Pulse Seismic Inc.

Pulse Seismic Inc.

May 07, 2009 23:59 ET

Pulse Data Inc. Reports Q1 2009 Results

CALGARY, ALBERTA--(Marketwire - May 7, 2009) - Douglas Cutts, President and Chief Executive
Officer of Pulse Data Inc. (TSX:PSD) ("Pulse" or "the Company"), reports the financial
and operating results of Pulse for the three months ended March 31, 2009. The
interim consolidated financial statements, accompanying notes and MD&A have
been filed on SEDAR. These documents are also available on Pulse's website


- Total seismic revenue for the three months ended March 31, 2009 was
$7.0 million, consisting of $2.1 million in data library sales and
$4.9 million in participation survey revenue; compared to total
seismic revenue of $7.8 million, comprised entirely of data library
sales, for the same period in 2008.

- One participation survey was completed during Q1 2009, adding 291 net
square kilometres of 3D seismic data to the data library at a total
cost of $8.9 million (and a net cost to Pulse of $2.9 million).

- Cash EBITDA(b) for the three months ended March 31, 2009 was $663,000
($0.01 per share basic and diluted), compared to $5.9 million
($0.11 per share basic and diluted) for the same period in 2008.

- Net loss was $2.9 million ($0.05 per share basic and diluted) for the
three months ended March 31, 2009 compared to a net loss of
$1.4 million ($0.03 per share basic and diluted) for the same period
in 2008.

- A total of 237,100 common shares were purchased and cancelled through
the normal course issuer bid program for a total cost of
approximately $371,000.


(000s of dollars except per share data)

3 months ended Year ended
March 31, December 31,
------------------ -------------
2009 2008 2008
---- ---- ----
Revenue from continuing operations:
Data library sales $ 2,152 $ 7,829 $ 36,894
Participation surveys 4,872 - 8,509
Total revenue from continuing
operations $ 7,024 $ 7,829 $ 45,403

Amortization of seismic data library $ 8,856 $ 6,646 $ 32,438

Net earnings (loss) from
continuing operations $ (2,925) $ (1,009) $ 880
Net earnings (loss) from continuing
operations per share:
Basic and diluted $ (0.05)(a) $ (0.02)(a) $ 0.02

Net earnings (loss) $ (2,925) $ (1,441) $ 586
Earnings (loss) per share:
Basic and diluted $ (0.05)(a) $ (0.03)(a) $ 0.01

Funds from continuing operations(b) $ 5,176 $ 5,456 $ 35,188
Funds from operations per share(b):
Basic and diluted $ 0.10 $ 0.10 $ 0.65

Cash EBITDA(b) $ 663 $ 5,893 $ 28,196

Working capital:
Cash $ 17,040 $ 8,964 $ 13,244
Non-cash working capital 946 10,823 7,918
Current portion of long-term debt (6,998) (8,004) (6,798)
Total working capital $ 10,988 $ 11,783 $ 14,364

Total assets $ 102,654 $ 118,725 $ 112,383

Capital expenditures:
Seismic data purchases $ - $ - $ 4,557
Participation surveys $ 8,900 $ - $ 16,433
Changes to work in progress $ (1,641) $ - $ 1,681
Property & equipment additions $ 22 $ 350 $ 556
Total capital expenditures $ 7,281 $ 350 $ 23,227

Total long-term debt (net of current
maturities and debt financing costs) $ 25,386 $ 21,574 $ 26,188
Shareholders' equity $ 63,067 $ 74,916 $ 66,288

Weighted average shares outstanding:
Basic 53,263,616 54,448,918 53,985,299
Diluted 53,263,616 54,863,656 54,160,333
Shares outstanding at period end 53,160,483 54,437,489 53,397,583


Seismic library:
2D in net kilometres 257,281 257,281 257,281
3D in net square kilometres 12,805 11,607 12,514

(a) Basic weighted average shares outstanding are used to calculate loss
per share.

(b) The Company's continuous disclosure documents provide discussion and
analysis of "cash EBITDA", "funds from operations" and "funds from
operations per share". These financial measures do not have standard
definitions prescribed by GAAP in Canada and, therefore, may not be
comparable to similar measures disclosed by other companies. The
Company has included these non-GAAP financial measures because
management, investors, analysts and others use them as measures of
the Company's financial performance. The Company's definition of cash
EBITDA is cash available for interest payments, cash taxes if
applicable, debt servicing, discretionary capital expenditures and
the payment of dividends, and is calculated as earnings before
interest, income taxes, depreciation and amortization less
participation survey revenue, plus non-cash and non-recurring G&A
expenses. The Company's definition of funds from operations is cash
flow from operations as prescribed by Canadian GAAP but excluding the
impact of changes in non-cash working capital. Funds from operations
per share is defined as funds from operations divided by the weighted
average number of shares outstanding for the period.


During the first quarter of 2009, Pulse completed and delivered one
participation survey, consisting of 291 net square kilometres of 3D data. The
participation survey was started in the fourth quarter of 2008 and was
approximately 19 percent complete at December 31, 2008. The participation
survey is located in the Edson/Hinton area in west central Alberta and the
dataset generated is complementary to Pulse's current seismic data library.


On March 23, 2009 Pulse announced the temporary suspension of the
Company's quarterly dividend. The dividend will be reinstated when seismic
data library sales recovery.

The Company announces that Mr. Peter Fuss will not be standing for
re-election as a Director of Pulse at the Annual and Special Shareholders
Meeting on May 21, 2009. Mr. Fuss was instrumental in providing guidance
during the period from which Pulse acquired, and subsequently sold, the
Terrapoint business unit. The Directors, management and staff of Pulse thank
Mr. Fuss for his 5 years of valuable service.


Following a weak first quarter of 2009, Pulse continues to expect low
levels of oil and natural gas exploration activity in Western Canada and
associated expenditures on seismic data throughout 2009. Accordingly, the
Company is maintaining a highly cautious and conservative financial stance,
focused on cash conservation and balance sheet integrity that it adopted
entering 2009. Pulse's continued strong cash position, low operating and G&A
cost structure, moderate long-term debt, ample credit capacity on reasonable
terms, low capital commitments in 2009 and overall good liquidity provide
solid positioning to weather the downturn. The Company's internal cost-saving
initiatives include reductions to senior management and directors'
compensation. The temporary suspension of the dividend will conserve cash by
approximately $2.5 million per quarter. A reduction in the number of shares
purchased under Pulse's normal course issuer bid will be expected to further
conserve cash. The Company has not committed to carrying out any participation
surveys at this time and there will be no participation survey revenue in the
second quarter of 2009.

Many oil and natural gas companies are experiencing tightening access to
credit, with some expected to suffer lowering of their bank lines as a result
of commodity price-driven reductions to their reserve valuations. Highly
levered or otherwise poorly capitalized companies have severely curtailed
capital expenditures, while many financially solid producers have also made
reductions. It is therefore unsurprising that conventional oil and natural gas
exploration was very slow over the winter, with a steep decline in the number
of active drilling rigs in western Canada amid financial challenges and a
continued slide in natural gas prices. In March the monthly average number of
rigs active in western Canada was less than half the number in March 2008,
falling to the lowest figure since 1992. Well completions for the first three
months of 2009 were down a further 5 percent year-over-year, sliding below the
weak first quarter of 2008. On the plus side, certain unconventional natural
gas projects are reportedly proceeding. Sales of mineral leases in Alberta
continued to be extremely weak in the first three months of 2009, down sharply
from 2008 to the lowest level in at least a decade. Alberta's economy has shed
a reported 48,000 jobs from October 2008 to early April 2009, many of them in
the oil and natural gas sector.

With much of Western Canada's exploration activity focused on natural
gas, natural gas prices are a key driver of field activities. This outlook
remains weak as continental demand continues to fall and, despite a steep drop
in the number of active drilling rigs in the United States over the past
several months, producers continue to add production from prolific
unconventional gas plays. In April North American gas storage volume was
threatening to break out of the upper end of its five-year seasonal range,
which would be almost certain to further dampen prices. More vigorous
exploration capital expenditures in western Canada will require a combination
of higher commodity prices, improved industry cash flows and improved access
to debt and/or equity capital.

In the months ahead, Pulse's management will continue to look for clarity
from its customers regarding their capital expenditures, the key driver of the
Company's business. Accordingly, the Company is prepared for continued low
levels of revenue. If necessary, Pulse could continue to operate this way
throughout 2009 and 2010.


Pulse is a market leader in the acquisition, marketing and licensing of
2D and 3D seismic data for the western Canadian energy sector. Pulse owns the
second-largest licensable seismic data library in Canada, currently consisting
of approximately 257,300 net kilometres of 2D seismic and 12,800 net square
kilometres of 3D seismic. The library extensively covers the Western Canada
Sedimentary Basin where most of Canada's oil and natural gas exploration and
development occurs. The replacement value of Pulse's library is currently
estimated at over $1 billion based on current field replacement costs.

Forward Looking Information

This document contains information that constitutes "forward looking
information" or "forward looking statements" (collectively, "forward looking
information") within the meaning of applicable securities legislation. This
forward looking information includes, among other things, statements

- estimated future demand for seismic data;
- estimated future seismic data sales;
- estimated future demand for participation surveys;
- estimated costs, funding, size, commencement dates and delivery dates
of participation surveys;
- planned future participation surveys;
- planned growth of the seismic data library;
- planned future normal course issuer bid purchases;
- Pulse's business strategy; and
- Other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions,
results and performance.

Often, but not always, forward looking information uses words or phrases
such as: "expects", "does not expect" or "is expected", "anticipates" or "does
not anticipate", "plans" or "does not plan", "estimates" or "estimated",
"projects" or "projected", "forecasts" or "forecasted", "believes" or "does
not believe", "intends" or "does not intend", "likely" or "unlikely",
"possible", "probable", "scheduled", "positioned", "goal", "objective",
"hopes", "optimistic" or states that certain actions, events or results
"should", "may", "could", "would", "might" or "will" be taken, occur or be

Undue reliance should not be placed on forward-looking information.
Forward looking information is based upon current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to vary and in some instances to differ materially from those
anticipated in the forward looking information.

The material risk factors include, but are not limited to:

- the demand for seismic data and participation surveys;
- the pricing of data library license sales;
- the level of pre-funding of participation surveys, and the ability of
the Company to make subsequent data library sales from such
participation surveys;
- the ability of the Company to complete participation surveys on time
and within budget;
- the price and demand for oil and natural gas;
- the level of oil and natural gas exploration and development
- the ability of the Company's customers to raise capital;
- environment, health and safety risks;
- the effect of seasonality and weather conditions on participation
- federal and provincial government laws and regulation, including
taxation, royalty rates, environment and safety;
- competition from other seismic data library companies;
- dependence upon qualified seismic field contractors;
- dependence upon key management, operations and marketing personnel;
- protection of Intellectual Property

The foregoing list of risks is not exhaustive. Additional information on
these risks and other factors which could affect the Company's operations or
financial results are included in the Risk Factors section of the Company's
MD&A for the most recent calendar year and interim periods. Forward looking
information is based upon the assumptions, expectations, estimates and
opinions of the Company's management at the time the information is presented.
The Company does not update forward looking information should circumstances
change or management's assumptions, expectations, estimates or opinions
change, except as required by securities laws.

Contact Information