Estrella International Energy Services Ltd.
TSX VENTURE : EEN

Estrella International Energy Services Ltd.

May 31, 2013 09:24 ET

Estrella International Energy Services Ltd. Announces Filing of Q1 Financial Statements

TORONTO, ONTARIO--(Marketwired - May 31, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX VENTURE:EEN) announces that it has filed its Interim Condensed Consolidated Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the three month period ended March 31, 2013. Copies of these documents can be found on the SEDAR website at www.sedar.com. In this press release, except for share amounts, all dollar amounts are in US$ '000 unless otherwise specified.

During the quarter ended March 31, 2013, the Company was able to deploy the upgraded 1000 HP rig 1002 in Colombia, identify new clients in the country and most notably deploy rigs 1201 and 551 onto multi-year contract with YPF in Argentina (Rig 551 initiated operations in April 2013). Rig 1201 is drilling non-conventional high pressure gas wells in the Neuquen basin, and was able to set a record for drilling into the deep Vaca Muerta formation in only its second well, drilling and cementing the well in less than 23 days. The Company exited the quarter at 51% average utilization. The Company has now 9 of 19 rigs on long term contracts giving a baseline utilization of 47%, and an additional three rigs working on shorter term contracts.

While directional activity was down slightly quarter on quarter due to lower activity in Chile, the market position in Argentina improved significantly with successful runs for three new clients in the quarter.

The Company continues to be focused on reducing the overall indebtedness of the business. During the quarter ended March 31, 2013, CDN$534 of principal on its January 2011 Convertible Debentures was prepaid. Additionally, the Company is continuing its efforts in respect of its cost reduction plans, with reductions in overhead staff and further consolidation of operating activities.

In its continuing goal to have an injury free workplace, the Company completed this quarter without any Lost Time Injuries, a substantial achievement.

Selected Financial Information for the Quarter Ended March 31, 2013

During the quarter the Company recorded revenues of $16,532 ($14,349 in 2012), this notwithstanding that the Company's rig utilization rate was 51% (52% in 2012). The revenues were offset by general and administrative expenses of $2,935 ($2,578 in 2012), depreciation of $3,253 ($2,804 in 2012), interest expense of $1,523 ($2,661 in 2012) and oilfield expenses of $14,821 ($12,488 in 2012). For the quarter ended March 30, 2013, the Company recorded a net loss of $5,039 (loss of $5,622 in 2012) and EBITDA of -$1,224 (-$717 in 2012). For the quarter ended March 31, 2013, the Company recorded net loss per share of -$0.0170 (-$0.0417 in 2012).

About Estrella

Estrella is an oil and natural gas, geothermal and mining service company with operations throughout Latin and South America. It provides conventional drilling services; directional drilling services; tools and equipment sales and rentals; work-over and finishing services; and consulting and engineering services. The Corporation is headquartered in Buenos Aires, Argentina and has operating locations in six countries Latin and South America.

Forward Looking Statements

This press release may contain forward-looking statements which reflect management's expectations regarding future growth, results of operations, performance and business prospects of Estrella. These forward-looking statements may relate to, among other things, forecasts or expectations regarding business outlook for Estrella; commodity prices for oil and natural gas; oil and natural gas demand and production growth; debt service requirements for Estrella; improvements in operating procedures and technology; capital expenditures by Estrella and the oil and gas industry; the business strategies of Estella's customers; future global economic conditions; and future results of operations; expectations regarding the Corporation's ability to raise capital; realization of the anticipated benefits of acquisitions and dispositions, revenue growth, future acquisitions, generation of cash flow, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These statements are not historical facts or guarantees of future performance, but instead represent management's current expectations, estimates and projections regarding future events.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

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.

Contact Information