New West Energy Services Inc.
TSX VENTURE : NWE

New West Energy Services Inc.

August 28, 2014 18:16 ET

New West Energy Services Inc. Announces Its Fourth Quarter and Full Year Results

CALGARY, ALBERTA--(Marketwired - Aug. 28, 2014) - New West Energy Services Inc. (TSX VENTURE:NWE) (the "Corporation") is pleased to announce the financial results for the Corporation for its fourth quarter and year ended April 30, 2014.

HIGHLIGHTS

Financial Results for the fourth quarter ended April 30, 2014 and 2013:

  • Revenue of $7.18 million ($5.45 million for 2013).
  • Gross margin of $1.73 million ($1.45 million for 2013).
  • Net profit of $131,000 from continuing operations before income tax ($45,000 for 2013).
  • Earnings per share (basic & diluted) from continuing operations of $0.001 for 2014 and 2013.

Operational and Financial Results for the years ended April 30, 2014 and 2013:

  • Revenue of $21.97 million ($19.34 million for 2013).
  • Gross margin of $5.46 million ($5.60 million for 2013).
  • Net profit of $15,000 from continuing operations before income tax ($1.02 million for 2013).
  • Earnings per share (basic & diluted) from continuing operations of $0.000 ($0.011 for 2013).
  • EBITDA was $949,000 for 2014 ($1.67 million for 2013). This calculation is a non-IFRS measure.
  • In October 2013, the Corporation completed the acquisition of 1770245 Alberta Ltd. (which includes the assets of Tippin D Oilfield Services Ltd. and 40 Creek Oilfield Services Ltd.) for a purchase price of $1.8 million. The new diversified service, based in Beaverlodge Alberta, operated at near full capacity and in the six month period since the acquisition, generated $2.99 million in revenue and $551,000 in earnings.
  • The overall client base of the Corporation grew during the fiscal year by approximately 35 clients to a total of 141 clients.
  • The Corporation initiated its diversification strategy following the winter drilling season which involved moving some of the vacuum and water trucks from the drilling project related service to the callout type service operating from Beaverlodge, Alberta. This is expected to increase overall margins and reduce the costs involved in training personnel for the winter season as well as diversifying into the completion and production sectors of the oil and gas industry. The new operation in Beaverlodge has increased the equipment fleet located there from four units to 15 units comprised of combo vacs, hydrovacs, steamers and tank trucks.
  • During the year, the Corporation completed trials with two major oil and gas operators utilizing a new technology to recover oil, water and solids from oil contaminated drill cuttings. The technology uses thermal desorption to separate oil, water and solids which are then recovered, reused or disposed of. The Corporation is currently in discussions with a gas producer operating in Northeast British Columbia to build a customized unit for Western Canada and expects to establish a new business together with the United Kingdom based developer of the technology if a contract is concluded. The Corporation has incurred net expenditures of $184,353 to date for the trial which have been expensed.

Company Developments:

  • The Corporation increased productive capacity and updated the equipment fleet during the year with the addition of tri drive, straight vac and water trucks, hydrovac, combination vac, tank trucks and steamer units. The overall equipment fleet currently stands at 43 units.
  • Total capital expenditures during the year amounted to $3.2 million for additional trucks and equipment to update the equipment fleet and add production capacity to the new operation in Beaverlodge.

OUTLOOK AND STRATEGY

The Corporation is implementing its diversification strategy for services and equipment upon completion of this fiscal year end which is expected to increase revenues and margins and reduce the fluctuations in equipment utilization between the summer and winter seasons. As part of this process, the Corporation plans on diversifying its equipment fleet from drilling related services to production type services to offset the swings in drilling utilization.

OVERVIEW

The Corporation operates in the oilfield service industry in Canada through two wholly owned subsidiaries - BearStone Environmental Solutions Inc. and Porterco Oilfield Services Inc. BearStone provides environmental services to the upstream oil and gas industry and also operates a fleet of specialized vacuum, hydrovac and water trucks. Porterco operates a fleet of trucks and trailers for hauling oil contaminated drill cuttings as well as providing equipment rental and custom fabrication services.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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