CALGARY, ALBERTA--(Marketwired - Aug. 29, 2014) -
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Great Prairie Energy Services Inc. (TSX VENTURE:GPE) ("Great Prairie" or the "Company") is pleased to announce its financial results for the three and six month periods ended June 30, 2014. A copy of the second quarter 2014 financial statements ("Financial Statements") and the related management discussion and analysis ("MD&A") are available under the Company's profile on SEDAR at www.sedar.com.
Second Quarter Highlights:
- Revenue of $3.6 million for the three months ended June 30, 2014.
- EBITDAS of $0.5 million for the three months ended June 30, 2014.
- On May 15, 2014, Great Prairie acquired certain oilfield service assets and related operations in Alberta and Saskatchewan for $10.0 million cash (the "Acquisition"). The Acquisition includes two frac fluid plants, oilfield rentals and hauling operations in Drumheller, Sundre and Valleyview, Alberta as well as Kindersley, Saskatchewan. The Acquisition complements Great Prairie's existing operations and adds three new key areas of operations.
- Increased total bank credit facility from $8.0 million to $20.0 million.
- Acceptance as a member by the Petroleum Services Association of Canada ("PSAC").
The second quarter of each calendar year is distinguished from other quarters by annual spring breakup, which typically occurs in the Company's operating areas from mid-March to mid-May. Spring breakup creates the most challenging operating quarter for the Company due to reduced activity levels resulting from the limited ability to move heavy oilfield equipment because of road closures caused by wet weather and ground thawing. As a result, the second quarter and first half of the year are characteristically the Company's weakest, with approximately 25-30% of annual EBITDAS being generated in the first half of the year. As previously disclosed, management estimates that Great Prairie would have recorded, on a pro forma basis, approximately $12 million in total adjusted EBITDAS for the year ended December 31, 2013 including the Acquisition. Management believes that the Company's 2014 operational and financial outlook remains positive.
The Acquisition provided Great Prairie with established field office locations in Alberta and Saskatchewan. The operational flexibility that these locations provide enables the Company to more effectively deploy and manage its equipment and provides a broad asset base to invest capital into its operations. The Company spent $0.4 MM on additional equipment in the second quarter and continues to invest in additional equipment. In conjunction with the Acquisition, Great Prairie's credit facility was increased to $20 million from $8 million and is currently drawn at $12 million, representing less than 1 times debt to current run rate EBITDAS. The increased bank facility provides the Company the flexibility to deploy additional capital into existing operations and the opportunity to acquire additional assets and businesses.
The Company believes that capital markets have become more favourable in 2014, with exploration and production companies raising more capital in the first half of 2014 than for the full year 2013. It has been reported that during the first half of 2014, exploration and production producers raised $6.2 billion through equity offerings versus $1.3 billion for the first half of 2013 and $4.1 billion for the full 2013 year. Management expects this access to capital will continue to drive industry activity levels in the second half of the year.
Additionally, despite the seasonal operational challenges of the second quarter, PSAC estimates that rig utilization for the quarter increased by approximately 22% versus the second quarter of 2013 and that rig utilization increased 3% versus 2013 annual figures.
The Company believes that Great Prairie's financial status remains strong and that the Company has positioned itself well for future growth. The Company continues to invest in new equipment as well as evaluate opportunities to add complementary businesses to its existing asset base.
About Great Prairie Energy Services Inc.
Great Prairie Energy Services Inc. is a Canadian energy services company focused on servicing oil and gas activity in Saskatchewan, Alberta and British Columbia. Great Prairie provides general oilfield hauling, equipment rental and frac fluid services out of Kindersley SK, Lloydminster SK, Drumheller AB, Sundre AB and Valleyview AB through its operating entities.
Forward-Looking Statements and Reader Advisory
This news release contains forward-looking statements relating to future growth, future acquisition opportunities and planned capital expenditures of Great Prairie. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Company may not be able to retain key employees to continue to maintain its operations; risk that the perceived benefit of the acquisition of the Purchased Assets may not be realized; risk that Great Prairie's ability to complete future financings; risks relating to the state of the economy in general and capital markets in particular; risks relating to investor interest in the business and future prospects of Great Prairie; risks that Great Prairie's customers may not increase, or may even decrease, their activity levels; risks relating to changes in the demand for or the price of oil and natural gas; risks relating to increases in costs of labor, fuel, equipment and supplies employed and used in Great Prairie's businesses; risks relating to compliance with environmental, health and safety laws and regulations, as well as actions by governmental and regulatory authorities; risks that Great Prairie may not be able to execute its capital expenditure program and/or that any such capital expenditure investments, if made, will not generate adequate returns; and other risks affecting Great Prairie's ability to maintain or improve operations, including its ability to maintain prices for services under market pricing pressures, weather risks, and the impact of potential increases in general and administrative expenses.
The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Great Prairie disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Great Prairie undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.
Readers should note that earnings before interest taxes depreciation amortization and share based compensation("EBITDAS") is a non-GAAP financial measures and do not have any standardized meaning under GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. Great Prairie believes that EBITDAS is a useful supplemental measure, which provide an indication of the results generated by the Great Prairie's primary business activities prior to consideration of how those activities are financed, amortized or taxed. Readers are cautioned, however, that EBITDAS should not be construed as an alternative to comprehensive income (loss) determined in accordance with GAAP as an indicator of Great Prairie's financial performance.
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.