Dalmac Energy Inc.

Dalmac Energy Inc.

February 24, 2011 09:00 ET

Dalmac Earns $1,129,000 in Q3'11

EDMONTON, ALBERTA--(Marketwire - Feb. 24, 2011) - John Babic, President and CEO of Dalmac Energy Inc. ("Dalmac") (TSX VENTURE:DAL) announces the Corporations third quarter and nine month year to date results.

Selected Financial Information                        
(000's Cdn Dollars, except per share data)   Q3'11     Q3'10     YTD' 11     YTD'10  
Revenues   8,219     4,661     17,943     11,785  
Gross Margin   2,824     1,188     6,133     2,236  
Gross Margin %   34 %   25 %   34 %   19 %
EBITDAS (loss)   1,966     304     3869     (394 )
EBIDTAS per share - basic   0.11     0.02     0.21     (0.03 )
Net income (loss)   1,129     (369 )   1,544     (2,180 )
  Net income (loss) per share - basic   0.06     (0.03 )   0.09     (0.17 )
  Net income (loss) per share - diluted   0.06     (0.03 )   0.08     (0.17 )

Total revenue for Q3'11 increased by 76% to $8.2M from the $4.6M reported at Q3'10. The year to date revenue increased 52% to $18M from the $12M reported in the previous year. The onset of the colder winter weather in November of 2010 kicked off the winter drilling and well servicing programs which in turn helped increase our utilization levels. The gross margin for Q3'11 increased by 138% to $2.8M from the $1.2M reported in Q3'10. The year to date gross margin increased by 174% to $6.1M as compared to $2.2M at the same period in the previous year. As a percentage of revenue the gross profit margin for the current quarter was 34% compared to 25% in Q3'10. The YTD'11 gross margin profit was 34% as compared to 19% in YTD'10. The EBITDAS in Q3'11 increased by 547% to $2.0M from the $304K reported in Q3'10. The YTD'11 EBITDAS increased by 1082% to $3.9M from the $(394)K at the same period in the previous year. As a percentage of revenue, Q3'11 EBITDAS was 24% as compared to 6% in Q3'10. The percentage of revenue for EBITDAS at YTD'11 was 22% as compared to (3)% at the same period in the prior year. Net income for Q3'11 increased by 406% to $1.1M from the $(369)K reported in Q3'10. For YTD'11 net income increased by 171% to $1.5M from $(2.2)M in the prior year.


Drilling rig utilizations in western Canada stood at 80% at Q3'11. This is up 26% from the same time last year. According to the Petroleum Services Association of Canada ("PSAC") the total number of wells drilled in Canada for 2010 was 12,158. This number may be half of what was drilled in 2007; but there is a big difference in the length of time it takes to drill an average well between then and now. Many of the new wells drilled are deeper, longer and involve multi stage fracturing. This makes these wells more costly to drill and complete which in turn increases the demand for Dalmac's products and services. An additional precursor of increased future oilfield activity is the record levels of oil and gas land sales in 2010. Oil and gas land sales in Alberta netted $2.8 billion in 2010 which eclipses the previous record of $1.85 billion set in 2005. For 2011 PSAC has increased its 2010 forecast by 1000 new wells to nearly the 13,000 well mark.

About 65% of Dalmac's revenue is derived from production related services such as fluid hauling and the rest includes drilling and other well work-over activities. With increasing drilling and well servicing activity the demand for Dalmac's products and services also goes up. This creates a very positive outlook for Dalmac for the course of the current year.

Stressing the Company's determination to optimize operating efficiencies by trimming costs and forging ahead with building healthy customer relationships while delivering safe, quality and timely services are key to Dalmac's unfolding strategy. Dalmac's strong safety record and our continued commitment to supporting safety and environmental concerns is also helping position our Company to being first call with many of our major oil and gas producing customers.

We seek Safe Harbor.

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