
(99.8%)
52,168
(0.2%)
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and services to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Jeremy Busch-Howell, Vice-President, Legal, General Counsel and Corporate Secretary at (403) 216-3939 or by e-mail at: investorrelations@totalenergy.ca or visit our website at: www.totalenergy.ca.
CALGARY, Alberta, May 09, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months ended March 31, 2024.
Financial Highlights
($000’s except per share data)
Three months ended March 31
2024
2023
Change
Revenue
$
204,686
$
237,777
(14
%)
Operating income
22,030
28,020
(21
%)
EBITDA (1)
43,290
48,475
(11
%)
Cashflow
32,837
48,672
(33
%)
Net income
15,463
24,038
(36
%)
Attributable to shareholders
15,482
24,040
(36
%)
Per Share Data (Diluted)
EBITDA (1)
$
1.06
$
1.15
(8
%)
Cashflow
$
0.80
$
1.16
(31
%)
Attributable to shareholders:
Net income
$
0.38
$
0.57
(33
%)
Common shares (000’s)(4)
Basic
39,971
41,322
(3
%)
Diluted
40,796
42,048
(3
%)
March 31
December 31
Financial Position at
2024
2023
Change
Total Assets
$
941,690
$
861,658
9
%
Long-Term Debt and Lease Liabilities (excluding current portion)
149,847
100,834
49
%
Working Capital (2)
124,398
123,439
1
%
Net Debt (3)
25,449
–
nm
Shareholders’ Equity
543,967
530,758
2
%
Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
nm – calculation not meaningful
Total Energy’s results for the first quarter of 2024 reflect relatively stable industry conditions in Canada and Australia and lower drilling activity levels in the United States. Extended wet weather conditions in Australia negatively impacted field activity levels. Included in results for the first quarter of 2024 is the contribution from Saxon Energy Services Australia Pty Ltd. (“Saxon”) from March 7, 2024 when the acquisition of Saxon was completed. Cashflow for the first quarter of 2024 was negatively impacted by the payment of $9.1 million of income taxes following the reassessment of certain Canadian income tax filings related to the Company’s conversion from an income trust in 2009. An additional $10.6 million of interest and penalties related to such reassessment was also paid during the first quarter of 2024.
Contract Drilling Services (“CDS”)
Three months ended March 31
2024
2023
Change
Revenue
$
81,211
$
82,536
(2
%)
EBITDA (1)
$
22,346
$
20,269
10
%
EBITDA (1) as a % of revenue
28
%
25
%
12
%
Operating days(2)
2,776
2,869
(3
%)
Canada
2,011
1,920
5
%
United States
359
590
(39
%)
Australia
406
359
13
%
Revenue per operating day(2), dollars
$
29,255
$
28,768
2
%
Canada
27,473
27,021
2
%
United States
28,914
29,107
(1
%)
Australia
38,382
37,554
2
%
Utilization
31
%
34
%
(9
%)
Canada
29
%
28
%
4
%
United States
33
%
50
%
(34
%)
Australia
56
%
80
%
(30
%)
Rigs, average for period
97
94
3
%
Canada
77
76
1
%
United States
12
13
(8
%)
Australia
8
5
60
%
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Operating days includes drilling and paid standby days.
The moderation of North American industry drilling activity that began in the third quarter of 2023 continued into the first quarter of 2024, particularly in the United States. Market share gains resulting from rig upgrades mitigated the decline in Canada. United States activity was also negatively impacted by the relocation of one triple rig to Canada in the second quarter of 2023. Saxon contributed $4.9 million of revenue and $0.1 million of operating income to the Australian contract drilling services segment in the first quarter of 2024. Offsetting the Saxon contribution were reduced field activity levels due to extended wet weather conditions and the depreciation of the Australian dollar relative to the Canadian dollar during first quarter of 2024 as compared to the first quarter of 2023.
Rentals and Transportation Services (“RTS”)
Three months ended March 31
2024
2023
Change
Revenue
$
22,379
$
24,413
(8
%)
EBITDA (1)
$
9,715
$
9,650
1
%
EBITDA (1) as a % of revenue
43
%
40
%
8
%
Revenue per utilized piece of equipment, dollars
$
13,840
$
13,600
2
%
Pieces of rental equipment
7,700
9,455
(19
%)
Canada
6,790
8,555
(21
%)
United States
910
900
1
%
Rental equipment utilization
21
%
19
%
11
%
Canada
18
%
16
%
13
%
United States
38
%
46
%
(17
%)
Heavy trucks
67
70
(4
%)
Canada
46
48
(4
%)
United States
21
22
(5
%)
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
First quarter revenue in the RTS segment decreased as compared to the same period in 2023 due to lower industry activity, particularly in the United States. The higher year over year first quarter EBITDA and EBITDA margin was due to lower equipment mobilization costs in Canada, modestly higher revenue per utilized piece of equipment and the mix of equipment operating.
Compression and Process Services (“CPS”)
Three months ended March 31
2024
2023
Change
Revenue
$
77,526
$
98,118
(21
%)
EBITDA (1)
$
10,900
$
12,599
(13
%)
EBITDA (1) as a % of revenue
14
%
13
%
8
%
Horsepower of equipment on rent at period end
48,376
44,719
8
%
Canada
13,856
19,209
(28
%)
United States
34,520
25,510
35
%
Rental equipment utilization during the period (HP)(2)
73
%
78
%
(6
%)
Canada
69
%
74
%
(7
%)
United States
76
%
81
%
(6
%)
Sales backlog at period end, $ million
$
185.7
$
227.4
(18
%)
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2) Rental equipment utilization is measured on a horsepower basis.
The year over year decrease in the CPS segment’s first quarter revenue was due to lower fabrication sales and the negative impact of low natural gas prices on parts and service activity. The decrease in fabrication sales was primarily due to a significant portion of fabrication activity being directed towards the construction of new compression rental units in response to customer demand. First quarter rental fleet utilization was lower on a year over year basis due to the deployment of several newly constructed rental units late in the first quarter of 2024, which in turn resulted in a 35% increase in horsepower on rent in the United States at March 31, 2024 as compared to December 31, 2023. The fabrication sales backlog decreased to $185.7 million compared to the $227.4 million backlog at March 31, 2023. Sequentially the quarter-end backlog continued to strengthen during the first quarter of 2024, increasing by $22.9 million from December 31, 2023.
Well Servicing (“WS”)
Three months ended March 31
2024
2023
Change
Revenue
$
23,570
$
32,710
(28
%)
EBITDA (1)
$
4,314
$
8,279
(48
%)
EBITDA (1) as a % of revenue
18
%
25
%
(28
%)
Service hours(2)
24,564
33,246
(26
%)
Canada
15,407
17,491
(12
%)
United States
3,515
6,644
(47
%)
Australia
5,642
9,111
(38
%)
Revenue per service hour(2), dollars
$
960
$
984
(2
%)
Canada
974
984
(1
%)
United States
851
1,003
(15
%)
Australia
989
970
2
%
Utilization(3)
29
%
39
%
(26
%)
Canada
30
%
34
%
(12
%)
United States
35
%
67
%
(48
%)
Australia
22
%
35
%
(37
%)
Rigs, average for period
79
79
–
Canada
56
56
–
United States
11
11
–
Australia
12
12
–
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby. (3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.
First quarter WS segment revenue and EBITDA decreased as compared to 2023 due to lower activity in all jurisdictions. Canadian activity was negatively impacted by lower well abandonment activity and reduced customer activity arising from industry consolidation. Activity levels in the United States were significantly lower due to reduced industry activity levels. Extended wet weather conditions in Australia restricted field activity and resulted in a significant year over year decline in service hours.
Corporate
During the first quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the completion and integration of the Saxon acquisition. $29.6 million of capital expenditures were made during the first three months of 2024.
Total Energy exited the first quarter of 2024 with $124.4 million of positive working capital, including $45.0 million of cash, and $75 million of available credit under its $175 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at March 31, 2024 was 5.70%.
Outlook
Industry conditions remain relatively stable. While North American natural gas spot market price weakness has negatively impacted near term drilling activity, particularly in the United States, relatively strong oil prices and the pending completion of several LNG export facilities have provided tailwinds for the North American energy services industry, particularly in Canada. With the acquisition of Saxon on March 7, 2024 and improved weather conditions, the outlook for Australian activity levels is positive.
The Board of Directors of Total Energy has approved an increase to the Company’s 2024 capital expenditure budget to $66.3 million. This $19.8 million increase includes $8.3 million of growth capital and $11.5 million of maintenance capital. Included in growth capital is $6.4 million of new rental equipment for the RTS segment and the upgrade of a Canadian drilling rig. The $11.5 million of maintenance capital includes new drill pipe for the Canadian CDS segment and Saxon’s 2024 capital maintenance requirements. Total Energy intends to finance its 2024 capital expenditure budget with cash on hand and cashflow.
Conference Call
At 9:00 a.m. (Mountain Time) on May 10, 2024 Total Energy will conduct a conference call and webcast to discuss its first quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (800) 763-8274 or (647) 484-8814. 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 June 10, 2024 by dialing (855) 669-9658 (passcode 0834).
Selected Financial Information
Selected financial information relating to the three months ended March 31, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
March 31
December 31
2024
2023
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
45,039
$
47,935
Accounts receivable
146,166
137,604
Inventory
112,926
98,179
Prepaid expenses and deposits
13,023
16,735
317,154
300,453
Property, plant and equipment
618,009
557,152
Deferred income tax asset
2,474
–
Goodwill
4,053
4,053
$
941,690
$
861,658
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
128,126
$
116,794
Deferred revenue
46,382
39,321
Contingent consideration on business acquisition
2,710
–
Income taxes payable
3,447
9,771
Dividends payable
3,596
3,198
Current portion of lease liabilities
6,425
5,880
Current portion of long-term debt
2,070
2,050
192,756
177,014
Long-term debt
140,419
90,947
Lease liabilities
9,428
9,887
Deferred income tax liability
55,120
53,052
Shareholders’ equity:
Share capital
251,199
251,283
Contributed surplus
4,771
4,805
Accumulated other comprehensive loss
(23,871
)
(25,506
)
Non-controlling interest
302
521
Retained earnings
311,566
299,655
543,967
530,758
$
941,690
$
861,658
Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)
Three months ended March 31
2024
2023
Revenue
$
204,686
$
237,777
Cost of services
148,229
177,986
Selling, general and administration
12,734
11,433
Other expense (income)
320
(6
)
Share-based compensation
709
389
Depreciation
20,664
19,955
Operating income
22,030
28,020
Gain on sale of property, plant and equipment
596
500
Finance costs, net
(1,832
)
(1,703
)
Net income before income taxes
20,794
26,817
Current income tax expense
3,972
324
Deferred income tax expense
1,359
2,455
Total income tax expense
5,331
2,779
Net income
$
15,463
$
24,038
Net income (loss) attributable to:
Shareholders of the Company
$
15,482
$
24,040
Non-controlling interest
(19
)
(2
)
Income per share
Basic
$
0.39
$
0.58
Diluted
$
0.38
$
0.57
Consolidated Statements of Comprehensive Income
Three months ended March 31
2024
2023
Net income
$
15,463
$
24,038
Foreign currency translation
1,635
(618
)
Total other comprehensive income (loss) for the period
1,635
(618
)
Total comprehensive income
$
17,098
$
23,420
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
17,117
$
23,422
Non-controlling interest
(19
)
(2
)
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
Three months ended March 31
2024
2023
Cash provided by (used in):
Operations:
Net income for the period
$
15,463
$
24,038
Add (deduct) items not affecting cash:
Depreciation
20,664
19,955
Share-based compensation
709
389
Gain on sale of property, plant and equipment
(596
)
(500
)
Finance costs, net
1,832
1,703
Foreign currency translation
(270
)
352
Current income tax expense
3,972
324
Deferred income tax expense
1,359
2,455
Income taxes paid
(10,296
)
(44
)
Cashflow
32,837
48,672
Changes in non-cash working capital items:
Accounts receivable
(8,562
)
(17,004
)
Inventory
(14,747
)
(10,803
)
Prepaid expenses and deposits
3,712
637
Accounts payable and accrued liabilities
17,332
4,012
Deferred revenue
7,065
4,227
Cash provided by operating activities
37,637
29,741
Investing:
Purchase of property, plant and equipment
(29,635
)
(30,329
)
Cash paid on acquisition
(47,350
)
–
Proceeds on disposal of property, plant and equipment
627
1,303
Changes in non-cash working capital items
4,006
12,733
Cash used in investing activities
(72,352
)
(16,293
)
Financing:
Advancements of long-term debt
60,000
–
Repayment of long-term debt
(10,508
)
(5,497
)
Repayment of lease liabilities
(1,629
)
(1,617
)
Dividends to shareholders
(3,198
)
(2,490
)
Repurchase of common shares
(724
)
(8,014
)
Partnership distributions
(200
)
–
Interest paid
(11,922
)
(1,663
)
Cash from (used in) financing activities
31,819
(19,281
)
Change in cash and cash equivalents
(2,896
)
(5,833
)
Cash and cash equivalents, beginning of period
47,935
34,061
Cash and cash equivalents, end of period
$
45,039
$
28,228
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.
As at and for the three months ended March 31, 2024 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
81,211
$
22,379
$
77,526
$
23,570
$
–
$
204,686
Cost of services
55,892
10,915
63,551
17,871
–
148,229
Selling, general and administration
3,006
2,261
3,126
1,385
2,956
12,734
Other expense
–
–
–
–
320
320
Share-based compensation
–
–
–
–
709
709
Depreciation
10,343
5,064
2,589
2,399
269
20,664
Operating income (loss)
11,970
4,139
8,260
1,915
(4,254
)
22,030
Gain on sale of property, plant and equipment
33
512
51
–
–
596
Finance costs, net
(22
)
(41
)
(102
)
(23
)
(1,644
)
(1,832
)
Net income (loss) before income taxes
11,981
4,610
8,209
1,892
(5,898
)
20,794
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
452,036
162,178
259,241
62,321
5,914
941,690
Total liabilities
87,200
32,233
100,016
6,867
171,407
397,723
Capital expenditures
12,801
2,785
10,455
3,594
–
29,635
Canada
United States
Australia
Total
Revenue
$
103,064
$
79,117
$
22,505
$
204,686
Non-current assets (2)
389,623
137,198
95,241
622,062
As at and for the three months ended March 31, 2023 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
82,536
$
24,413
$
98,118
$
32,710
$
–
$
237,777
Cost of services
59,418
12,903
81,972
23,693
–
177,986
Selling, general and administration
2,985
2,058
3,577
844
1,969
11,433
Other income
–
–
–
–
(6
)
(6
)
Share-based compensation
–
–
–
–
389
389
Depreciation
9,048
4,872
2,623
3,147
265
19,955
Operating income (loss)
11,085
4,580
9,946
5,026
(2,617
)
28,020
Gain on sale of property, plant and equipment
136
198
30
106
30
500
Finance costs, net
(15
)
(18
)
(121
)
(16
)
(1,533
)
(1,703
)
Net income (loss) before income taxes
11,206
4,760
9,855
5,116
(4,120
)
26,817
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
370,833
184,392
272,071
83,330
(218
)
910,408
Total liabilities
79,568
23,838
124,109
7,632
140,685
375,832
Capital expenditures
23,824
1,538
2,509
2,458
–
30,329
Canada
United States
Australia
Total
Revenue
$
108,126
$
105,007
$
24,644
$
237,777
Non-current assets (2)
386,242
146,475
49,787
582,504
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2)Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca
Notes to the Financial Highlights
(1)
EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations.
(2)
Working capital equals current assets minus current liabilities.
(3)
Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.
(4)
Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 to the Company’s Condensed Interim Consolidated Financial Statements.
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. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at www.sedar.com) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.
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