CALGARY, Alberta, July 06, 2022 (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 June 30, 2022. 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:
August 9, 2022
Time:
9:00 a.m. (Mountain Time)
Call:
(800) 319-4610 or (416) 915-3239
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Shortly after the live webcast, an archived version will be available on Total Energy’s website.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 September 9, 2022, by dialing (855) 669-9658, passcode 9194.
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, June 01, 2022 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy”) (TSX:TOT) announces that its Board of Directors has declared a quarterly dividend of $0.06 (Cdn.) per common share for the quarter ending June 30, 2022 on Total Energy’s outstanding common shares. The dividend is payable on July 15, 2022, to shareholders of record at the close of business on June 30, 2022. The ex-dividend date is June 29, 2022.
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 17, 2022 (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 17, 2022 (the “Meeting”). A total of 29,861,297 common shares, representing 70.3% 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.
Outcome
Votes
Votes
Matter Voted Upon
of Vote
For
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
28,836,635
42,471
(99.9%)
(0.1%)
Glenn Dagenais
Passed
28,674,802
204,304
(99.3%)
(0.7%)
Daniel Halyk
Passed
28,646,829
232,277
(99.2%)
(0.8%)
Jessica Kirstine
Passed
28,820,955
58,151
(99.8%)
(0.2%)
Greg Melchin
Passed
28,741,089
138,017
(99.5%)
(0.5%)
Ken Mullen
Passed
28,081,669
797,437
(97.2%)
(2.8%)
2.
The appointment of MNP LLP as auditors of the Company to hold office until
Passed
29,639,319
166,229
the close of the next annual meeting of shareholders.
(99.4%)
(0.6%)
Total Energy would like to thank Mr. Bruce Pachkowski on his retirement. Mr. Pachkowski was a founding director and contributed significantly to Total Energy’s growth and success since its incorporation in November of 1996.
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 Cam Danyluk, Vice-President Legal and General Counsel at (403) 216-3939 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.
CALGARY, Alberta, May 11, 2022 (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, 2022.
Financial Highlights
($000’s except per share data)
Three months ended March 31
2022
2021
Change
Revenue
$
161,452
$
93,190
73%
Operating income (loss)
3,690
(5,419)
nm
EBITDA (1)
24,314
16,717
45%
Cashflow
22,551
15,332
47%
Net income (loss)
2,467
(3,607)
nm
Attributable to shareholders
2,472
(3,579)
nm
Per Share Data (Diluted)
EBITDA (1)
$
0.56
$
0.37
51%
Cashflow
$
0.52
$
0.34
53%
Attributable to shareholders:
Net income (loss)
$
0.06
$
(0.08)
nm
Common shares (000’s)(4)
Basic
42,713
45,072
(5%)
Diluted
43,423
45,231
(4%)
March 31
December 31
Financial Position at
2022
2021
Change
Total Assets
$
847,022
$
813,522
4%
Long-Term Debt and Lease Liabilities (excluding current portion)
174,970
196,007
(11%)
Working Capital (2)
126,489
137,304
(8%)
Net Debt (3)
48,481
58,703
(17%)
Shareholders’ Equity
492,693
493,437
–
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 March 31, 2022 reflect improved industry conditions in North America and Australia as compared to the first quarter of 2021. The Company did not receive any COVID-19 relief funds during the quarter as compared to $5.9 million received in the first quarter of 2021.
Contract Drilling Services (“CDS”)
Three months ended March 31
2022
2021
Change
Revenue
$
60,062
$
28,571
110%
EBITDA (1)
$
11,441
$
6,268
83%
EBITDA (1) as a % of revenue
19%
22%
(14%)
Operating days(2)
2,683
1,538
74%
Canada
1,625
1,084
50%
United States
701
301
133%
Australia
357
153
133%
Revenue per operating day(2), dollars
$
22,386
$
18,577
21%
Canada
20,343
16,461
24%
United States
21,839
18,588
17%
Australia
32,759
33,542
(2%)
Utilization
31%
17%
82%
Canada
23%
15%
53%
United States
60%
26%
131%
Australia
79%
34%
132%
Rigs, average for period
95
98
(3%)
Canada
77
80
(4%)
United States
13
13
–
Australia
5
5
–
(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 stand-by days.
First quarter 2022 drilling activity in North America and Australia continued to increase with rising oil and natural gas prices. Continued recovery of Canadian industry activity levels from the historic lows of 2020 and market share gains in the United States drove a significant year over year increase in North American operating days and increased revenue per operating day. In Australia, activity and results improved in the first quarter of 2022 compared to the first quarter of 2021 as two drilling rigs returned to service following the completion of recertifications and upgrades. The first quarter EBITDA margin was slightly lower on a year over year basis due to pricing gains not fully offsetting the absence of COVID-19 relief funds and operating cost inflation.
Rentals and Transportation Services (“RTS”)
Three months ended March 31
2022
2021
Change
Revenue
$
15,400
$
7,735
99%
EBITDA (1)
$
5,593
$
1,966
184%
EBITDA (1) as a % of revenue
36%
25%
44%
Revenue per utilized piece of equipment, dollars
$
9,627
$
8,070
19%
Pieces of rental equipment
9,400
10,650
(12%)
Canada
8,520
9,690
(12%)
United States
880
960
(8%)
Rental equipment utilization
17%
9%
89%
Canada
12%
8%
50%
United States
30%
13%
131%
Heavy trucks
71
87
(18%)
Canada
48
62
(23%)
United States
23
25
(8%)
(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 increased as compared to the same period in 2021 due to higher equipment utilization and improved pricing in Canada and the United States. Increased equipment utilization as well as higher revenue per utilized piece of equipment contributed to the year over year increase in first quarter EBITDA and EBITDA margin. The RTS segment has significant leverage to equipment utilization due to its relatively fixed cost structure. Such leverage was demonstrated in the first quarter of 2022 with a disproportionate increase in EBITDA relative to revenue, which was sufficient to offset the absence of COVID-19 relief assistance and significant operating cost inflation.
Compression and Process Services (“CPS”)
Three months ended March 31
2022
2021
Change
Revenue
$
58,565
$
34,156
71%
EBITDA (1)
$
3,258
$
3,575
(9%)
EBITDA (1) as a % of revenue
6%
10%
(40%)
Horsepower of equipment on rent at period end
29,670
22,900
30%
Canada
12,825
9,900
30%
United States
16,845
13,000
30%
Rental equipment utilization during the period (HP)(2)
52%
43%
21%
Canada
37%
31%
19%
United States
74%
62%
19%
Sales backlog at period end, $ million
$
180.7
$
47.7
279%
(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 increase in the CPS segment’s first quarter revenue was due primarily to higher fabrication sales and increased equipment overhaul activity. Compression rental fleet utilization also continued to recover during the first quarter of 2022. The absence of COVID-19 relief assistance, costs incurred to prepare for substantially higher fabrication activity levels and general operating cost inflation contributed to lower first quarter EBITDA and EBITDA margin in 2022 as compared to 2021. Exacerbating the pressure on margins was the completion of fixed price fabrication orders during the first quarter of 2022 that were received in mid-2021. The fabrication sales backlog continued to grow during the first quarter of 2022, increasing by another $33.2 million, or 23%, compared to the $147.5 million backlog at December 31, 2021.
Well Servicing (“WS”)
Three months ended March 31
2022
2021
Change
Revenue
$
27,425
$
22,728
21%
EBITDA (1)
$
6,548
$
5,152
27%
EBITDA (1) as a % of revenue
24%
23%
4%
Service hours(2)
30,839
28,934
7%
Canada
16,449
17,123
(4%)
United States
4,155
2,611
59%
Australia
10,235
9,200
11%
Revenue per service hour(2), dollars
$
889
$
786
13%
Canada
828
646
28%
United States
818
689
19%
Australia
1,017
1,072
(5%)
Utilization(3)
34%
31%
10%
Canada
32%
33%
(3%)
United States
42%
21%
100%
Australia
39%
35%
11%
Rigs, average for period
80
83
(4%)
Canada
57
57
–
United States
11
14
(21%)
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 increased in 2022 as compared to 2021 due primarily to higher activity levels in the United States and Australia and increased North American pricing. Canadian well servicing activity was slightly lower than prior year due to the earlier arrival of spring break up. Increased oil production activity and significant well abandonment activity in Canada continued to underpin North American well service activity. Despite the absence of COVID-19 relief funds and operating cost inflation, the WS segment’s EBITDA margin improved modestly for the first quarter of 2022 compared to 2021 as a result of higher pricing and utilization.
Corporate
During the first quarter of 2022, Total Energy remained focused on the safe and efficient operation of its business, improving the financial performance of all business segments and the prudent deployment of capital. $11.6 million of capital expenditures were made during the first quarter, which included $2.0 million of carry-over from 2021. Partially funding these capital expenditures was $3.0 million of proceeds from the sale of property, plant and equipment that realized a $1.5 million gain on sale.
During the first three months of 2022 bank debt was further reduced by $20.7 million, or 11%, and 530,000 common shares were repurchased under the Company’s normal course issuer bid at an average price of $6.66 (including commissions). The Company exited the first quarter of 2022 with $126.5 million of positive working capital, including $44.2 million of cash, and $115 million of available credit under its $225 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at March 31, 2022 was 2.79%.
Outlook
Total Energy’s diversified business platform, efficient cost structure and disciplined deployment of capital allowed the Company to generate significant free cash flow since the outbreak of the global COVID-19 pandemic in the first quarter of 2020. To date, such free cash flow has been primarily directed towards enhancing shareholder returns through debt repayment and share buybacks. From the beginning of 2020 to March 31, 2022, Total Energy has repaid $108.0 million of bank debt and made $14.0 million of share repurchases under its normal course issuer bid. In April of 2022 an additional $10.0 million of bank debt was voluntarily repaid.
Total Energy’s diversification provides the Company with significant leverage to recovering global energy industry activity levels, as evidenced by the realization of its third consecutive profitable quarter during the first quarter of 2022. With continued strength in commodity prices, current indications are that industry conditions will continue to improve for the remainder of 2022.
In direct response to increased customer demand, the Company’s Board of Directors has approved a $16.0 million increase to Total Energy’s 2022 capital expenditure budget to $42.1 million. $13.0 million of this increase is being directed towards equipment recertifications and upgrades and the purchase of new drill pipe, with the remaining $3.0 million earmarked for additions to the compression rental fleet. Total Energy plans to fund the remaining $30.5 million of its 2022 capital expenditure budget with cash on hand and cashflow.
Dividend Reinstatement
Total Energy’s Board of Directors has determined to reinstate a quarterly dividend to shareholders and has declared a dividend of $0.06 per common share for the quarter ended June 30, 2022 on Total Energy’s outstanding common shares. The dividend is payable on July 15, 2022 to shareholders of record at the close of business on June 30, 2022. The ex-dividend date is June 29, 2022. Unless otherwise indicated, all dividends declared by the Company are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).
Annual Meeting of Shareholders
Shareholders are reminded that Total Energy’s annual meeting of Shareholders will take place on Tuesday, May 17, 2022 at 10:00 am (Mountain Time) at the Calgary Petroleum Club. In the event that any changes to the meeting are required due to COVID-19 public health orders or otherwise, the Company will provide updated meeting information by way of news release, which will also be made available on SEDAR at www.sedar.com and on Total Energy’s website at www.totalenergy.ca.
Mr. Bruce Pachkowski, a founding director and current Chair of the Board, will be retiring from Total Energy’s Board of Directors effective at the end of his current term, following the Company’s upcoming annual meeting of Shareholders. Mr. Pachkowski has served as a director for 25 years and has contributed significantly to Total Energy’s growth and success since its incorporation in November of 1996. On behalf of all shareholders of Total Energy, the Board of Directors extends its gratitude to Mr. Pachkowski and wishes him and his family the very best in retirement.
Conference Call
At 9:00 a.m. (Mountain Time) on May 12, 2022 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) 319-4610 or (416) 915-3239. 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 12, 2022 by dialing (855) 669-9658 (passcode 8790).
Selected Financial Information
Selected financial information relating to the three months ended March 31, 2022 and 2021 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 2021 Annual report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
March 31
December 31
2022
2021
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
44,161
$
33,365
Accounts receivable
116,000
90,543
Inventory
96,447
89,921
Prepaid expenses and deposits
9,241
9,208
Income taxes receivable
2,897
2,208
Current portion of lease asset
489
487
269,235
225,732
Property, plant and equipment
566,433
575,913
Income taxes receivable
7,070
7,070
Deferred income tax asset
–
393
Lease asset
231
361
Goodwill
4,053
4,053
$
847,022
$
813,522
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
82,944
$
65,513
Deferred revenue
53,326
16,274
Current portion of lease liabilities
3,851
4,030
Current portion of long-term debt
2,625
2,611
142,746
88,428
Long-term debt
167,239
187,906
Lease liabilities
7,731
8,101
Deferred tax liability
36,613
35,650
Shareholders’ equity:
Share capital
267,566
270,905
Contributed surplus
5,977
5,757
Accumulated other comprehensive loss
(26,607
)
(26,704
)
Non-controlling interest
556
561
Retained earnings
245,201
242,918
492,693
493,437
$
847,022
$
813,522
Consolidated Statements of Comprehensive Income (Loss)
(in thousands of Canadian dollars except per share amounts)
(unaudited)
Three months ended March 31
2022
2021
Revenue
$
161,452
$
93,190
Cost of services
129,798
71,088
Selling, general and administration
8,786
6,539
Other income
(190
)
(1,066
)
Share-based compensation
220
201
Depreciation
19,148
21,847
Operating income (loss)
3,690
(5,419
)
Gain on sale of property, plant and equipment
1,476
289
Finance costs, net
(1,806
)
(1,807
)
Net income (loss) before income taxes
3,360
(6,937
)
Current income tax recovery
(463
)
(471
)
Deferred income tax expense (recovery)
1,356
(2,859
)
Total income tax expense (recovery)
893
(3,330
)
Net income (loss)
$
2,467
$
(3,607
)
Net income (loss) attributable to:
Shareholders of the Company
$
2,472
$
(3,579
)
Non-controlling interest
(5
)
(28
)
Income (loss) per share
Basic and diluted
$
0.06
$
(0.08
)
Consolidated Statements of Comprehensive Income (Loss)
Three months ended March 31
2022
2021
Net income (loss) for the period
$
2,467
$
(3,607
)
Foreign currency translation
97
(5,302
)
Total other comprehensive income (loss) for the period
97
(5,302
)
Total comprehensive income (loss)
$
2,564
$
(8,909
)
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
2,569
$
(8,881
)
Non-controlling interest
(5
)
(28
)
Consolidated Statements of Cash Flows (in thousands of Canadian dollars)
(unaudited)
Three months ended March 31
2022
2021
Cash provided by (used in):
Operations:
Net income (loss) for the period
$
2,467
$
(3,607
)
Add (deduct) items not affecting cash:
Depreciation
19,148
21,847
Share-based compensation
220
201
Gain on sale of property, plant and equipment
(1,476
)
(289
)
Finance costs, net
1,806
1,807
Unrealized gain on foreign currencies translation
(190
)
(1,066
)
Current income tax recovery
(463
)
(471
)
Deferred income tax expense (recovery)
1,356
(2,859
)
Income taxes paid
(317
)
(231
)
Cashflow
22,551
15,332
Changes in non-cash working capital items:
Accounts receivable
(24,848
)
(3,897
)
Inventory
(6,527
)
1,157
Prepaid expenses and deposits
58
973
Accounts payable and accrued liabilities
16,669
868
Deferred revenue
37,052
2,433
Cash provided by operating activities
44,955
16,866
Investing:
Purchase of property, plant and equipment
(11,553
)
(5,074
)
Proceeds on disposal of property, plant and equipment
3,039
440
Changes in non-cash working capital items
1,343
972
Cash used in investing activities
(7,171
)
(3,662
)
Financing:
Repayment of long-term debt
(20,653
)
(10,638
)
Repayment of lease liabilities
(1,062
)
(1,820
)
Repurchase of common shares
(3,528
)
(329
)
Interest paid
(1,745
)
(2,708
)
Cash used in financing activities
(26,988
)
(15,495
)
Change in cash and cash equivalents
10,796
(2,291
)
Cash and cash equivalents, beginning of period
33,365
22,996
Cash and cash equivalents, end of period
$
44,161
$
20,705
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 labour 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 labour 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, 2022 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate (1)
Total
Drilling
Transportation
and Process
Servicing
Services
Services
Services
Revenue
$
60,062
$
15,400
$
58,565
$
27,425
$
–
$
161,452
Cost of services
46,994
8,847
54,333
19,624
–
129,798
Selling, general and administration
1,602
1,626
1,794
1,268
2,496
8,786
Other income
–
–
–
–
(190
)
(190
)
Share-based compensation
–
–
–
–
220
220
Depreciation
8,877
4,909
1,913
3,202
247
19,148
Operating income (loss)
2,589
18
525
3,331
(2,773
)
3,690
Gain (loss) on sale of property, plant and equipment
(25
)
666
820
15
–
1,476
Finance costs, net
(2
)
(16
)
(72
)
(5
)
(1,711
)
(1,806
)
Net income (loss) before income taxes
2,562
668
1,273
3,341
(4,484
)
3,360
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
338,397
180,381
227,657
94,335
6,252
847,022
Total liabilities
64,475
12,874
90,416
5,282
181,282
354,329
Capital expenditures
10,182
234
1,070
56
11
11,553
Three months ended March 31, 2022
Canada
United States
Australia
Other
Total
Revenue
$
88,193
$
43,644
$
29,615
$
–
$
161,452
Non-current assets (2)
375,077
137,036
58,604
–
570,717
As at and for the three months ended March 31, 2021 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
28,571
$
7,735
$
34,156
$
22,728
$
–
$
93,190
Cost of services
20,915
4,672
29,224
16,277
–
71,088
Selling, general and administration
1,396
1,252
1,444
1,268
1,179
6,539
Other income
–
–
–
–
(1,066
)
(1,066
)
Share-based compensation
–
–
–
–
201
201
Depreciation
9,865
5,518
2,407
3,852
205
21,847
Operating income (loss)
(3,605
)
(3,707
)
1,081
1,331
(519
)
(5,419
)
Gain (loss) on sale of property, plant and equipment
8
155
87
(31
)
70
289
Finance costs, net
(1
)
(16
)
(78
)
(6
)
(1,706
)
(1,807
)
Net income (loss) before income taxes
(3,598
)
(3,568
)
1,090
1,294
(2,155
)
(6,937
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
313,993
194,189
214,582
99,897
9,302
831,963
Total liabilities
55,347
8,947
32,301
5,407
228,011
330,013
Capital expenditures
4,257
219
168
430
–
5,074
Three months ended March 31, 2021
Canada
United States
Australia
Other
Total
Revenue
$
59,747
$
18,309
$
15,132
$
2
$
93,190
Non-current assets (2)
410,127
147,742
66,286
–
624,155
(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 5 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.
CALGARY, Alberta, April 06, 2022 (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 March 31, 2022. 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:
May 12, 2022
Time:
9:00 a.m. (Mountain Time)
Call:
(800) 319-4610 or (416) 915-3239
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 June 12, 2022, by dialing (855) 669-9658, passcode 8790.
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, March 10, 2022 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months and year ended December 31, 2021.
Financial Highlights
($000’s except per share data)
Three months ended December 31
Year ended December 31
2021
2020
Change
2021
2020
Change
Revenue
$
134,629
$
83,472
61
%
$
431,576
$
365,750
18
%
Operating income (loss)
1,680
(4,013
)
nm
(1,413
)
(36,539
)
(96
%)
EBITDA (1)
22,567
19,546
15
%
86,015
81,204
6
%
Cashflow
22,144
18,431
20
%
80,191
73,437
9
%
Net income (loss)
1,036
(1,732
)
nm
(428
)
(30,455
)
(99
%)
Attributable to shareholders
1,049
(1,739
)
nm
(360
)
(30,450
)
(99
%)
Per Share Data (Diluted)
EBITDA (1)
$
0.52
$
0.43
21
%
$
1.93
$
1.80
7
%
Cashflow
$
0.51
$
0.41
24
%
$
1.80
$
1.63
10
%
Attributable to shareholders:
Net income (loss)
$
0.02
$
(0.04
)
nm
$
(0.01
)
$
(0.68
)
(99
%)
Common shares (000’s)(4)
Basic
43,341
45,081
(4
%)
44,384
45,083
(2
%)
Diluted
43,818
45,081
(3
%)
44,673
45,083
(1
%)
December 31
December 31
Financial Position at
2021
2020
Change
Total Assets
$
813,522
$
849,579
(4
%)
Long-Term Debt and Lease Liabilities (excluding current portion)
196,007
238,937
(18
%)
Working Capital (2)
137,304
138,940
(1
%)
Net Debt (3)
58,703
99,997
(41
%)
Shareholders’ Equity
493,437
510,987
(3
%)
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 December 31, 2021 reflect improving industry conditions in North America and Australia as compared to the fourth quarter of 2020. $1.4 million was recognized during the fourth quarter of 2021 under various COVID-19 relief programs, an 85% decrease from the $9.1 million of COVID-19 relief received in the fourth quarter of 2020.
Contract Drilling Services (“CDS”)
Three months ended December 31
Year ended December 31
2021
2020
Change
2021
2020
Change
Revenue
$
48,766
$
23,288
109
%
$
146,411
$
96,661
51
%
EBITDA (1)
$
12,700
$
6,275
102
%
$
35,068
$
19,499
80
%
EBITDA (1) as a % of revenue
26
%
27
%
(4
%)
24
%
20
%
20
%
Operating days(2)
2,340
1,210
93
%
7,334
4,533
62
%
Canada
1,342
747
80
%
4,307
2,648
63
%
United States
663
286
132
%
2,041
781
161
%
Australia
335
177
89
%
986
1,104
(11
%)
Revenue per operating day(2), dollars
$
20,840
$
19,246
8
%
$
19,963
$
21,324
(6
%)
Canada
18,632
15,511
20
%
16,944
16,094
5
%
United States
20,979
17,804
18
%
19,740
19,504
1
%
Australia
29,412
37,339
(21
%)
33,613
35,154
(4
%)
Utilization
27
%
13
%
108
%
21
%
12
%
75
%
Canada
19
%
10
%
90
%
15
%
9
%
67
%
United States
55
%
24
%
129
%
43
%
13
%
231
%
Australia
73
%
38
%
92
%
54
%
60
%
(10
%)
Rigs, average for period
95
98
(3
%)
97
102
(5
%)
Canada
77
80
(4
%)
79
81
(2
%)
United States
13
13
–
13
16
(19
%)
Australia
5
5
–
5
5
–
(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 stand-by days.
Fourth quarter 2021 drilling activity in North America and Australia continued to improve with rising oil and natural gas prices. Continued recovery of Canadian industry activity levels from the historic lows of 2020 and market share gains in the United States drove a significant year over year increase in North American operating days and increased revenue per operating day. In Australia, activity and results improved in the fourth quarter of 2021 compared to the fourth quarter of 2020 as two drilling rigs returned to service following the completion of recertifications and upgrades. Negatively impacting fourth quarter 2021 CDS segment results was $0.3 million of non-recurring equipment reactivation costs as several idle drilling rigs were put back into service. The fourth quarter EBITDA margin was slightly lower on a year over year basis primarily as a result of pricing gains not fully offsetting the impact of a significant decrease in COVID-19 relief funds and operating cost inflation.
Rentals and Transportation Services (“RTS”)
Three months ended December 31
Year ended December 31
2021
2020
Change
2021
2020
Change
Revenue
$
10,873
$
6,975
56
%
$
36,974
$
34,529
7
%
EBITDA (1)
$
2,712
$
2,198
23
%
$
12,640
$
9,473
33
%
EBITDA (1) as a % of revenue
25
%
32
%
(22
%)
34
%
27
%
26
%
Revenue per utilized piece of equipment, dollars
$
8,249
$
9,361
(12
%)
$
33,500
$
40,642
(18
%)
Pieces of rental equipment
9,420
10,650
(12
%)
9,420
10,650
(12
%)
Canada
8,540
9,710
(12
%)
8,540
9,710
(12
%)
United States
880
940
(6
%)
880
940
(6
%)
Rental equipment utilization
14
%
7
%
100
%
11
%
8
%
38
%
Canada
12
%
6
%
100
%
10
%
7
%
43
%
United States
30
%
13
%
131
%
19
%
19
%
–
Heavy trucks
79
87
(9
%)
79
87
(9
%)
Canada
56
62
(10
%)
56
62
(10
%)
United States
23
25
(8
%)
23
25
(8
%)
(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Fourth quarter revenue in the RTS segment increased as compared to the same period in 2020 due to higher equipment utilization in both Canada and the United States. Increased equipment utilization offset lower revenue per utilized piece and contributed to an increase in EBITDA during the fourth quarter of 2021 as compared to 2020 despite a year over year decrease in fourth quarter EBITDA margin. The year over year decrease in fourth quarter EBITDA margin was due primarily to the mix of equipment operating and equipment reactivation expenses as well as realized price increases not fully offsetting the significant year over year decrease in COVID-19 relief funds and operating cost inflation.
Compression and Process Services (“CPS”)
Three months ended December 31
Year ended December 31
2021
2020
Change
2021
2020
Change
Revenue
$
49,314
$
32,767
50
%
$
155,315
$
136,005
14
%
EBITDA (1)
$
3,513
$
5,068
(31
%)
$
20,613
$
21,906
(6
%)
EBITDA (1) as a % of revenue
7
%
15
%
(53
%)
13
%
16
%
(19
%)
Horsepower of equipment on rent at period end
25,755
23,700
9
%
25,755
23,700
9
%
Canada
10,930
11,150
(2
%)
10,930
11,150
(2
%)
United States
14,825
12,550
18
%
14,825
12,550
18
%
Rental equipment utilization during the period (HP)(2)
50
%
45
%
11
%
48
%
61
%
(21
%)
Canada
33
%
39
%
(15
%)
33
%
50
%
(34
%)
United States
75
%
62
%
21
%
72
%
86
%
(16
%)
Sales backlog at period end, $ million
$
147.5
$
43.9
236
%
$
147.5
$
43.9
236
%
(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 increase in the CPS segment’s fourth quarter revenue was due primarily to higher fabrication sales and increased equipment overhaul activity. Compression rental fleet utilization continued to recover in the United States during the fourth quarter of 2021 but remained slightly lower in Canada on a year over year basis. Lower utilization of the rental fleet, a substantial decrease in COVID-19 relief fund receipts, costs incurred to prepare for substantially higher fabrication activity levels in 2022 and general operating cost inflation contributed to a lower EBITDA margin during the fourth quarter of 2021 as compared to 2020. The fabrication sales backlog continued to grow during the fourth quarter of 2021, increasing by another $52.0 million, or 54%, compared to the $95.5 million backlog at September 30, 2021.
Well Servicing (“WS”)
Three months ended December 31
Year ended December 31
2021
2020
Change
2021
2020
Change
Revenue
$
25,676
$
20,422
26
%
$
92,876
$
98,555
(6
%)
EBITDA (1)
$
6,551
$
7,055
(7
%)
$
22,964
$
28,126
(18
%)
EBITDA (1) as a % of revenue
26
%
35
%
(26
%)
25
%
29
%
(14
%)
Service hours(2)
30,525
24,333
25
%
111,585
113,428
(2
%)
Canada
16,061
13,042
23
%
56,562
42,011
35
%
United States
3,559
1,837
94
%
13,765
10,734
28
%
Australia
10,906
9,454
15
%
41,259
60,683
(32
%)
Revenue per service hour(2), dollars
$
841
$
840
–
$
832
$
869
(4
%)
Canada
774
623
24
%
708
637
11
%
United States
709
695
2
%
696
727
(4
%)
Australia
983
1,167
(16
%)
1,049
1,055
(1
%)
Utilization(3)
33
%
25
%
32
%
29
%
26
%
12
%
Canada
31
%
25
%
24
%
27
%
20
%
35
%
United States
32
%
14
%
129
%
27
%
21
%
29
%
Australia
41
%
36
%
14
%
39
%
58
%
(33
%)
Rigs, average for period
83
83
–
83
83
–
Canada
57
57
–
57
57
–
United States
12
14
(14
%)
14
14
–
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.
Fourth quarter WS segment revenue increased in 2021 as compared to 2020 due primarily to higher activity levels in North America. Underpinning this increase was higher North American oil production activity and significant well abandonment activity in Canada. The year over year decrease in EBITDA and EBITDA margin for the three months and year ended December 31, 2021 was primarily due to a significant year over year decrease in COVID-19 relief funds, lower pricing in Australia and increased North American operating costs that were not fully offset by price increases.
Corporate
Total Energy continued to focus on the safe and efficient operation of its business and the preservation of its balance sheet strength and financial liquidity during the fourth quarter of 2021. Despite the additional health and safety challenges presented by the COVID-19 pandemic, during 2021 Total Energy recorded its lowest annual consolidated total recordable injury frequency rate since the Company began measuring consolidated performance in 2008.
During the fourth quarter of 2021 bank debt was reduced by $5.6 million, or 3%, and 987,634 common shares were repurchased under the Company’s normal course issuer bid at an average price of $5.32 (including commissions). The Company exited 2021 with $137.3 million of positive working capital, including $33.4 million of cash, and $125 million of available credit under its $255 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at December 31, 2021 was 2.68%.
Outlook
Total Energy’s diversified geographic and business exposure provided a measure of stability following the outbreak of the COVID-19 pandemic in March of 2020 and contributed to the generation of significant free cash flow during very difficult industry conditions. A substantial portion of the Company’s cash flow generated since the beginning of 2020 has been directed towards debt repayment, with bank debt (net of cash) being reduced from January 1, 2020 to December 31, 2021 by $100.8 million, or 39%. Total Energy also returned $10.0 million to shareholders during 2021 with the repurchase and cancellation of 2.1 million common shares under the Company’s normal course issuer bid.
Total Energy’s diversified business platform and efficient cost structure also provides the Company with significant leverage to recovering global energy industry activity levels, as evidenced by the Company’s return to profitability during the second half of 2021 despite only modest increases in industry activity levels. Demand for Total Energy’s products and services has continued to strengthen thus far in 2022 and at current commodity prices the Company expects activity levels will continue to improve in all business segments on a seasonally adjusted basis.
Total Energy previously announced a preliminary 2022 capital expenditure budget of $26.1 million that will be directed towards the continued expansion of the CPS segment’s parts and service and compression rental business lines as well as the maintenance and upgrade of equipment in all business segments in direct response to increasing customer demand. Total Energy expects to fund its current 2022 capital budget with cash on hand and cash flow.
On January 12, 2022 Total Energy extended the maturity of its primary bank credit facility to November 10, 2024. Given the Company’s strong liquidity position, significant reduction in bank debt since the previous extension and desire to reduce standby charges, Total Energy requested that its primary credit facility be reduced by $30 million to $220.0 million. Following an additional $20.0 million of voluntary debt repayment thus far in 2022, $115.0 million of credit is currently available on the Company’s existing $225.0 million of revolving bank credit facilities.
While commodity prices are strong, oil and gas producers have generally restrained their exploration and development activities as compared to previous periods of similar high oil and natural gas prices. In such environment, Total Energy remains focused on the safe and efficient operation of its business, debt repayment, disciplined capital deployment and improving shareholder returns, including through share repurchases under its normal course issuer bid. Subsequent to December 31, 2021 the Company has repurchased and cancelled an additional 290,000 common shares at a total cost of $1.8 million, resulting in a current outstanding share count of 42.71 million. Total Energy continues to identify and explore opportunities to leverage its equipment, technologies and expertise to pursue new business opportunities, including in the areas of alternative resource extraction, emerging energy technologies and emissions reduction and sequestration.
Conference Call
At 9:00 a.m. (Mountain Time) on March 11, 2022 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. 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) 319-4610 or (416) 915-3239. 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 April 11, 2022 by dialing (855) 669-9658 (passcode 8481).
Selected Financial Information
Selected financial information relating to the three months and year ended December 31, 2021 and 2020 is included in this news release. This information should be read in conjunction with the 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 reproduced in the Company’s 2021 Annual report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
(audited)
December 31,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
33,365
$
22,996
Accounts receivable
90,543
73,373
Inventory
89,921
95,586
Prepaid expenses and deposits
9,208
6,876
Income taxes receivable
2,208
1,287
Current portion of finance lease asset
487
566
225,732
200,684
Property, plant and equipment
575,913
636,996
Income taxes receivable
7,070
7,070
Deferred income tax asset
393
57
Lease asset
361
719
Goodwill
4,053
4,053
$
813,522
$
849,579
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
65,513
$
46,410
Deferred revenue
16,274
6,365
Current portion of lease liabilities
4,030
6,417
Current portion of long-term debt
2,611
2,552
88,428
61,744
Long-term debt
187,906
230,517
Lease liabilities
8,101
8,420
Deferred income tax liability
35,650
37,911
Shareholders’ equity:
Share capital
270,905
284,077
Contributed surplus
5,757
4,966
Accumulated other comprehensive loss
(26,704
)
(18,736
)
Non-controlling interest
561
629
Retained earnings
242,918
240,051
493,437
510,987
$
813,522
$
849,579
Consolidated Statements of Comprehensive Income (Loss)
(in thousands of Canadian dollars except per share amounts)
Three months ended
December 31
Year ended
December 31
2021
2020
2021
2020
(unaudited)
(unaudited)
(audited)
(audited)
Revenue
$
134,629
$
83,472
$
431,576
$
365,750
Cost of services
103,657
59,107
323,092
266,720
Selling, general and administration
8,372
5,277
28,234
27,309
Other expense (income)
448
844
(2,206
)
(5,969
)
Share-based compensation
228
176
804
866
Depreciation
20,244
22,081
83,065
113,363
Operating income (loss)
1,680
(4,013
)
(1,413
)
(36,539
)
Gain on sale of property, plant and equipment
643
1,478
4,363
4,380
Finance costs, net
(1,583
)
(2,283
)
(6,837
)
(10,346
)
Net income (loss) before income taxes
740
(4,818
)
(3,887
)
(42,505
)
Current income tax (recovery) expense
(285
)
768
(862
)
3,075
Deferred income tax recovery
(11
)
(3,854
)
(2,597
)
(15,125
)
Total income tax recovery
(296
)
(3,086
)
(3,459
)
(12,050
)
Net income (loss)
$
1,036
$
(1,732
)
$
(428
)
$
(30,455
)
Net income (loss) attributable to:
Shareholders of the Company
$
1,049
$
(1,739
)
$
(360
)
$
(30,450
)
Non-controlling interest
(13
)
7
(68
)
(5
)
Income (loss) per share:
Basic and diluted earnings per share
$
0.02
$
(0.04
)
$
(0.01
)
$
(0.68
)
Consolidated Statements of Comprehensive Income (Loss)
Three months ended
December 31
Year ended
December 31
2021
2020
2021
2020
(unaudited)
(unaudited)
(audited)
(audited)
Net income (loss) for the year
$
1,036
$
(1,732
)
$
(428
)
$
(30,455
)
Other Comprehensive Loss (OCI):
Foreign currency translation adjustment
33
(5,052
)
(7,968
)
(2,416
)
Deferred tax effect
–
528
–
402
Total other comprehensive income (loss) for the year
33
(4,524
)
(7,968
)
(2,014
)
Total comprehensive income (loss)
$
1,069
$
(6,256
)
$
(8,396
)
$
(32,469
)
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
1,082
$
(6,263
)
$
(8,328
)
$
(32,464
)
Non-controlling interest
(13
)
7
(68
)
(5
)
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
Three months ended
December 31
Year ended
December 31
2021
2020
2021
2020
(unaudited)
(unaudited)
(audited)
(audited)
Cash provided by (used in):
Operations:
Net income (loss) for the year
$
1,036
$
(1,732
)
$
(428
)
$
(30,455
)
Add (deduct) items not affecting cash:
Depreciation
20,244
22,081
83,065
113,363
Share-based compensation
228
176
804
866
Gain on sale of property, plant and equipment
(643
)
(1,478
)
(4,363
)
(4,380
)
Finance costs, net
1,583
2,283
6,837
10,346
Unrealized loss (gain) on foreign currencies translation
448
903
(2,206
)
(5,910
)
Current income tax expense (recovery)
(285
)
768
(862
)
3,075
Deferred income tax recovery
(11
)
(3,854
)
(2,597
)
(15,125
)
Income taxes recovered (paid)
(456
)
(716
)
(59
)
1,657
Cashflow
22,144
18,431
80,191
73,437
Changes in non-cash working capital items:
Accounts receivable
(346
)
(3,569
)
(17,637
)
41,129
Inventory
9,409
6,522
5,107
10,086
Prepaid expenses and deposits
(462
)
(3,506
)
(2,332
)
2,386
Accounts payable and accrued liabilities
(1,638
)
3,192
14,337
(43,398
)
Deferred revenue
(1,314
)
(1,844
)
9,909
2,482
27,793
19,226
89,575
86,122
Investing:
Purchase of property, plant and equipment
(11,753
)
(4,606
)
(28,983
)
(16,904
)
Proceeds on disposal of property, plant and equipment
1,351
468
10,507
5,936
Changes in non-cash working capital items
3,881
238
4,223
(2,570
)
(6,521
)
(3,900
)
(14,253
)
(13,538
)
Financing:
Advances under long-term debt
–
–
–
29,796
Repayment of long-term debt
(5,641
)
(10,626
)
(42,552
)
(74,590
)
Repayment of lease liabilities
(1,093
)
(1,912
)
(5,803
)
(8,266
)
Partnership distributions to non-controlling interests
–
–
–
(125
)
Payment of dividends
–
–
–
(2,710
)
Repurchase of common shares
(5,258
)
–
(10,000
)
(427
)
Shares issued on exercise of options
42
–
42
–
Interest paid
(1,526
)
(4,645
)
(6,640
)
(13,139
)
(13,476
)
(17,183
)
(64,953
)
(69,461
)
Change in cash and cash equivalents
7,796
(1,857
)
10,369
3,123
Cash and cash equivalents, beginning of period
25,569
24,853
22,996
19,873
Cash and cash equivalents, end of period
$
33,365
$
22,996
$
33,365
$
22,996
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 labour 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 labour 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 December 31, 2021 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
48,766
$
10,873
$
49,314
$
25,676
$
–
$
134,629
Cost of services
34,748
6,790
44,054
18,065
–
103,657
Selling, general and administration
1,528
1,491
1,797
1,231
2,325
8,372
Other expense
–
–
–
–
448
448
Share-based compensation
–
–
–
–
228
228
Depreciation (2)
9,143
5,070
2,200
3,585
246
20,244
Operating income (loss)
3,347
(2,478
)
1,263
2,795
(3,247
)
1,680
Gain (loss) on sale of property, plant and equipment
210
120
50
271
(8
)
643
Finance costs, net
(2
)
(12
)
(65
)
(4
)
(1,500
)
(1,583
)
Net income (loss) before income taxes
3,555
(2,370
)
1,248
3,062
(4,755
)
740
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
325,143
180,188
206,278
93,274
8,639
813,522
Total liabilities
60,691
10,316
45,721
4,058
199,299
320,085
Capital expenditures
7,934
883
2,714
213
9
11,753
Canada
United States
Australia
Other
Total
Revenue
$
69,488
$
37,610
$
27,531
$
–
$
134,629
Non-current assets (3)
378,519
141,552
60,256
–
580,327
As at and for the three months ended December 31, 2020 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
23,288
$
6,975
$
32,767
$
20,442
$
–
$
83,472
Cost of services
16,006
4,062
26,516
12,523
–
59,107
Selling, general and administration
1,068
868
1,263
875
1,203
5,277
Other expense
–
–
–
–
844
844
Share-based compensation
–
–
–
–
176
176
Depreciation (2)
9,822
5,651
2,481
3,957
170
22,081
Operating income (loss)
(3,608
)
(3,606
)
2,507
3,087
(2,393
)
(4,013
)
Gain on sale of property, plant and equipment
61
153
80
11
1,173
1,478
Finance costs, net
(32
)
(36
)
(85
)
(6
)
(2,124
)
(2,283
)
Net income (loss) before income taxes
(3,579
)
(3,489
)
2,502
3,092
(3,344
)
(4,818
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
319,075
199,793
215,533
104,743
10,435
849,579
Total liabilities
56,557
11,022
29,229
5,899
235,885
338,592
Capital expenditures
2,163
167
988
1,288
–
4,606
Canada
United States
Australia
Other
Total
Revenue
$
46,821
$
18,896
$
17,755
$
–
$
83,472
Non-current assets (3)
419,332
155,175
67,261
–
641,768
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2021 Financial Statements for further details. (3) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the year ended December 31, 2021 (audited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
146,411
$
36,974
$
155,315
$
92,876
$
–
$
431,576
Cost of services
107,107
20,779
129,685
65,521
–
323,092
Selling, general and administration
4,729
5,506
6,550
4,701
6,748
28,234
Other income
–
–
–
–
(2,206
)
(2,206
)
Share-based compensation
–
–
–
–
804
804
Depreciation(2)
37,507
20,547
9,225
14,844
942
83,065
Operating income (loss)
(2,932
)
(9,858
)
9,855
7,810
(6,288
)
(1,413
)
Gain on sale of property, plant and equipment
493
1,951
1,533
310
76
4,363
Finance costs, net
(12
)
(71
)
(286
)
(20
)
(6,448
)
(6,837
)
Net income (loss) before income taxes
(2,451
)
(7,978
)
11,102
8,100
(12,660
)
(3,887
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
325,143
180,188
206,278
93,274
8,639
813,522
Total liabilities
60,691
10,316
45,721
4,058
199,299
320,085
Capital expenditures
20,491
1,224
6,205
1,054
9
28,983
Canada
United States
Australia
Other
Total
Revenue
$
242,613
$
105,305
$
83,656
$
2
$
431,576
Non-current assets (3)
378,519
141,552
60,256
–
580,327
As at and for the year ended December 31, 2020 (audited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate
Total
Drilling
Transportation
and Process
Servicing
(1)
Services
Services
Services
Revenue
$
96,661
$
34,529
$
136,005
$
98,555
$
–
$
365,750
Cost of services
72,388
20,429
108,197
65,706
–
266,720
Selling, general and administration
5,900
5,692
6,474
4,750
4,493
27,309
Other income
–
–
–
–
(5,969
)
(5,969
)
Share-based compensation
–
–
–
–
866
866
Depreciation (2)
64,297
23,493
9,603
15,241
729
113,363
Operating income (loss)
(45,924
)
(15,085
)
11,731
12,858
(119
)
(36,539
)
Gain on sale of property, plant and equipment
1,126
1,065
572
27
1,590
4,380
Finance costs, net
(161
)
(93
)
(374
)
(31
)
(9,687
)
(10,346
)
Net income (loss) before income taxes
(44,959
)
(14,113
)
11,929
12,854
(8,216
)
(42,505
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
319,075
199,793
215,533
104,743
10,435
849,579
Total liabilities
56,557
11,022
29,229
5,899
235,885
338,592
Capital expenditures
4,703
1,024
7,922
3,243
12
16,904
Canada
United States
Australia
Other
Total
Revenue
$
177,519
$
84,294
$
103,884
$
53
$
365,750
Non-current assets (3)
419,332
155,175
67,261
–
641,768
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2021 Financial Statements for further details. (3) 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 16 to the Company’s 2021 Annual 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.
CALGARY, Alberta, Feb. 01, 2022 (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 December 31, 2021. 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:
March 11th, 2022
Time:
9:00 a.m. (Mountain Time)
Call:
(800) 319-4610 or (416) 915-3239
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 April 11th, 2022, by dialing (855) 669-9658, passcode 8481.
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, Jan. 10, 2022 (GLOBE NEWSWIRE) — Total Energy Services Inc. (TSX:TOT) (“Total” or the “Company”) announces its preliminary 2022 capital expenditure budget of $26.1 million. Included in this budget is $6.7 million of expansion capital and $19.4 million for equipment maintenance and upgrades. In addition, approximately $2.0 million of 2021 capital expenditure commitments will carry forward into 2022.
$6.7 million of expansion capital is being allocated primarily to the Company’s Compression and Process Services segment to support the continued growth of its North American compression rental and parts and service businesses.
The $19.4 million capital maintenance budget will be directed towards equipment upgrades, re-certifications and maintenance in all business segments, including $6.8 million for upgrades to the Canadian drilling rig fleet in response to strong customer demand for high performance rigs that minimize the environmental impact of drilling operations.
Total intends to finance its preliminary 2022 capital expenditure budget with cash on hand and cash flow from operations.
Total Energy provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to 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 & CEO at (403) 216-3921 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. 08, 2021 (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, 2021.
Financial Highlights
($000’s except per share data)
Three months ended September 30
Nine months ended September 30
2021
2020
Change
2021
2020
Change
Revenue
$
118,881
$
77,240
54
%
$
296,947
$
282,278
5
%
Operating income (loss)
6,415
(5,894
)
nm
(3,093
)
(32,526
)
(90
%)
EBITDA (1)
27,015
17,869
51
%
63,448
61,658
3
%
Cashflow
26,253
19,810
33
%
58,047
55,514
5
%
Net income (loss)
4,279
(4,602
)
nm
(1,464
)
(28,723
)
(95
%)
Attributable to shareholders
4,278
(4,618
)
nm
(1,409
)
(28,711
)
(95
%)
Per Share Data (Diluted)
EBITDA (1)
$
0.60
$
0.40
50
%
$
1.41
$
1.37
3
%
Cashflow
$
0.58
$
0.44
32
%
$
1.29
$
1.23
5
%
Attributable to shareholders:
Net income (loss)
$
0.09
$
(0.10
)
nm
$
(0.03
)
$
(0.64
)
(95
%)
Common shares (000’s)(4)
Basic
44,921
45,081
0
%
44,737
45,083
(1
%)
Diluted
45,164
45,081
0
%
44,965
45,083
0
%
September 30
December 31
Financial Position at
2021
2020
Change
Total Assets
$
822,898
$
849,579
(3
%)
Long-Term Debt and Lease Liabilities (excluding current portion)
201,967
238,937
(15
%)
Working Capital (2)
138,383
138,940
0
%
Net Debt (3)
63,584
99,997
(36
%)
Shareholders’ Equity
497,356
510,987
(3
%)
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, 2021 reflect improving industry conditions in North America and lower Australian activity levels as compared to the third quarter of 2020. $4.5 million was recorded during the third quarter of 2021 under various COVID-19 relief programs compared to $7.4 million of COVID-19 relief received in the third quarter of 2020.
Contract Drilling Services (“CDS”)
Three months ended September 30
Nine months ended September 30
2021
2020
Change
2021
2020
Change
Revenue
$
43,334
$
16,178
168
%
$
97,645
$
73,373
33
%
EBITDA (1)
$
11,392
$
3,142
263
%
$
22,368
$
13,224
69
%
EBITDA (1) as a % of revenue
26
%
19
%
37
%
23
%
18
%
28
%
Operating days(2)
2,221
717
210
%
4,994
3,323
50
%
Canada
1,318
372
254
%
2,965
1,901
56
%
United States
610
127
380
%
1,378
495
178
%
Australia
293
218
34
%
651
927
(30
%)
Revenue per operating day(2), dollars
$
19,511
$
22,563
(14
%)
$
19,552
$
22,080
(11
%)
Canada
16,187
14,231
14
%
16,180
16,324
(1
%)
United States
19,269
18,307
5
%
19,144
20,487
(7
%)
Australia
34,969
39,261
(11
%)
35,774
34,737
3
%
Utilization
25
%
8
%
213
%
19
%
12
%
58
%
Canada
19
%
5
%
280
%
14
%
9
%
56
%
United States
51
%
11
%
364
%
39
%
11
%
255
%
Australia
64
%
47
%
36
%
48
%
68
%
(29
%)
Rigs, average for period
95
98
(3
%)
97
103
(6
%)
Canada
77
80
(4
%)
79
81
(2
%)
United States
13
13
–
13
17
(24
%)
Australia
5
5
–
5
5
–
(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 stand-by days.
Third quarter drilling activity in North America was higher in 2021 compared to the prior year. Canadian industry activity levels continued to recover from the historic lows of 2020 and market share gains in the United States drove a significant year over year increase in operating days despite a more muted recovery in United States drilling activity relative to Canada. In Australia, third quarter operating days increased in 2021 compared to 2020 as two drilling rigs returned to service following the completion of recertifications and upgrades. One drilling rig was removed from service in Australia during the third quarter of 2021 to complete necessary recertifications and upgrades and is expected to return to service in the first quarter of 2022. Despite a decrease in revenue per operating day arising from year over year changes in the geographic revenue mix and mix of equipment operating, third quarter CDS segment revenue increased by 168% in 2021 compared to 2020. Negatively impacting third quarter 2021 CDS segment results was $0.5 million of non-recurring equipment reactivation costs as several idle drilling rigs were put back into service.
Rentals and Transportation Services (“RTS”)
Three months ended September 30
Nine months ended September 30
2021
2020
Change
2021
2020
Change
Revenue
$
12,313
$
5,939
107
%
$
26,101
$
27,554
(5
%)
EBITDA (1)
$
4,638
$
2,544
82
%
$
9,928
$
7,275
36
%
EBITDA (1) as a % of revenue
38
%
43
%
(12
%)
38
%
26
%
46
%
Revenue per utilized piece of equipment, dollars
$
9,452
$
7,463
19
%
$
26,023
$
28,842
(10
%)
Pieces of rental equipment
9,410
10,640
(12
%)
9,410
10,640
(12
%)
Canada
8,567
9,710
(12
%)
8,567
9,710
(12
%)
United States
843
930
(9
%)
843
930
(9
%)
Rental equipment utilization
13
%
7
%
86
%
10
%
9
%
11
%
Canada
13
%
7
%
86
%
9
%
7
%
29
%
United States
19
%
6
%
217
%
14
%
21
%
(33
%)
Heavy trucks
80
87
(8
%)
80
87
(8
%)
Canada
56
62
(10
%)
56
62
(10
%)
United States
24
25
(4
%)
24
25
(4
%)
(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 increased as compared to the same period in 2020 due to higher equipment utilization in Canada and the United States. Canadian activity was bolstered by the commencement of several projects that were delayed during the first half of 2021 due to COVID-19 restrictions unrelated to the Company’s operations or personnel. The decrease in the third quarter EBITDA margin percentage as compared to prior year same quarter was due primarily to the mix of equipment operating, equipment reactivation expenses and the receipt of less COVID-19 relief funds.
Compression and Process Services (“CPS”)
Three months ended September 30
Nine months ended September 30
2021
2020
Change
2021
2020
Change
Revenue
$
38,188
$
32,282
18
%
$
106,001
$
103,238
3
%
EBITDA (1)
$
5,843
$
5,722
2
%
$
17,100
$
16,838
2
%
EBITDA (1) as a % of revenue
15
%
18
%
(17
%)
16
%
16
%
–
Horsepower of equipment on rent at period end
28,605
35,400
(19
%)
28,605
35,400
(19
%)
Canada
12,080
17,300
(30
%)
12,080
17,300
(30
%)
United States
16,525
18,150
(9
%)
16,525
18,150
(9
%)
Rental equipment utilization during the period (HP)(2)
53
%
66
%
(20
%)
47
%
67
%
(30
%)
Canada
37
%
52
%
(29
%)
33
%
53
%
(38
%)
United States
78
%
94
%
(17
%)
71
%
97
%
(27
%)
Sales backlog at period end, $ million
$
95.5
$
37.0
158
%
$
95.5
$
37.0
158
%
(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 increase in the CPS segment’s third quarter revenue was due primarily to higher fabrication sales and increased equipment overhaul activity. Compression rental fleet utilization continued to recover during the third quarter of 2021 but remained below prior year levels. Ongoing cost management and increased overhead absorption from higher fabrication activity contributed to a year over year increase in third quarter EBITDA. Third quarter EBITDA margin was lower on a year over year basis due to a $0.8 million provision for bad debt and an increased relative contribution of lower margin fabrication revenue to CPS segment revenue. The fabrication sales backlog continued to strengthen during the third quarter of 2021, increasing by another $38.0 million, or 66%, compared to the $57.5 million backlog at June 30, 2021.
Well Servicing (“WS”)
Three months ended September 30
Nine months ended September 30
2021
2020
Change
2021
2020
Change
Revenue
$
25,046
$
22,841
10
%
$
67,200
$
78,113
(14
%)
EBITDA (1)
$
6,494
$
7,581
(14
%)
$
16,313
$
21,071
(23
%)
EBITDA (1) as a % of revenue
26
%
33
%
(21
%)
24
%
27
%
(11
%)
Service hours(2)
29,927
26,069
15
%
81,060
89,096
(9
%)
Canada
15,076
9,226
63
%
40,501
28,969
40
%
United States
4,147
1,896
119
%
10,206
8,897
15
%
Australia
10,704
14,947
(28
%)
30,353
51,230
(41
%)
Revenue per service hour(2), dollars
$
837
$
876
(4
%)
$
829
$
877
(5
%)
Canada
719
615
17
%
682
643
6
%
United States
716
687
4
%
691
733
(6
%)
Australia
1,050
1,061
(1
%)
1,072
1,034
4
%
Utilization(3)
31
%
23
%
35
%
28
%
26
%
8
%
Canada
29
%
18
%
61
%
26
%
19
%
37
%
United States
32
%
15
%
113
%
27
%
23
%
17
%
Australia
40
%
56
%
(29
%)
39
%
65
%
(40
%)
Rigs, average for period
83
83
–
83
83
–
Canada
57
57
–
57
57
–
United States
14
14
–
14
14
–
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.
WS segment revenue increased in the third quarter of 2021 as compared to 2020 due to higher production activity levels in North America and increased well abandonment activity in Canada. The year over year decrease in EBITDA and EBITDA margin for the three and nine months ended September 30, 2021 was primarily due to decreased activity in Australia and increased North American operating costs that were not fully offset by price increases.
Corporate
Total Energy continued to focus on the safe and efficient operation of its business and the preservation of its balance sheet strength and financial liquidity during the third quarter of 2021. Bank debt was reduced by $7.6 million, or 4%, during the quarter. The Company also purchased 582,900 common shares during the quarter under its normal course issuer bid at an average price of $4.27 (including commissions). There were 44,000,000 common shares outstanding at September 30, 2021.
The Company exited the third quarter of 2021 with $138.4 million of positive working capital (including $25.6 million of cash) and $120 million of available credit under its $255 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at September 30, 2021 was 2.80%.
Outlook
Total Energy’s diversified geographic and business exposure provided a measure of stability following the outbreak of the COVID-19 pandemic in March of 2020 and contributed to the generation of significant free cash flow during very difficult industry conditions. A substantial portion of the Company’s free cash flow generated since the 2020 collapse in oil prices has been directed towards debt repayment, with bank debt (net of cash) being reduced from January 1, 2020 to September 30, 2021 by $87.4 million, or 34%. Such diversity also provides Total Energy with significant leverage to recovering conventional energy industry activity levels, including increased oilfield abandonment and reclamation activity, as evidenced by the Company’s return to profitability in the third quarter of 2021.
In response to increasing demand for drilling rigs and compression rental equipment, Total Energy has increased its 2021 capital expenditure budget by $6.5 million to $33.2 million. Included in the 2021 capital budget is $6.2 million of light duty vehicle capital leases. Excluding capital leases, $17.2 million of capital expenditures have been made to September 30, 2021 and the Company intends to fund the remaining $9.8 million of budgeted 2021 capital expenditures with cash on hand.
While oil and natural gas prices remain elevated and activity levels continue to modestly improve from the historic lows of 2020, activity levels remain subdued relative to prior periods of similarly high oil and natural gas prices. At current commodity prices, Total Energy expects that industry activity levels in all geographies will continue to increase albeit at a measured pace, due in part to the pressure on many oil and natural gas producers to curtail reinvestment. A reduction in energy service industry capacity will serve to offset muted capital expenditure programs as personnel and equipment shortages begin to materialize, particularly in Canada where industry conditions have been challenging for several years.
Given the unique and uncertain environment currently faced by the energy industry, Total Energy remains focused on the safe and efficient operation of its business, debt repayment, disciplined capital deployment and enhancing shareholder returns, including through share repurchases under its recently renewed normal course issuer bid. Total Energy also continues to pursue opportunities to leverage its technologies, expertise and equipment to pursue new business opportunities, including in the areas of alternative resource extraction and emissions reduction and sequestration.
Conference Call
At 9:00 a.m. (Mountain Time) on November 9, 2021 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 (800) 319-4610 or (416) 915-3239. 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 9, 2021 by dialing (855) 669-9658 (passcode 7881).
Selected Financial Information
Selected financial information relating to the three and nine months ended September 30, 2021 and 2020 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 the Company’s 2020 Annual report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
September 30
December 31
2021
2020
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
25,569
$
22,996
Accounts receivable
90,240
73,373
Inventory
99,225
95,586
Prepaid expenses and deposits
8,746
6,876
Income taxes receivable
1,467
1,287
Current portion of lease asset
473
566
225,720
200,684
Property, plant and equipment
584,589
636,996
Income taxes receivable
7,070
7,070
Deferred income tax asset
970
57
Lease asset
496
719
Goodwill
4,053
4,053
$
822,898
$
849,579
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
63,208
$
46,410
Deferred revenue
17,588
6,365
Current portion of lease liabilities
3,945
6,417
Current portion of long-term debt
2,596
2,552
87,337
61,744
Long-term debt
193,562
230,517
Lease liabilities
8,405
8,420
Deferred tax liability
36,238
37,911
Shareholders’ equity:
Share capital
277,121
284,077
Contributed surplus
5,542
4,966
Accumulated other comprehensive loss
(26,737
)
(18,736
)
Non-controlling interest
574
629
Retained earnings
240,856
240,051
497,356
510,987
$
822,898
$
849,579
Consolidated Statements of Comprehensive Income (Loss)
(in thousands of Canadian dollars except per share amounts)
(unaudited)
Three months ended
Nine months ended
September 30
September 30
2021
2020
2021
2020
Revenue
$
118,881
$
77,240
$
296,947
$
282,278
Cost of services
85,255
54,447
219,435
207,613
Selling, general and administration
7,254
5,691
19,862
22,032
Other (income) expense
(474
)
579
(2,654
)
(6,813
)
Share-based compensation
186
21
576
690
Depreciation
20,245
22,396
62,821
91,282
Operating income (loss)
6,415
(5,894
)
(3,093
)
(32,526
)
Gain on sale of property, plant and equipment
355
1,367
3,720
2,902
Finance costs, net
(1,675
)
(2,106
)
(5,254
)
(8,063
)
Net income (loss) before income taxes
5,095
(6,633
)
(4,627
)
(37,687
)
Current income tax expense (recovery)
(122
)
14
(577
)
2,307
Deferred income tax expense (recovery)
938
(2,045
)
(2,586
)
(11,271
)
Total income tax expense (recovery)
816
(2,031
)
(3,163
)
(8,964
)
Net income (loss)
$
4,279
$
(4,602
)
$
(1,464
)
$
(28,723
)
Net income (loss) attributable to:
Shareholders of the Company
$
4,278
$
(4,618
)
$
(1,409
)
$
(28,711
)
Non-controlling interest
1
16
(55
)
(12
)
Income (loss) per share
Basic
$
0.10
$
(0.10
)
$
(0.03
)
$
(0.64
)
Diluted
0.09
(0.10
)
(0.03
)
(0.64
)
Condensed Interim Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
Three months ended
Nine months ended
September 30
September 30
2021
2020
2021
2020
Net income (loss) for the period
$
4,279
$
(4,602
)
$
(1,464
)
$
(28,723
)
Foreign currency translation
3,121
(2,206
)
(8,001
)
2,636
Deferred tax effect
–
(125
)
–
(126
)
Total other comprehensive income (loss) for the period
3,121
(2,331
)
(8,001
)
2,510
Total comprehensive income (loss)
$
7,400
$
(6,933
)
$
(9,465
)
$
(26,213
)
Total comprehensive income (loss) attributable to:
Shareholders of the Company
$
7,399
$
(6,949
)
$
(9,410
)
$
(26,201
)
Non-controlling interest
1
16
(55
)
(12
)
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
Three months ended
Nine months ended
September 30
September 30
2021
2020
2021
2020
Cash provided by (used in):
Operations:
Net income (loss) for the period
$
4,279
$
(4,602
)
$
(1,464
)
$
(28,723
)
Add (deduct) items not affecting cash:
Depreciation
20,245
22,396
62,821
91,282
Share-based compensation
186
21
576
690
Gain on sale of property, plant and equipment
(355
)
(1,367
)
(3,720
)
(2,902
)
Finance costs
1,675
2,106
5,254
8,063
Unrealized (gain) loss on foreign currencies translation
(474
)
1,015
(2,654
)
(6,813
)
Current income tax expense (recovery)
(122
)
14
(577
)
2,307
Deferred income tax expense (recovery)
938
(2,045
)
(2,586
)
(11,271
)
Income taxes (paid) recovered
(119
)
2,272
397
2,881
Cashflow
26,253
19,810
58,047
55,514
Changes in non-cash working capital items:
Accounts receivable
(17,132
)
1,599
(17,291
)
44,698
Inventory
(6,431
)
4,236
(4,302
)
3,564
Prepaid expenses and deposits
(3,911
)
(943
)
(1,870
)
5,384
Accounts payable and accrued liabilities
7,984
(8,398
)
15,975
(46,590
)
Deferred revenue
6,531
(1,913
)
11,223
4,326
Cash provided by operating activities
13,294
14,391
61,782
66,896
Investing:
Purchase of property, plant and equipment
(4,077
)
(2,108
)
(17,230
)
(12,298
)
Proceeds on disposal of property, plant and equipment
711
2,125
9,156
5,468
Changes in non-cash working capital items
(709
)
(810
)
342
(2,808
)
Cash used in investing activities
(4,075
)
(793
)
(7,732
)
(9,638
)
Financing:
Advances on long-term debt
–
–
–
29,796
Repayment of long-term debt
(7,636
)
(5,622
)
(36,911
)
(63,964
)
Repayment of lease liabilities
(1,088
)
(2,090
)
(4,710
)
(6,354
)
Dividends to shareholders
–
–
–
(2,710
)
Repurchase of common shares
(2,489
)
–
(4,742
)
(427
)
Partnership distributions
–
–
–
(125
)
Interest paid
(1,668
)
(2,130
)
(5,114
)
(8,494
)
Cash used in financing activities
(12,881
)
(9,842
)
(51,477
)
(52,278
)
Change in cash and cash equivalents
(3,662
)
3,756
2,573
4,980
Cash and cash equivalents, beginning of period
29,231
21,097
22,996
19,873
Cash and cash equivalents, end of period
$
25,569
$
24,853
$
25,569
$
24,853
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 labour 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 labour 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, 2021 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate (1)
Total
Drilling
Transportation
and Process
Servicing
Services
Services
Services
Revenue
$
43,334
$
12,313
$
38,188
$
25,046
$
–
$
118,881
Cost of services
31,089
6,288
30,475
17,403
–
85,255
Selling, general and administration
856
1,487
2,129
1,141
1,641
7,254
Other income
–
–
–
–
(474
)
(474
)
Share-based compensation
–
–
–
–
186
186
Depreciation (2)
9,038
4,917
2,353
3,658
279
20,245
Operating income (loss)
2,351
(379
)
3,231
2,844
(1,632
)
6,415
Gain (loss) on sale of property, plant and equipment
3
100
259
(8
)
1
355
Finance costs
(1
)
(13
)
(69
)
(5
)
(1,587
)
(1,675
)
Net income (loss) before income taxes
2,353
(292
)
3,421
2,831
(3,218
)
5,095
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
322,629
186,198
214,807
95,598
3,666
822,898
Total liabilities
57,587
9,908
43,168
5,244
209,635
325,542
Capital expenditures
2,818
61
910
288
–
4,077
Canada
United States
Australia
Other
Total
Revenue
$
70,832
$
26,492
$
21,557
$
–
$
118,881
Non-current assets (3)
386,720
141,153
61,265
–
589,138
As at and for the three months ended September 30, 2020 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate (1)
Total
Drilling
Transportation
and Process
Servicing
Services
Services
Services
Revenue
$
16,178
$
5,939
$
32,282
$
22,841
$
–
$
77,240
Cost of services
12,251
2,591
25,360
14,245
–
54,447
Selling, general and administration
1,094
1,180
1,582
1,027
808
5,691
Other expense
–
–
–
–
579
579
Share-based compensation
–
–
–
–
21
21
Depreciation (2)
9,950
5,809
2,451
3,994
192
22,396
Operating income (loss)
(7,117
)
(3,641
)
2,889
3,575
(1,600
)
(5,894
)
Gain on sale of property, plant and equipment
309
376
382
12
288
1,367
Finance costs
(51
)
(15
)
(92
)
(7
)
(1,941
)
(2,106
)
Net income (loss) before income taxes
(6,859
)
(3,280
)
3,179
3,580
(3,253
)
(6,633
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
322,464
204,812
221,112
102,297
23,206
873,891
Total liabilities
54,146
11,182
30,165
5,428
255,903
356,824
Capital expenditures
521
15
855
717
–
2,108
Canada
United States
Australia
Other
Total
Revenue
$
34,493
$
18,237
$
24,510
$
–
$
77,240
Non-current assets (3)
432,917
163,896
67,090
–
663,903
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2020 Financial Statements for further details. (3) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the nine months ended September 30, 2021 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate (1)
Total
Drilling
Transportation
and Process
Servicing
Services
Services
Services
Revenue
$
97,645
$
26,101
$
106,001
$
67,200
$
–
$
296,947
Cost of services
72,359
13,989
85,631
47,456
–
219,435
Selling, general and administration
3,201
4,015
4,753
3,470
4,423
19,862
Other income
–
–
–
–
(2,654
)
(2,654
)
Share-based compensation
–
–
–
–
576
576
Depreciation (2)
28,364
15,477
7,025
11,259
696
62,821
Operating income (loss)
(6,279
)
(7,380
)
8,592
5,015
(3,041
)
(3,093
)
Gain on sale of property, plant and equipment
283
1,831
1,483
39
84
3,720
Finance costs
(10
)
(59
)
(221
)
(16
)
(4,948
)
(5,254
)
Net income (loss) before income taxes
(6,006
)
(5,608
)
9,854
5,038
(7,905
)
(4,627
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
322,629
186,198
214,807
95,598
3,666
822,898
Total liabilities
57,587
9,908
43,168
5,244
209,635
325,542
Capital expenditures
12,557
341
3,491
841
–
17,230
Canada
United States
Australia
Other
Total
Revenue
$
173,125
$
67,695
$
56,125
$
2
$
296,947
Non-current assets (3)
386,720
141,153
61,265
–
589,138
As at and for the nine months ended September 30, 2020 (unaudited, in thousands of Canadian dollars)
Contract
Rentals and
Compression
Well
Corporate (1)
Total
Drilling
Transportation
and Process
Servicing
Services
Services
Services
Revenue
$
73,373
$
27,554
$
103,238
$
78,113
$
–
$
282,278
Cost of services
56,382
16,367
81,681
53,183
–
207,613
Selling, general and administration
4,832
4,824
5,211
3,875
3,290
22,032
Other income
–
–
–
–
(6,813
)
(6,813
)
Share-based compensation
–
–
–
–
690
690
Depreciation(2)
54,475
17,842
7,122
11,284
559
91,282
Operating income (loss)
(42,316
)
(11,479
)
9,224
9,771
2,274
(32,526
)
Gain on sale of property, plant and equipment
1,065
912
492
16
417
2,902
Finance costs
(129
)
(57
)
(289
)
(25
)
(7,563
)
(8,063
)
Net income (loss) before income taxes
(41,380
)
(10,624
)
9,427
9,762
(4,872
)
(37,687
)
Goodwill
–
2,514
1,539
–
–
4,053
Total assets
322,464
204,812
221,112
102,297
23,206
873,891
Total liabilities
54,146
11,182
30,165
5,428
255,903
356,824
Capital expenditures
2,540
857
6,934
1,955
12
12,298
Canada
United States
Australia
Other
Total
Revenue
$
130,698
$
65,398
$
86,129
$
53
282,278
Non-current assets (3)
432,917
163,896
67,090
–
663,903
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2020 Financial Statements for further details. (3) 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 before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income, 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.
(4)
Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 5 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.
CALGARY, Alberta, Oct. 07, 2021 (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 expire on October 11, 2022. 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 44,000,000 Shares issued and outstanding. In connection with the normal course issuer bid, which will commence on October 12, 2021, Total Energy may purchase up to 2,200,000 Shares, being 5% of the total number of outstanding Shares, during the period from October 12, 2021 to October 11, 2022, subject to a maximum daily purchase limit of 7,173 Shares based on an average daily trading volume for the last six calendar months of 28,695 Shares.
On October 7, 2020, Total Energy announced its intention to undertake a normal course issuer bid, which remained in effect during the 12-month period ending on October 8, 2021. Under that normal course issuer bid, as of October 7, 2021 Total Energy purchased a total of 1,183,200 Shares at an average price of $4.28 per Share.
Capital stewardship remains a core value at Total Energy. Since its inception, Total Energy has returned approximately $235 million to its owners through dividends, distributions and share buybacks, including $5.47 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”.
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