Cordy Oilfield Services Inc.

Cordy Oilfield Services Inc.

May 29, 2009 17:46 ET

Cordy Announces Appointment of Everett Barnes as Chief Financial Officer, 2009 First Quarter Results and Resignation of Director

CALGARY, ALBERTA--(Marketwire - May 29, 2009) - Cordy Oilfield Services Inc. ("Cordy" and or the "Company") (TSX VENTURE:CKK) is pleased to announce that Everett Barnes, who has served as Cordy's Chief Financial Officer on an interim basis since July 2008, has been appointed as Cordy's Chief Financial Officer. Mr. Barnes is aChartered Accountant and has been with Cordy since September 2007.

Cordy also announces its consolidated operating and financial results for the first quarter ended March 31, 2009.


($ millions, except per share amounts) 2009 2008 Change
Operating Results for the Three Months Ended
March 31
Revenue 16.1 27.7 (11.6)
EBITDAS (1) 1.1 2.7 (1.6)
Net loss (1.2) (0.5) (0.7)
Loss per share - basic & diluted (0.01) (0.01) (0.00)
Financial Position as at March 31, 2009 and
December 31, 2008
Cash and equivalents 5.7 5.4 0.3
Total assets 97.4 105.2 (7.8)
Total Debt 18.4 20.5 (2.1)
Total Liabilities 29.4 36.1 (6.7)
Shareholders' equity 68.0 69.1 (1.1)
Cash Flows for the Three Months Ended
March 31
Operating Cash Flows 2.1 1.6 0.5
Financing Cash Flows (2.1) 0.2 (2.3)
Investing Cash Flows 0.3 (2.6) 2.9
(1) Earnings before interest, taxes, depreciation, amortization and
impairment and stock based compensation ("EBITDAS"). Refer to the "Non
GAAP Measures" section for further details


In response to the economic downturn management has focused on reducing costs and capital expenditures in 2009. Costs reduction efforts have yielded a $1.2 million or 34% decrease in general and administrative expenses and a $2.6 million or 98% decrease in capital expenditures in the first quarter of 2009 compared to the same period in 2008. The Company was also able to decrease its total debt outstanding, through its regularly scheduled payments, by $2.1 million representing 10% of the balance outstanding at December 31, 2008 and increase cash reserves by $0.3 million.

Though Cordy has diversified from the oil and gas industry, to avoid its cyclical and seasonal nature, the winter months are dominated by oilfield activity due to the climate in western Canada. Rig counts indicate the level of drilling activity and in the first quarter of 2009 there were approximately 36% fewer rig drilling days in western Canada compared to the same period in 2008. This significant decline in drilling activity in western Canada has resulted in oil and gas services companies, including Cordy, reducing rates which in turn reduce revenues and profitability. Rate cuts were achieved largely by creating efficiencies, restructuring and reducing the Company's own expenses. The combination of rate cuts and the fixed nature of certain of the Company's operating costs resulted in decreased operating margins compared to the prior year. Company revenues are down approximately 42% as compared to 2008 and EBITDAS as a percentage of revenue for the first quarter of 2009 was 7% compared to 10% during the same period in 2008.

The Company generated $2.1 million in cash from operating activities in the first quarter of 2009 and at March 31, 2009, had a positive working capital position, excluding current portions of debt, of $27.2 million compared to $18.4 million in total debt. The Company's strong balance sheet is a valuable asset in this economy. Management has intentionally kept debt levels low to survive the boom and bust cycles in the oil and gas industry, maintain investor and stakeholder confidence and to afford the flexibility to take advantage of investment opportunities quickly.


While uncertainty continues, cautious optimism is beginning to replace anxiety as oil prices climb above $50 per barrel and housing markets begin to stabilize. Though activity levels are predicted to remain below 2008 levels for the remainder of 2009, management is confident that the cost reductions and restructuring activities being pursued will contribute positively to the viability of the Company through this period of uncertainty. The operational flexibility and cost efficiencies achieved during this period of decreased activity will lead to the Company being stronger and more competitive in the long term.

Due to the seasonality of the oil and gas services industry and the wet weather that comes with the spring season, the second quarter typically has the lowest levels of activity. As the summer construction season approaches, management will closely monitor the level of work available and constantly assess whether further restructuring and cost reductions are necessary. Management will continue to pursue its strategy of reducing debt levels, through scheduled debt repayments while minimizing capital expenditures in the second quarter of 2009.

Additional information on Cordy is available on our website or on SEDAR at

Cordy also announces that George Armoyan has resigned as a director.

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning Cordy's expectations of future cash flow and earnings. The forward-looking statements and information are based on certain key expectations and assumptions made by Cordy, including expectations and assumptions concerning fluctuations in the level of oil and gas industry capital expenditures, Cordy's ability to integrate acquired businesses and complete strategic acquisitions of additional business and other factors that affect demand for Cordy's products and services. Although Cordy believe that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Cordy can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause Cordy's actual results and experience to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, risks associated with the oilfield services sector (such as demand, pricing and terms for oilfield services; current and expected oil and gas prices; competition; equipment and material costs; exploration and development costs and delays; reserves discovery rates; pipeline and transportation capacity; weather, health, safety and environmental risks), integration of acquisitions, access to capital markets, interest and currency exchange rates, technological developments, political and economic conditions and Cordy's ability to attract and retain key personnel. Additional information on these and other factors is available in continuous disclosure materials filed by Cordy with Canadian securities regulators. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. Cordy undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Neither 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.

Contact Information

  • For general information:
    Cordy Oilfield Services Inc.
    David Mullen, Chairman and CEO
    (403) 266-2067
    (403) 266-2087 (FAX)
    For investor relations information:
    Cordy Oilfield Services Inc.
    David Orr, Senior Vice President
    (403) 266-2067
    (403) 266-2087 (FAX)