U.S. Markets closed

New West Energy Services Inc. Announces Second Quarter 2019 Financial Results

CALGARY , Aug. 29, 2019 /CNW/ - New West Energy Services Inc. (TSX Venture: NWE), an oil and gas and environmental services company focused on Western Canada , today announced its second quarter 2019 financial results.

New West Energy Services Inc. (CNW Group/New West Energy Services Inc.)

FINANCIAL HIGHLIGHTS

  • Revenue was $5,980,094 in the six months ended June 30, 2019 compared to $10,530,892 in the same period last year, and $1,679,293 in the three months ended June 30, 2019 compared to $2,622,753 in the same period last year. This significant reduction was mostly due to NWE ceasing its fluid transportation operations in Grande Prairie as a result of a significant decrease in revenue associated with this segment stemming from the continuing decline in completions activity in northwestern Alberta .

    As previously announced, on August 7, 2019 , NWE completed a restructuring of its operations whereby NWE's then operating subsidiary, BearStone Environmental Solutions Inc., sold to NWE's new operating subsidiary, Silverpoint Energy Services Inc., all of the equipment associated with its vacuum and water truck services business operated out of Medicine Hat .

    As consideration for the equipment acquisition, Silverpoint assumed $2,733,911 of BearStone's current secured indebtedness, subject to downward adjustment under certain conditions. Silverpoint also borrowed an additional $315,000 to pay wages to the closing date of those BearStone employees who are being hired by Silverpoint. The total indebtedness is for a term of five years.

    Silverpoint also secured a revolving operating line of credit of up to $1.5 million , based upon eligible accounts and other considerations, to be used for general corporate purposes. Silverpoint may draw down on, and repay, the loan from time to time as needed. The line of credit is also for a term of five years.

    Going forward, Silverpoint will be NWE's sole operating subsidiary and will focus on vacuum and water truck services out of Medicine Hat , as well as environmental services out of the company's headquarters in Calgary .

    Pursuant to an order of the Court of Queen's Bench in Alberta , KPMG was appointed receiver over the remaining assets and undertakings of BearStone. The Court also approved the sale by BearStone to Silverpoint of the above-mentioned equipment.

    Silverpoint also assumed approximately $430,000 of BearStone's indebtedness towards other third-party lenders in exchange for Sliverpoint acquiring certain of BearStone's drilling services equipment.

  • Gross margin was 29% in the six months ended June 30, 2019 compared to 16% in the same period last year, and 29% in the three months ended June 30, 2019 compared to 10% in the same period last year.  The environmental and vacuum and water truck services operating in the drilling services sector realized an increase in gross margins offsetting a decrease in gross margin from the fluid transportation services operating in the completions and production sectors.

  • General and administrative expenses were $1,824,565 in the six months ended June 30, 2019 compared to $1,876,126 in same period last year, and $898,291 in the three months ended June 30, 2019 compared to $932,012 in same period last year, reflecting a consistency between reporting periods.

  • Normalized EBITDAC was negative $80,534 in the six months ended June 30, 2019 compared to negative $204,780 in the same period last year, and negative $416,407 in the three months ended June 30, 2019 compared to negative $642,590 in the same period last year.



For the three months ended June 30,


 For the three months ended June 30,  


2019


2018


Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total


Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total












$

$

$

$


$

$

$

$

Revenue

1,248,759

430,534

-

1,679,293


2,088,190

534,563

-

2,622,753

Direct costs

952,872

244,537

-

1,197,409


2,046,952

322,246

-

2,369,198

Gross margin

295,887

185,997

-

481,884


41,238

212,317

-

253,555

G & A expenses

482,655

333,906

81,730

898,291


497,206

346,388

88,418

932,012

Share base pmts

-

-

-

-


-

-

16,511

16,511

Finance charges

130,713

12,632

45,341

188,686


119,104

16,150

23,909

159,163

Depreciation

331,258

-

-

331,258


365,699

-

-

365,699

Disposal of assets

26,524

-

-

26,524


(6,733)

-

-

(6,733)

Net loss before tax

(675,263)

(160,541)

(127,071)

(962,875)


(934,038)

(150,221)

(128,838)

(1,213,097)

Total assets 

7,810,883

558,940

-

8,369,823


10,843,330

534,160

31,997

11,409,487

EBITDAC*

(186,768)

(147,909)

(81,730)

(416,407)


(420,101)

(134,071)

(88,418)

(642,590)






















 For the six months ended June 30,  


For the six months ended June 30,  


2019


2018


Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total


Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total












$

$

$

$


$

$

$

$

Revenue

4,350,688

1,629,406

-

5,980,094


8,354,010

2,176,882

-

10,530,892

Direct costs

3,304,954

931,109

-

4,236,063


7,410,917

1,484,496

-

8,895,413

Gross margin

1,045,734

698,297

-

1,744,031


943,093

692,386

-

1,635,479

G & A expenses

999,258

678,266

147,041

1,824,565


995,958

717,777

162,391

1,876,126

Share base pmts

-

-

-

-


-

-

16,511

16,511

Finance charges

244,646

32,507

90,194

367,347


297,226

32,455

47,543

377,224

Depreciation

650,838

-

-

650,838


736,781

-

-

736,781

Disposal of assets

26,524

-

-

26,524


71,881

-

-

71,881

Net loss before tax

(875,532)

(12,476)

(237,235)

(1,125,243)


(1,158,753)

(57,846)

(226,445)

(1,443,044)

Total assets 

7,810,883

558,940

-

8,369,823


10,843,330

534,160

31,997

11,409,487

EBITDAC*

46,476

20,031

(147,041)

(80,534)


(16,998)

(25,391)

(162,391)

(204,780)


* Normalized EBITDAC is earnings from continuing operations before interest, taxes, depreciation, amortization and share-based payments and is a measure of NWE's operating profitability. The calculation is further adjusted to normalize EBITDAC by removing any non-reoccurring transactions that are not in the normal course of operations.


** Copies of NWE's financial statements, MD&A and other public filings are available under the company's profile on SEDAR at www.sedar.com.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Information

Certain statements in this news release may constitute "forward-looking information" within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information and financial outlook.  Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions.  Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations or future actions.  Forward-looking information in this news release includes, without limitation, statements with respect to: the use of proceeds of its loans; the use of the acquired equipment; planned changes in NWE's business and revenues; the competitive environment in which NWE operates; and the assessment of future plans and operations.  Actual events or results may differ materially.  The forward-looking information in this news release is based on assumptions which includes, but is not limited to: NWE realizing the expected benefits of its loans and acquired equipment; the general state of the economy and the oil and gas industry not worsening; NWE not losing any key personnel; NWE sustaining or increasing their level of revenues and EBITDAC  NWE growing its businesses long term and managing its growth; NWE complying with existing regulations and not becoming subject to more stringent regulations; and, NWE's insurance being sufficient to cover losses that may occur as a result of its operations.  The forward-looking information in this news release is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information.  The factors which could cause results to differ from current expectations include, but are not limited to: failure to realize the expected benefits of its loans and acquired equipment; potential undisclosed liens associated with the acquired equipment; NWE's results being dependent upon the general state of the economy and the oil and gas industry; NWE being dependent on key personnel, the loss of which could harm its business; NWE may not be able to sustain or increase their revenues or EBITDAC; NWE may be unable to grow its business long term or to manage any growth; NWE may be unable to integrate the acquired equipment into its business; competition in NWE's markets may lead to reduced revenues and EBITDAC; NWE may fail to comply with existing regulations or become subject to more stringent regulations; NWE's insurance may be insufficient to cover losses that may occur as a result of NWE's operations; the market price of NWE's common shares will fluctuate; and, there is a possibility of dilution of existing holders of NWE's common shares due to future financings or acquisitions.  Although NWE has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements in this news release, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of NWE.  Accordingly, readers should not place undue reliance on the forward-looking information in this news release.  The forward-looking information is made as of the date of this news release, and NWE does not assume any obligation to publicly update or revise such forward-looking information to reflect new information, subsequent or otherwise, except as may be required by applicable law.  The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.

SOURCE New West Energy Services Inc.


View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2019/29/c9847.html