Ceiba Energy Services Announces Record First Quarter Results

CALGARY, ALBERTA--(Marketwired - June 2, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Ceiba Energy Services Inc. ("Ceiba Energy" or the "Company") (TSX VENTURE:CEB) has filed its Financial Statements and related Management's Discussion and Analysis for the quarter and year ended March 31, 2014 which are available on the Company's profile at www.sedar.com.

The Company is pleased to announce it has achieved record revenues for the quarter and positive adjusted EBITDA in the three months ended March 31, 2014 as compared to negative adjusted EBITDA for the same period in 2013. The revenue recorded in the first quarter of 2014 increased by $498,866, or approximately 67% over reported revenues for the same period in 2013. The Company continues to show improvement on financials, increasing gross margin by $286,793 over Q1 2013.

Results of Operations

	Three months ended March 31
	2014			2013
Revenue	$	1,243,577		$	744,711
Operating expenses	$	680,461		$	468,388
Gross margin		563,116			276,323
Gross margin %		45	%		37	%

	Three months ended March 31
	2014		2013
Total Income (Loss) and Comprehensive Income (Loss) for the Period	(748,157	)	(957,270	)
Add back:
Finance Costs	476,763		243,460
Depreciation	251,754		67,171
Deferred Tax Recovery	(387,000	)	-
EBITDA	(406,640	)	(646,639	)
Add back:
Stock-based Compensation	122,094		273,695
Accretion	45,422		(29,910	)
Transaction costs	254,406		38,438
Adjusted EBITDA	15,282		(364,416	)

2014 First Quarter Highlights

• Overall, the Company continued to successfully execute its growth strategy, processing a record 76,800 m³ of fluid in the quarter, an increase of 44,400 m³ (137%) over the same period in the previous year and 29% higher than the previous quarter. The volume growth came from the addition of custom treating at Chamberlain, continued incremental productivity at Silver Valley for both emulsion treatment and produced water disposal as well as the addition of the Cam-Star disposal wells in February.
• The Company continued to ramp up the Chamberlain custom treating facility, which opened for business in the last week of November 2013, processing 17,500 m³ of emulsion fluid in the quarter. Chamberlain was somewhat impacted by cold weather in its start up months of operation and is expected to continue to increase in volume throughput going forward as the market develops.
• The Company acquired Cam-Star Resources (1990) Ltd as a wholly owned subsidiary in February, adding three Class II water disposal facilities. The three sites are situated near Camrose, Bittern Lake and Ponoka, Alberta.
• The additional facilities, as well as continued incremental productivity at Silver Valley, contributed to record revenue in the quarter of $1,243,577, an increase of $498,866, or 67% over the same period in 2013. The incremental revenue was driven by volume growth in all revenue streams and was slightly offset by temporary pipeline restrictions in the quarter for oil sales at Silver Valley.
• The Company achieved gross margin improvement of $286,793, or 104%, in the first three months ending March 31 compared to the same period last year and posted its first quarter of positive adjusted EBITDA, successfully achieving this milestone in the execution of its growth and profitability strategy
• The Company completed a bought deal private placement of equity including full exercise of over-allotment option for gross proceeds of $9,197,700. Ceiba Energy will use the proceeds to execute the next phase of its capital development plan for increasing revenue.
• The Company successfully re-completed the Athabasca well. Initial injection tests have indicated injection volumes of 600m3/day.

Future Plans and Outlook

The Company plans to continue to execute its growth strategy, preparing to open its Athabasca water disposal site in late 2014 and to expand services at Silver Valley and Chamberlain. Currently, the Silver Valley facility is running at approximately 85% capacity and the Company believes that increasing capacity and expanding revenue streams has the opportunity to double revenue given the robust market activity in the region. The Company has budgeted approximately $8,000,000 for growth capital in 2014 and early 2015. The Company will also actively pursue suitable locations to develop new facilities in under serviced or constrained markets and evaluate potential acquisitions that are complimentary to the existing asset base.

Demand for the Company's services is dependent on oil and gas production in areas where it has facilities. Uncertainty in oil, gas and natural gas liquids pricing may influence capital spending decisions relating to production and ultimately demand for the Company's services. Demand for the Company's services is also affected by seasonal variations in the Western Canadian Sedimentary Basin. Any adverse changes in the global economy/markets may impact the oil prices and hence the oil field industry in the region. This may impact the ability of the Company to raise capital to support its future growth plans and working capital needs.

About Ceiba Energy

Ceiba Energy (TSX VENTURE:CEB) provides specialized services to the energy sector, specifically to companies involved in the exploration, extraction and production of oil and natural gas in Western Canada. Ceiba Energy develops and constructs facilities in proximity to its customers to provide treatment of crude oil emulsion, terminalling, storage and marketing of oil and disposal of production.

Reader Advisory

Certain information regarding Ceiba Energy in this news release, including management's assessment of the expected time of completion of the Chamberlain facility and the expected capacity of the Silver Valley facility, may constitute forward looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with facility construction and oilfield services operations, general risks associated with oil and gas exploration, development, production, marketing and disposal of waste, loss of markets, environmental risks, competition from other service providers, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Ceiba Energy's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements or information contained in this news release are made as of the date hereof and Ceiba Energy does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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 the accuracy of this release.