Divestco Inc.
TSX : DVT

Divestco Inc.

March 30, 2009 18:30 ET

CORRECTION FROM SOURCE: Divestco Reports 2008 Annual and Q4 Results

CALGARY, ALBERTA--(Marketwire - March 30, 2009) - A correction from source is being issued with respect to the press release issued today at 7:00 AM EST. The corrections to the release are:

Third bullet on the first page should read:

- $3.7 million non-cash intangible asset impairment ($2.6 million net of tax of $1.1 million - $0.06 per share (basic and diluted)).

Cash EBITDA for three months ending December 31, 2007 should read $9,515 in the Cash EBITDA table and Financial Highlights table. The complete and corrected version follows.

Divestco Inc. (TSX:DVT) ("Divestco" or the "Company") announces its operating results for the three months and year ended December 31, 2008. Notwithstanding the current world-wide economic recession, credit crisis and lower natural gas and oil prices, Divestco is pleased with its adjusted 2008 results.

The Company's fourth quarter 2008 results included certain one-time charges related to the substantial decline in global equity markets, commodity prices, and oil and gas industry activity. These items are comprised of the following items:

- $10.1 million non-cash impairment of goodwill ($9.6 million net of tax of $0.5 million - $0.23 per share (basic and diluted)).

- $5.4 million related to a change made by Divestco to the estimated useful life of its customer-related intangible assets effective October 1, 2008 ($3.8 million, net of tax of $1.6 million - $0.09 per share (basic and diluted)). This is a prospective change under Canadian GAAP.

- $3.7 million non-cash intangible asset impairment ($2.6 million net of tax of $1.1 million - $0.06 per share (basic and diluted)).

- $0.5 million in severance costs ($0.4 million net of tax of $0.1 million - $0.01 per share (basic and diluted).



Adjusted net income is summarized as follows:

----------------------------------------------------------------------------
Three Months Ended Dec 31 Year Ended Dec 31
----------------------------------------------------------------------------
2008 2007 $ Change 2008 2007 $ Change
----------------------------------------------------------------------------

Net Income
(Loss) $ (10,277) $ 5,116 $ (15,393) $ (9,263) $ 17,541 $ (26,804)
Severance
Costs
(Net of Tax
of $0.1
million) 376 - 376 $ 376 $ - 376
Impairment
of
Goodwill
(Net of
Tax of
$0.5
million) 9,586 - 9,586 9,586 - 9,586
Impairment
of
Intangibles
(Net
of Tax of
$1.1
million) 2,601 - 2,601 2,601 - 2,601
Adjustment
to
Amortization
of
Intangibles
(Net
of Tax of
$1.6
million) 3,775 - 3,775 3,775 - 3,775
----------------------------------------------------------------------------
Adjusted Net
Income $ 6,061 $ 5,116 $ 945 $ 7,075 $ 17,541 $ (10,466)
----------------------------------------------------------------------------
Per Share -
Basic $ 0.14 $ 0.12 $ 0.02 $ 0.17 $ 0.45 $ (0.28)
Per Share -
Diluted $ 0.14 $ 0.12 $ 0.03 $ 0.17 $ 0.42 $ (0.25)
----------------------------------------------------------------------------


Fourth-quarter 2008 adjusted earnings were $6.1 million or $0.14 per share. This compares with fourth-quarter 2007 earnings of $5.1 million, or $0.12 per share (there were no normalization adjustments in 2007).

Divestco's net loss for the fourth quarter of 2008 was $10.3 million (25 cent loss per share - basic and diluted)) compared to net income of $5.1 million (12 cents per share (basic and diluted)) for the same period in 2007.

The Company had adjusted net income of $7.1 million (17 cents per share - basic and diluted) for fiscal 2008. Taking into account severance costs, impairment charges and the amortization change, the Company had a net loss of $9.3 million for fiscal 2008 (22 cents per share - basic and diluted) compared to net income of $17.5 million (42 cents per share - diluted) in 2007. This was a $26.8 million decrease over fiscal 2007.

During the fourth quarter Divestco generated revenue of $28.4 million, a decrease of $7.1 million (20%) from $35.5 million for the same period in 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $16 million, a $5.8 million (26%) decrease over the same period in 2007. The Company generated funds from operations of $14.9 million ($0.36 per share - basic and diluted) for the fourth quarter, a decrease of $0.2 million (1%) as compared to $15.1 million ($0.34 per share - diluted) for the same period in 2007.

Divestco generated revenue of $103 million for fiscal 2008, a decrease of $13.1 million (11%) from $116.1 million for the same period in 2007. EBITDA was $51.4 million, a $10.3 million (17%) decrease over the same period in 2007. From a Cash EBITDA perspective the Company generated $38.3 million in 2008, a decrease of $1.2 million (3%) from $39.5 million for same period in 2007. The Company generated funds from operations of $47.4 million for the year, an increase of $11.8 million (33%) as compared to $35.6 million for fiscal 2007.

The Company has been proactive in addressing labour costs, our largest expense. Regretfully, Divestco conducted two tranches of staff reductions in fiscal 2008 and, additionally, implemented a company wide salary roll-back and unpaid leaves of absences effective April 1, 2009. The Company believes its proactive approach will result in reduced debt, improved liquidity and profitability during these uncertain times, as well as provide an increased upside when business levels return.

The Company has a history of profitable operations, positive EBITDA and funds from operations and has significantly improved its working capital deficit and reduced its funded debt load over the past year. Divestco continues to see a pent-up demand for seismic data as well as a significant number of business opportunities. Divestco has positioned many of its assets in areas where oil and gas investments must be made, thus providing a hedge to potential slowing in general oil and gas business levels. The Company's assets provide excellent exposure to some of the largest resource plays in Western Canada, including approximately 12,000 kilometers of 2D data and 8,000 square kilometers of 3D data over the prospective Montney depositional fairway and approximately 3,800 kilometers of 2D data and 1,000 square kilometers of 3D data over the Horn River Basin. Although the industry is forecasting a rebound in 2010, management believes the proactive measures it has implemented will allow it to navigate any economic uncertainty that could extend past December 31, 2009. In light of a potential prolonged downturn in the service industry and as previously announced, Divestco is committed to a strategy of debt reduction, non-core asset dispositions, restricted capital spending and reduced expenses.

In terms of aggregate data library (inventory) sales, Divestco generated $14.7 million in sales for the fourth quarter of 2008. This represents an increase of $4.5 million (45%) compared to $10.1 million of aggregate library sales for the same period in 2007. Seismic participation revenue for the fourth quarter of 2008 was $0.3 million, compared to $12.2 million for Q4 2007.

For the year ended December 31, 2008, the Company generated data library sales totaling approximately $44.7 million. This represents a decrease of $2.9 million (6%) compared to $47.6 million of aggregate library sales for the same period in 2007. Seismic participation revenue for the year ended December 31, 2008, was $13.1 million compared to $22.1 million in 2007, a decrease of $9 million (41%).

Excluding the current portion of deferred revenue of $11.2 million (2007 - $4.4 million), Divestco exited 2008 with a $9.8 million working capital deficiency compared to a $28.1 million deficiency at the end of 2007.

Divestco also announces that effective December 19, 2008, Mr. Terry Barnhart, President, resigned from the Company to pursue other opportunities. Divestco would like to thank Mr. Barnhart for all of his efforts and contributions during his time with the Company and wish him the best in his future endeavours. Going forward, Stephen Popadynetz, Chief Executive Officer, will assume the combined role of President and CEO.

Mr. Stephen Popadynetz, CEO of Divestco commented: "2008 has been an incredibly challenging time globally and for the entire oil and gas service industry. With the effects of the global and regional economic crisis, the oil and gas service industry is experiencing far from normal activity levels. In light of a prolonged slowdown in the service industry, global market collapse and credit crisis, Divestco's Management and Board has continued to react proactively with an aggressive debt reduction strategy that includes:

- non-core asset dispositions

- only essential capital spending

- focus on expense reductions

It is difficult to predict the duration and overall affect of the current economic uncertainty, however we believe we will be well positioned when favorable market conditions return. I look forward to Divestco's future growth during the next positive market cycle and believe our strategies will produce positive returns for our shareholders."

Non-GAAP Measures

Divestco uses EBITDA and operating income as key measures to evaluate the performance of segments, divisions and the Company, with the closest GAAP measure being net income. EBITDA and operating income are measures commonly reported and widely used by investors as indicators of the Company's operating performance and ability to incur and service debt, and as a valuation metric. The Company believes EBITDA and operating income assists investors in comparing the Company's performance on a consistent basis without regard to financing decisions, and depreciation and amortization, which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.

EBITDA and operating income are not calculations based on Canadian GAAP and should not be considered alternatives to net income in measuring the Company's performance; nor should they be used as exclusive measures of cash flow, because they do not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the Consolidated Statements of Cash Flows. Investors should carefully consider the specific items included in Divestco's computation of EBITDA and operating income. While EBITDA and operating income have been disclosed herein to permit a more complete comparative analysis of the Company's operating performance and debt servicing ability relative to other companies, investors should be cautioned that EBITDA and operating income as reported by Divestco may not be comparable in all instances to EBITDA and operating income as reported by other companies.

Cash EBITDA is not a calculation based on Canadian GAAP and this measure may not be comparable to similar measures presented by other issuers. Accordingly, this measure has been represented in this press release to provide readers with additional information regarding the Company's financial position, results, liquidity, and its ability to generate future cash flows excluding revenue generated from seismic participation (multi-client) surveys. Cash EBITDA is defined as EBITDA less seismic participation (multi-client) revenue.



EBITDA and Cash EBITDA are calculated as follows:

----------------------------------------------------------------------------
Three Months Ended Year ended
Dec 31 Dec 31
----------------------------------------------------------------------------
(Thousands) 2008 2007 2008 2007
----------------------------------------------------------------------------

Net Income (Loss) $ (10,277) $ 5,116 $ (9,263) $ 17,541
Income Tax Expense (1,932) (209) (1,339) 5,768
Other Income (Loss) (1) (103) (30) (1,602) (260)
----------------------------------------------------------------------------
Operating Income (Loss) $ (12,106) $ 4,937 $ (9,000) $ 23,569
Interest 1,627 1,075 5,412 3,684
Depreciation and Amortization 12,746 15,743 41,209 34,424
Impairment of goodwill and
intangible assets 13,779 - 13,779 -
----------------------------------------------------------------------------
EBITDA $ 16,046 $ 21,755 $ 51,400 $ 61,677
Less: seismic participation
revenue $ (293) $ 12,240 $ (13,064) $ (22,130)
----------------------------------------------------------------------------
Cash EBITDA $ 15,753 $ 9,515 $ 38,336 $ 39,547
----------------------------------------------------------------------------


On a trailing twelve-month basis exiting 2008, the company generated $38.3 million in Cash EBITDA, a $1.2 million (3%) decrease from the $39.5 million generated exiting 2007.

Divestco reports funds from operations because it is a key measure used by management to evaluate its performance and to assess the ability of the Company to finance operating activities and capital expenditures. Funds from operations excludes certain working capital changes and other sources and uses of cash, which are disclosed in the Consolidated Statements of Cash Flows.

Funds from operations is not a calculation based on Canadian GAAP and should not be considered an alternative to the Consolidated Statements of Cash Flows. Funds from operations is a measure that can be used to gauge Divestco's capacity to generate discretionary cash flow. Investors should be cautioned that funds from operations as reported by Divestco may not be comparable in all instances to funds from operations as reported by other companies. While the closest GAAP measure is cash flows from operating activities, funds from operations is considered relevant because it provides an indication of how much cash generated by operations is available before proceeds from divested assets and changes in certain working capital items.



Funds from operations is calculated as follows:

----------------------------------------------------------------------------
Three Months Ended Year ended
Dec 31 Dec 31
----------------------------------------------------------------------------
(Thousands) 2008 2007 2008 2007
----------------------------------------------------------------------------

Cash Flows from Operating
Activities $ 14,393 $ 13,869 $ 42,786 $ 22,571
Changes in Non-Cash Working
Capital Balances 761 672 4,316 13,870
Increase (Decrease) in Non-Current
Deferred Revenue (249) 691 267 (270)
Decrease in Long-Term Accounts
Receivable - (140) - (560)
----------------------------------------------------------------------------
Funds from Operations $ 14,905 $ 15,092 $ 47,369 $ 35,611
----------------------------------------------------------------------------

Financial Highlights

----------------------------------------------------------------------------
Financial Results (Thousands, Except Per Share Amounts)
----------------------------------------------------------------------------
Three Months Ended Dec 31 Year Ended Dec 31
----------------------------------------------------------------------------
2008 2007 % Change 2008 2007 % Change
----------------------------------------------------------------------------

Revenue $ 28,404 $ 35,528 -20% $ 102,967 $ 116,070 -11%

Operating
Expenses 12,358 13,773 -10% 51,567 54,393 -5%
----------------------------------------------------------------------------

EBITDA 16,046 21,755 -26% 51,400 61,677 -17%

Interest 1,627 1,075 51% 5,412 3,684 47%

Depreciation
and Amortization 12,746 15,743 -19% 41,209 34,424 20%

Impairment of
goodwill and
intangibles 13,779 - N/A 13,779 - N/A
----------------------------------------------------------------------------

Operating
Income (Loss) (12,106) 4,937 N/A (9,000) 23,569 N/A

Other Income
(Loss) (103) (30) N/A (1,602) (260) N/A

Income Tax
Expense (1,932) (209) N/A (1,339) 5,768 N/A
----------------------------------------------------------------------------

Net Income
(Loss) $ (10,277) $ 5,116 N/A $ (9,263) $ 17,541 N/A
Per Share -
Basic (0.25) 0.12 N/A (0.22) 0.45 N/A
Per Share -
Diluted (0.25) 0.12 N/A (0.22) 0.42 N/A
----------------------------------------------------------------------------

Funds from
Operations $ 14,905 $ 15,092 -1% $ 47,369 $ 35,611 33%
Per Share -
Basic 0.36 0.36 0% 1.13 0.91 24%
Per Share -
Diluted 0.36 0.34 6% 1.13 0.85 33%
----------------------------------------------------------------------------

Shares
Outstanding 41,958 41,500 1% 41,958 41,500 1%

Weighted
Average
Shares
Outstanding
Basic 41,848 41,471 1% 41,767 39,200 7%
Diluted 41,848 43,778 -4% 41,767 41,763 0%
----------------------------------------------------------------------------

Cash EBITDA $ 15,753 $ 9,515 -54% $ 38,336 $ 39,547 -3%
----------------------------------------------------------------------------


Segment Review Summary

----------------------------------------------------------------------------
For the three months ended December 31, 2008 (Thousands)
----------------------------------------------------------------------------
Software Services Data
----------------------------------------------------------------------------
Revenue $ 2,274 $ 8,194 $ 14,961
EBITDA 981 3,840 13,615
Interest (Net of Interest Revenue) 22 - 429
Depreciation and Amortization 585 1,560 7,708
Impairment of goodwill and intangibles 1,930 6,355 218
Operating Income (Loss) (1) (1,556) (4,075) 5,260
----------------------------------------------------------------------------



----------------------------------------------------------------------------
For the three months ended December 31, 2008 (Thousands)
----------------------------------------------------------------------------
Corporate &
Consulting Other Total
----------------------------------------------------------------------------
Revenue $ 2,975 $ - $ 28,404
EBITDA 293 (2,683) 16,046
Interest (Net of Interest Revenue) 1 1,175 1,627
Depreciation and Amortization 2,762 131 12,746
Impairment of goodwill and intangibles 5,276 - 13,779
Operating Income (Loss) (1) (7,746) (3,989) (12,106)
----------------------------------------------------------------------------


----------------------------------------------------------------------------
For the three months ended December 31,
2007 (Thousands)
----------------------------------------------------------------------------
Software Services Data
----------------------------------------------------------------------------
Revenue $ 2,691 $ 7,174 $ 22,364
EBITDA 1,324 2,298 20,475
Interest (Net of Interest Revenue) - - 131
Depreciation and Amortization 404 677 14,214
Impairment of goodwill and intangibles - - -
Operating Income (Loss) 920 1,621 6,130
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For the three months ended December
31, 2007 (Thousands)
----------------------------------------------------------------------------
Corporate &
Consulting Other Total
----------------------------------------------------------------------------
Revenue $ 3,299 $ - $ 35,528
EBITDA 41 (2,383) 21,755
Interest (Net of Interest Revenue) (9) 953 1,075
Depreciation and Amortization 399 49 15,743
Impairment of goodwill and intangibles - - -
Operating Income (Loss) (349) (3,385) 4,937
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For the twelve months ended December 31,
2008 (Thousands)
----------------------------------------------------------------------------
Software Services Data
----------------------------------------------------------------------------
Revenue $ 8,356 $ 24,493 $ 57,773
EBITDA 3,195 6,272 50,647
Interest (Net of
Interest Revenue) 22 - 418
Depreciation and
Amortization 1,874 3,383 31,679
Impairment of goodwill
and intangibles 1,930 6,355 218
Operating Income (Loss) (631) (3,466) 18,332
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For the twelve months ended December 31,
2007 (Thousands)
----------------------------------------------------------------------------
Corporate &
Consulting Other Total
----------------------------------------------------------------------------
Revenue $ 12,345 $ - $ 102,967
EBITDA 319 (9,033) 51,400
Interest (Net of Interest Revenue) (16) 4,988 5,412
Depreciation and Amortization 3,786 487 41,209
Impairment of goodwill and intangibles 5,276 - 13,779
Operating Income (Loss) (8,727) (14,508) (9,000)

----------------------------------------------------------------------------
For the twelve months ended December 31,
2007 (Thousands)
----------------------------------------------------------------------------
Software Services Data
----------------------------------------------------------------------------
Revenue $ 8,494 $ 24,731 $ 69,690
EBITDA 3,673 4,706 61,507
Interest (Net of
Interest Revenue) 3 - 604
Depreciation and
Amortization 1,467 2,466 28,963
Impairment of goodwill
and intangibles - - -
Operating Income (Loss) 2,203 2,240 31,940
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For the twelve months ended December 31,
2007 (Thousands)
----------------------------------------------------------------------------
Corporate &
Consulting Other Total
----------------------------------------------------------------------------
Revenue $ 13,155 $ - $ 116,070
EBITDA 1,102 (9,311) 61,677
Interest (Net of Interest Revenue) (47) 3,124 3,684
Depreciation and Amortization 1,350 178 34,424
Impairment of goodwill and intangibles - - -
Operating Income (Loss) (201) (12,613) 23,569
----------------------------------------------------------------------------


Divestco Inc.
Consolidated Balance Sheets

----------------------------------------------------------------------------
As at Dec 31, 2008 Dec 31, 2007
----------------------------------------------------------------------------
(Thousands - Unaudited)
----------------------------------------------------------------------------

Assets

Current Assets
Cash and cash equivalents $ 1,811 $ 2,466
Funds held in trust 31 678
Accounts receivable 27,858 27,083
Prepaid expenses, supplies and deposits 2,361 1,794
Investment tax credits recoverable 59 -
----------------------------------------------------------------------------
32,120 32,021

Investment in affiliated company 80 72
Data libraries 154,897 161,354
Participation surveys in progress 4,708 1,047
Property and equipment 4,942 5,981
Deferred development costs 6,201 4,736
Intangible assets 6,787 20,208
Goodwill - 10,090
----------------------------------------------------------------------------

$ 209,735 $ 235,509
----------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current Liabilities
Accounts payable and accrued liabilities $ 27,235 $ 39,391
Income taxes payable - 7,286
Current portion of deferred revenue 11,206 4,351
Current portion of long-term debt obligations 14,622 5,889
Convertible debentures - 7,533
----------------------------------------------------------------------------
53,063 64,450

Deferred revenue 263 530
Long-term debt obligations 33,463 38,400
Future income taxes 10,973 13,406
----------------------------------------------------------------------------
97,762 116,786
----------------------------------------------------------------------------

Shareholders' Equity
Equity instruments 70,518 68,690
Contributed surplus 4,955 3,661
Equity portion of convertible debentures - 609
Retained earnings 36,500 45,763
----------------------------------------------------------------------------
111,973 118,723
----------------------------------------------------------------------------

$ 209,735 $ 235,509
----------------------------------------------------------------------------


Divestco Inc.

Consolidated Statements of Income (Loss), Comprehensive Income (Loss)
and Retained Earnings

----------------------------------------------------------------------------
For the three months For the year ended
ended Dec 31 Dec 31
----------------------------------------------------------------------------
(Thousands, except per share
amounts - Unaudited) 2008 2007 2008 2007
----------------------------------------------------------------------------

Revenue $ 28,404 $ 35,528 $ 102,967 $ 116,070
----------------------------------------------------------------------------

Operating expenses
Salaries and benefits 8,327 8,591 34,381 35,008
General and administrative 3,799 4,814 16,113 17,854
Stock compensation expense 232 368 1,073 1,531
----------------------------------------------------------------------------
12,358 13,773 51,567 54,393
----------------------------------------------------------------------------

Interest expense 1,627 1,075 5,412 3,684

Depreciation and amortization 12,746 15,743 41,209 34,424

Impairment of goodwill and
intangible assets 13,779 - 13,779 -

Other income (loss) (103) (30) (1,602) (260)
----------------------------------------------------------------------------

Income (loss) before income taxes (12,209) 4,907 (10,602) 23,309
----------------------------------------------------------------------------

Income taxes
Current (recovery) (158) 366 1,094 8,723
Future (reduction) (1,774) (575) (2,433) (2,955)
----------------------------------------------------------------------------
(1,932) (209) (1,339) 5,768
----------------------------------------------------------------------------

Net income (loss) and
comprehensive income (loss) for
the period (10,277) 5,116 (9,263) 17,541

Retained earnings, beginning of
period 46,777 40,800 45,763 28,375

Purchase price of common shares
repurchased in excess of book
value - (153) - (153)
----------------------------------------------------------------------------

Retained earnings, end of period $ 36,500 $ 45,763 $ 36,500 $ 45,763
----------------------------------------------------------------------------

Earnings per share
Basic $ (0.25) $ 0.12 $ (0.22) $ 0.45
Diluted $ (0.25) $ 0.12 $ (0.22) $ 0.42

Weighted average number of shares
Basic 41,848 41,471 41,767 39,200
Diluted 41,848 43,778 41,767 41,763

----------------------------------------------------------------------------


Divestco Inc.
Consolidated Statements of Cash Flows

----------------------------------------------------------------------------
For the three months For the year ended
ended Dec 31 Dec 31
----------------------------------------------------------------------------
(Thousands-Unaudited) 2008 2007 2008 2007
----------------------------------------------------------------------------

Cash flows from operating
activities
Net income (loss) for the period $(10,277) $ 5,116 $ (9,263) $ 17,541
Items not affecting cash:
Equity investment loss 5 7 (8) 2
Depreciation and amortization of
data libraries, property and
equipment and intangible assets 12,484 15,543 40,221 33,686
Impairment of goodwill and
intangible assets 13,779 - 13,779 -
Amortization of deferred
development costs 262 200 988 738
Amortization of deferred finance
costs 83 101 360 604
Accretion of liability portion
of convertible debentures 111 - 609 -
Future income taxes (reduction) (1,774) (575) (2,433) (2,955)
Data exchanges (Note 5) - (5,683) - (16,328)
Loss on sale of property and
equipment - 5 1,558 172
Non-cash retention bonus - 10 485 620
Stock compensation expense 232 368 1,073 1,531
----------------------------------------------------------------------------
14,905 15,092 47,369 35,611

Changes in non-cash working
capital balances (761) (672) (4,316) (13,870)
Increase (decrease) in
non-current deferred revenue 249 (691) (267) 270
Decrease in long-term accounts
receivable - 140 - 560
----------------------------------------------------------------------------
14,393 13,869 42,786 22,571
----------------------------------------------------------------------------

Cash flows from (used in)
financing activities
Bank indebtedness - - - (6,451)
Advances to affiliated company - - - (6)
Issue of common shares, net of
related expenses - 58 349 2,606
Repayment of long-term debt
obligations (3,103) (1,695) (8,143) (15,448)
Repayment of shareholder loans - - - -
Deferred financing costs - - - (1,340)
Proceeds received from long-term
debt obligations (5,510) 1,612 3,433 45,209
Repurchase of common shares - (610) (59) (609)
----------------------------------------------------------------------------
(8,613) (635) (4,420) 23,961
----------------------------------------------------------------------------

Cash flows from (used in)
investing activities
Purchase of data libraries (2,715) (25,548) (26,573) (61,360)
Decrease (increase) in
participation surveys in
progress (3,712) 364 (3,661) 1,722
Purchase of property and
equipment (36) (191) (398) (1,374)
Acquisitions - (80) - (3,948)
Proceeds on sale of property and
equipment - (5) 3,089 172
Deferred development costs (586) (669) (2,453) (2,597)
Changes in non-cash working
capital balances 488 11,103 (9,025) 21,881
----------------------------------------------------------------------------
(6,561) (15,026) (39,021) (45,504)
----------------------------------------------------------------------------

Foreign exchange (gain) loss on
cash held in a foreign currency (2) 1 - 1
----------------------------------------------------------------------------

Increase (decrease) in cash and
cash equivalents (783) (1,791) (655) 1,029

Cash and cash equivalents,
beginning of period 2,594 4,257 2,466 1,437
----------------------------------------------------------------------------

Cash and cash equivalents, end
of period $ 1,811 $ 2,466 $ 1,811 $ 2,466
----------------------------------------------------------------------------


Divestco is an exploration services company that provides a comprehensive and integrated portfolio of software, services, data and consulting to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of software, services, data and consulting solutions offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary, Alberta, Canada and trades on the Toronto Stock Exchange under the symbol "DVT".

This press release contains forward-looking statements about current expectations that involve a number of business risks and uncertainties. These statements generally include forward-looking words such as, "may," "will," "expect," or similar variations. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. While management believes the expectations reflected in the forward-looking statements are reasonable, such statements involve risks and uncertainties that could affect the Company's operations and financial results.

The TSX has not reviewed nor accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Divestco Inc.
    Mr. Stephen Popadynetz
    Chief Executive Officer
    (403) 218-6466
    or
    Divestco Inc.
    Mr. Roderick Chisholm
    Chief Financial Officer
    (403) 218-6450
    site: www.divestco.com