Total Energy Services Inc. Announces Q2 2024 Results
In This Article:
CALGARY, Alberta, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and six months ended June 30, 2024.
Financial Highlights
($000’s except per share data)
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| Three months ended |
| Six months ended | ||||||||||
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|
| 2024 |
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| 2023 | Change |
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| 2024 |
|
| 2023 | Change |
| Revenue | $ | 213,334 |
| $ | 208,845 | 2% |
| $ | 418,020 |
| $ | 446,622 | (6%) |
| Operating income |
| 14,612 |
|
| 9,401 | 55% |
|
| 36,642 |
|
| 37,421 | (2%) |
| EBITDA (1) |
| 37,447 |
|
| 30,255 | 24% |
|
| 80,737 |
|
| 78,730 | 3% |
| Cashflow |
| 38,094 |
|
| 29,408 | 30% |
|
| 70,931 |
|
| 78,080 | (9%) |
| Net income |
| 15,454 |
|
| 6,180 | 150% |
|
| 30,917 |
|
| 30,218 | 2% |
| Attributable to shareholders |
| 15,472 |
|
| 6,201 | 150% |
|
| 30,954 |
|
| 30,241 | 2% |
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| Per Share Data (Diluted) |
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| EBITDA (1) | $ | 0.93 |
| $ | 0.74 | 26% |
| $ | 2.00 |
| $ | 1.89 | 6% |
| Cashflow | $ | 0.95 |
| $ | 0.72 | 32% |
| $ | 1.75 |
| $ | 1.88 | (7%) |
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| Attributable to shareholders: |
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| Net income | $ | 0.39 |
| $ | 0.15 | 160% |
| $ | 0.77 |
| $ | 0.73 | 5% |
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| Common shares (000’s)(4) |
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| Basic |
| 39,329 |
|
| 40,325 | (2%) |
|
| 39,740 |
|
| 40,821 | (3%) |
| Diluted |
| 40,060 |
|
| 41,048 | (2%) |
|
| 40,453 |
|
| 41,568 | (3%) |
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| June 30 |
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| December 31 |
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| Financial Position at |
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| 2024 |
|
| 2023 | Change |
| Total Assets |
| $ | 936,356 |
| $ | 861,658 | 9% | ||||||
| Long-Term Debt and Lease Liabilities (excluding current portion) | 100,983 |
|
| 100,834 | - | ||||||||
| Working Capital (2) |
|
| 71,816 |
|
| 123,439 | (42%) | ||||||
| Net Debt (3) |
|
| 29,167 |
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| - | nm | ||||||
| Shareholders’ Equity |
|
| 549,999 |
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| 530,758 | 4% | ||||||
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Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.
nm – calculation not meaningful
Total Energy’s results for the three months ended June 30, 2024 represent record second quarter financial results. Relatively stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment more than offset a year over year decline in drilling and completion activity in the United States.
Contract Drilling Services (“CDS”)
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|
| Three months ended |
| Six months ended | |||||||||
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| 2024 |
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| 2023 | Change |
| 2024 |
|
| 2023 | Change | |
| Revenue | $ | 67,889 |
| $ | 54,282 | 25% |
| $ | 149,100 |
| $ | 136,818 | 9% |
| EBITDA (1) | $ | 14,505 |
| $ | 9,891 | 47% |
| $ | 36,851 |
| $ | 30,160 | 22% |
| EBITDA (1) as a % of revenue |
| 21% |
|
| 18% | 17% |
|
| 25% |
|
| 22% | 14% |
| Operating days(2) |
| 2,075 |
|
| 1,974 | 5% |
|
| 4,851 |
|
| 4,843 | - |
| Canada |
| 1,082 |
|
| 1,094 | (1%) |
|
| 3,093 |
|
| 3,014 | 3% |
| United States |
| 346 |
|
| 571 | (39%) |
|
| 705 |
|
| 1,161 | (39%) |
| Australia |
| 647 |
|
| 309 | 109% |
|
| 1,053 |
|
| 668 | 58% |
| Revenue per operating day(2), dollars | $ | 32,718 |
| $ | 27,498 | 19% |
| $ | 30,736 |
| $ | 28,251 | 9% |
| Canada |
| 25,563 |
|
| 25,396 | 1% |
|
| 26,805 |
|
| 26,431 | 1% |
| United States |
| 28,905 |
|
| 27,319 | 6% |
|
| 28,909 |
|
| 28,227 | 2% |
| Australia |
| 46,722 |
|
| 35,275 | 32% |
|
| 43,506 |
|
| 36,500 | 19% |
| Utilization |
| 22% |
|
| 23% | (4%) |
|
| 26% |
|
| 29% | (10%) |
| Canada |
| 15% |
|
| 16% | (6%) |
|
| 22% |
|
| 22% | - |
| United States |
| 32% |
|
| 52% | (38%) |
|
| 32% |
|
| 51% | (37%) |
| Australia |
| 44% |
|
| 68% | (35%) |
|
| 48% |
|
| 74% | (35%) |
| Rigs, average for period |
| 105 |
|
| 94 | 12% |
|
| 101 |
|
| 94 | 7% |
| Canada |
| 77 |
|
| 76 | 1% |
|
| 77 |
|
| 76 | 1% |
| United States |
| 12 |
|
| 12 | - |
|
| 12 |
|
| 13 | (8%) |
| Australia |
| 16 |
|
| 5 | 220% |
|
| 12 |
|
| 5 | 140% |
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Operating days includes drilling and paid standby days.
Canadian drilling activity during the second quarter of 2024 was consistent with 2023. The decline in United States drilling activity that began in the third quarter of 2023 continued into the second quarter of 2024. In Australia, Saxon contributed $19.2 million of revenue during the second quarter of 2024. The substantial year over year increase in second quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.
Rentals and Transportation Services (“RTS”)
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|
| Three months ended |
| Six months ended | |||||||||
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| 2024 |
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| 2023 | Change |
| 2024 |
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| 2023 | Change | |
| Revenue | $ | 17,798 |
| $ | 19,812 | (10%) |
| $ | 40,177 |
| $ | 44,225 | (9%) |
| EBITDA (1) | $ | 6,064 |
| $ | 7,064 | (14%) |
| $ | 15,779 |
| $ | 16,714 | (6%) |
| EBITDA (1) as a % of revenue |
| 34% |
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| 36% | (6%) |
|
| 39% |
|
| 38% | 3% |
| Revenue per utilized piece of equipment, dollars | $ | 16,257 |
| $ | 15,428 | 5% |
| $ | 28,543 |
| $ | 22,291 | 28% |
| Pieces of rental equipment |
| 7,940 |
|
| 7,667 | 4% |
|
| 7,940 |
|
| 7,667 | 4% |
| Canada |
| 7,030 |
|
| 6,779 | 4% |
|
| 7,030 |
|
| 6,779 | 4% |
| United States |
| 910 |
|
| 888 | 2% |
|
| 910 |
|
| 888 | 2% |
| Rental equipment utilization |
| 14% |
|
| 15% | (7%) |
|
| 18% |
|
| 21% | (14%) |
| Canada |
| 12% |
|
| 14% | (14%) |
|
| 15% |
|
| 18% | (17%) |
| United States |
| 32% |
|
| 34% | (6%) |
|
| 35% |
|
| 40% | (13%) |
| Heavy trucks |
| 66 |
|
| 69 | (4%) |
|
| 66 |
|
| 69 | (4%) |
| Canada |
| 45 |
|
| 48 | (6%) |
|
| 45 |
|
| 48 | (6%) |
| United States |
| 21 |
|
| 21 | - |
|
| 21 |
|
| 21 | - |
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
Second quarter revenue in the RTS segment decreased as compared to 2023 due to lower industry activity in the United States. The year-over-year decline in second-quarter EBITDA and EBITDA margin was a result of lower equipment utilization given this segment’s relatively high fixed cost structure. Partially offsetting the impact of lower equipment utilization on revenue and EBITDA was a modest increase in revenue per utilized piece of equipment.
Compression and Process Services (“CPS”)
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|
| Three months ended |
| Six months ended | |||||||||
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| 2024 |
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| 2023 | Change |
| 2024 |
|
| 2023 | Change | |
| Revenue | $ | 109,454 |
| $ | 113,130 | (3%) |
| $ | 186,980 |
| $ | 211,248 | (11%) |
| EBITDA (1) | $ | 17,559 |
| $ | 12,399 | 42% |
| $ | 28,459 |
| $ | 24,998 | 14% |
| EBITDA (1) as a % of revenue |
| 16% |
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| 11% | 45% |
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| 15% |
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| 12% | 25% |
| Horsepower of equipment on rent at period end |
| 54,476 |
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| 41,842 | 30% |
|
| 54,476 |
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| 41,842 | 30% |
| Canada |
| 16,156 |
|
| 19,202 | (16%) |
|
| 16,156 |
|
| 19,202 | (16%) |
| United States |
| 38,320 |
|
| 22,640 | 69% |
|
| 38,320 |
|
| 22,640 | 69% |
| Rental equipment utilization during the period (HP)(2) |
| 80% |
|
| 78% | 3% |
|
| 77% |
|
| 78% | (1%) |
| Canada |
| 70% |
|
| 84% | (17%) |
|
| 69% |
|
| 78% | (12%) |
| United States |
| 84% |
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| 73% | 15% |
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| 80% |
|
| 77% | 4% |
| Sales backlog at period end, $ million | $ | 204.6 |
| $ | 185.6 | 10% |
| $ | 204.6 |
| $ | 185.6 | 10% |
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Rental equipment utilization is measured on a horsepower basis.
The year-over-year decrease in the CPS segment’s second quarter revenue was due primarily to lower fabrication sales resulting from a shift in customer preference towards renting compression units in the United States. The resulting increase in horsepower on rent contributed to improved second quarter EBITDA and EBITDA margins for 2024 as compared to 2023. The fabrication sales backlog strengthened during the second quarter of 2024, increasing by $18.9 million from the $185.7 million sales backlog at March 31, 2024.
Well Servicing (“WS”)
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|
| Three months ended |
| Six months ended | |||||||||
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|
| 2024 |
|
| 2023 | Change |
| 2024 |
|
| 2023 | Change | |
| Revenue | $ | 18,193 |
| $ | 21,621 | (16%) |
| $ | 41,763 |
| $ | 54,331 | (23%) |
| EBITDA (1) | $ | 2,087 |
| $ | 2,854 | (27%) |
| $ | 6,401 |
| $ | 11,133 | (43%) |
| EBITDA (1) as a % of revenue |
| 11% |
|
| 13% | (15%) |
|
| 15% |
|
| 20% | (25%) |
| Service hours(2) |
| 18,063 |
|
| 22,630 | (20%) |
|
| 42,627 |
|
| 55,876 | (24%) |
| Canada |
| 8,410 |
|
| 9,357 | (10%) |
|
| 23,817 |
|
| 26,848 | (11%) |
| United States |
| 3,115 |
|
| 5,767 | (46%) |
|
| 6,630 |
|
| 12,411 | (47%) |
| Australia |
| 6,538 |
|
| 7,506 | (13%) |
|
| 12,180 |
|
| 16,617 | (27%) |
| Revenue per service hour(2), dollars | $ | 1,007 |
| $ | 955 | 5% |
| $ | 980 |
| $ | 972 | 1% |
| Canada |
| 945 |
|
| 941 | - |
|
| 963 |
|
| 969 | (1%) |
| United States |
| 937 |
|
| 993 | (6%) |
|
| 891 |
|
| 998 | (11%) |
| Australia |
| 1,121 |
|
| 945 | 19% |
|
| 1,060 |
|
| 959 | 11% |
| Utilization(3) |
| 20% |
|
| 25% | (20%) |
|
| 25% |
|
| 32% | (22%) |
| Canada |
| 17% |
|
| 18% | (6%) |
|
| 24% |
|
| 26% | (8%) |
| United States |
| 29% |
|
| 58% | (50%) |
|
| 30% |
|
| 62% | (52%) |
| Australia |
| 25% |
|
| 29% | (14%) |
|
| 23% |
|
| 32% | (28%) |
| Rigs, average for period |
| 79 |
|
| 79 | - |
|
| 79 |
|
| 79 | - |
| Canada |
| 55 |
|
| 56 | (2%) |
|
| 55 |
|
| 56 | (2%) |
| United States |
| 12 |
|
| 11 | 9% |
|
| 12 |
|
| 11 | 9% |
| Australia |
| 12 |
|
| 12 | - |
|
| 12 |
|
| 12 | - |
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby.
(3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.
Second quarter WS segment revenue and EBITDA decreased as compared to 2024 due to lower activity in all jurisdictions. Canadian activity was negatively impacted by lower well abandonment activity. Activity levels in the United States were significantly lower due to reduced industry activity levels, due in part to significant customer consolidation. Field activity in Australia was somewhat restricted during the second quarter of 2024 due to periods of wet weather although price increases following certain rig upgrades mitigated the impact of lower service hours on revenue.
Corporate
During the second quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. $20.7 million of capital expenditures were made during the second quarter of 2024.
Total Energy exited the second quarter of 2024 with $71.8 million of positive working capital, including $24.8 million of cash, and $85 million of available credit under its $175 million of revolving bank credit facilities. Included in working capital at June 30, 2024 is a $42.0 million mortgage loan that became current debt as it matures in April of 2025. Total Energy expects to repay this debt (which bears interest at a fixed rate of 3.10%) at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at June 30, 2024 was 5.62%.
Outlook
Industry conditions remain stable. While North American natural gas spot market price weakness has negatively impacted North American gas drilling activity, particularly in the United States, relatively strong oil prices and the pending completion of several LNG export facilities have provided tailwinds for the North American energy services industry, particularly in Canada.
The significant investment in Total Energy’s Australian business, including the acquisition of Saxon in March, began to pay dividends in the second quarter of 2024. Synergies arising from the ongoing integration of Saxon with Savanna Australia and the completion of several capital projects during the third quarter of 2024 will see this momentum continue. In late July, a Saxon drilling rig was reactivated and in early August a service rig returned to service following its recertification and upgrade. Both rigs are operating under long term contracts. In addition, a newly constructed drilling rig is scheduled to commence operations by September under a long term contract.
Despite weak near term North American natural gas prices, demand for compression and processing equipment remains steady, driven by continued infrastructure investment to support expansion of North American LNG export capacity. The Company’s significant investment in growing the CPS segment’s compression rental fleet during the first half of 2024 was reflected in that segment’s second quarter results. This investment will continue to benefit the CPS segment going forward as it was supported by long term contracts.
Conference Call
At 9:00 a.m. (Mountain Time) on August 9, 2024 Total Energy will conduct a conference call and webcast to discuss its second quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (844) 763-8274 or (647) 484-8814. Those who are unable to listen to the call live may listen to a recording of it on Total Energy’s website. A recording of the conference call will also be available until September 9, 2024 by dialing (855) 669-9658 (passcode 7163493).
Selected Financial Information
Selected financial information relating to the three and six months ended June 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
|
|
| June 30 | December 31 | ||||
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|
| 2024 |
|
| 2023 |
|
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|
| (unaudited) | (audited) | ||||
| Assets |
|
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| ||
| Current assets: |
|
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| ||
| Cash and cash equivalents |
| $ | 24,764 |
| $ | 47,935 |
|
| Accounts receivable |
|
| 146,184 |
|
| 137,604 |
|
| Inventory |
|
| 119,886 |
|
| 98,179 |
|
| Prepaid expenses and deposits |
|
| 14,126 |
|
| 16,735 |
|
|
|
|
| 304,960 |
|
| 300,453 |
|
|
|
|
|
|
|
| ||
| Property, plant and equipment |
|
| 624,058 |
|
| 557,152 |
|
| Deferred income tax asset |
|
| 3,285 |
|
| - |
|
| Goodwill |
|
| 4,053 |
|
| 4,053 |
|
|
|
| $ | 936,356 |
| $ | 861,658 |
|
|
|
|
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|
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| Liabilities & Shareholders' Equity |
|
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| Current liabilities: |
|
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|
|
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| Accounts payable and accrued liabilities |
| $ | 124,314 |
| $ | 116,794 |
|
| Deferred revenue |
|
| 50,025 |
|
| 39,321 |
|
| Contingent consideration on business acquisition |
|
| 2,738 |
|
| - |
|
| Income taxes payable |
|
| 3,898 |
|
| 9,771 |
|
| Dividends payable |
|
| 3,496 |
|
| 3,198 |
|
| Current portion of lease liabilities |
|
| 6,697 |
|
| 5,880 |
|
| Current portion of long-term debt |
|
| 41,976 |
|
| 2,050 |
|
|
|
|
| 233,144 |
|
| 177,014 |
|
|
|
|
|
|
|
| ||
| Long-term debt |
|
| 90,000 |
|
| 90,947 |
|
|
|
|
|
|
|
| ||
| Lease liabilities |
|
| 10,983 |
|
| 9,887 |
|
|
|
|
|
|
|
| ||
| Deferred income tax liability |
|
| 52,230 |
|
| 53,052 |
|
|
|
|
|
|
|
| ||
| Shareholders' equity: |
|
|
|
|
| ||
| Share capital |
|
| 244,223 |
|
| 251,283 |
|
| Contributed surplus |
|
| 4,755 |
|
| 4,805 |
|
| Accumulated other comprehensive loss |
|
| (18,204) |
|
| (25,506) |
|
| Non-controlling interest |
|
| 284 |
|
| 521 |
|
| Retained earnings |
|
| 318,941 |
|
| 299,655 |
|
|
|
|
| 549,999 |
|
| 530,758 |
|
|
|
|
|
|
|
| ||
|
|
| $ | 936,356 |
| $ | 861,658 |
|
|
|
|
|
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Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)
|
|
|
| Three months ended |
| Six months ended | ||||||||
|
|
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Revenue |
| $ | 213,334 |
| $ | 208,845 |
| $ | 418,020 |
| $ | 446,622 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cost of services |
|
| 164,333 |
|
| 169,049 |
|
| 312,562 |
|
| 347,035 |
|
| Selling, general and administration |
|
| 11,441 |
|
| 10,126 |
|
| 24,175 |
|
| 21,559 |
|
| Other (income) expense |
|
| (196) |
|
| (440) |
|
| 124 |
|
| (446) |
|
| Share-based compensation |
|
| 713 |
|
| 367 |
|
| 1,422 |
|
| 756 |
|
| Depreciation |
|
| 22,431 |
|
| 20,342 |
|
| 43,095 |
|
| 40,297 |
|
| Operating income |
|
| 14,612 |
|
| 9,401 |
|
| 36,642 |
|
| 37,421 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Gain on sale of property, plant and equipment |
|
| 404 |
|
| 512 |
|
| 1,000 |
|
| 1,012 |
|
| Finance costs, net |
|
| (2,156) |
|
| (1,796) |
|
| (3,988) |
|
| (3,499) |
|
| Net income before income taxes |
|
| 12,860 |
|
| 8,117 |
|
| 33,654 |
|
| 34,934 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Current income tax expense |
|
| 1,046 |
|
| 47 |
|
| 5,018 |
|
| 371 |
|
| Deferred income tax (recovery) expense |
|
| (3,640) |
|
| 1,890 |
|
| (2,281) |
|
| 4,345 |
|
| Total income tax (recovery) expense |
|
| (2,594) |
|
| 1,937 |
|
| 2,737 |
|
| 4,716 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Net income |
| $ | 15,454 |
| $ | 6,180 |
| $ | 30,917 |
| $ | 30,218 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Net income (loss) attributable to: |
|
|
|
|
|
|
|
|
| ||||
| Shareholders of the Company |
| $ | 15,472 |
| $ | 6,201 |
| $ | 30,954 |
| $ | 30,241 |
|
| Non-controlling interest |
|
| (18) |
|
| (21) |
|
| (37) |
|
| (23) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Income per share |
|
|
|
|
|
|
|
|
| ||||
| Basic |
| $ | 0.39 |
| $ | 0.15 |
| $ | 0.78 |
| $ | 0.74 |
|
| Diluted |
| $ | 0.39 |
| $ | 0.15 |
| $ | 0.77 |
| $ | 0.73 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Consolidated Statements of Comprehensive Income
|
|
|
| Three months ended |
| Six months ended | ||||||||
|
|
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Net income |
| $ | 15,454 |
| $ | 6,180 |
| $ | 30,917 |
| $ | 30,218 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Foreign currency translation |
|
| 5,667 |
|
| (4,682) |
|
| 7,302 |
|
| (5,300) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Total other comprehensive income (loss) for the period |
| 5,667 |
|
| (4,682) |
|
| 7,302 |
|
| (5,300) |
| |
|
|
|
|
|
|
|
|
|
|
| ||||
| Total comprehensive income |
| $ | 21,121 |
| $ | 1,498 |
| $ | 38,219 |
| $ | 24,918 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Total comprehensive income (loss) attributable to: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
| Shareholders of the Company |
| $ | 21,139 |
| $ | 1,519 |
| $ | 38,256 |
| $ | 24,941 |
|
| Non-controlling interest |
|
| (18) |
|
| (21) |
|
| (37) |
|
| (23) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
|
|
| Three months ended | Six months ended | ||||||||||
|
|
| 2024 | 2023 | 2024 | 2023 | ||||||||
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash provided by (used in): |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
| Operations: |
|
|
|
|
|
|
|
|
| ||||
| Net income for the period |
| $ | 15,454 |
| $ | 6,180 |
| $ | 30,917 |
| $ | 30,218 |
|
| Add (deduct) items not affecting cash: |
|
|
|
|
|
|
|
|
| ||||
| Depreciation |
|
| 22,431 |
|
| 20,342 |
|
| 43,095 |
|
| 40,297 |
|
| Share-based compensation |
|
| 713 |
|
| 367 |
|
| 1,422 |
|
| 756 |
|
| Gain on sale of property, plant and equipment |
|
| (404) |
|
| (512) |
|
| (1,000) |
|
| (1,012) |
|
| Finance costs, net |
|
| 2,156 |
|
| 1,796 |
|
| 3,988 |
|
| 3,499 |
|
| Foreign currency translation |
|
| 933 |
|
| (702) |
|
| 663 |
|
| (350) |
|
| Current income tax expense |
|
| 1,046 |
|
| 47 |
|
| 5,018 |
|
| 371 |
|
| Deferred income tax (recovery) expense |
|
| (3,640) |
|
| 1,890 |
|
| (2,281) |
|
| 4,345 |
|
| Income taxes paid |
|
| (595) |
|
| - |
|
| (10,891) |
|
| (44) |
|
| Cashflow |
|
| 38,094 |
|
| 29,408 |
|
| 70,931 |
|
| 78,080 |
|
| Changes in non-cash working capital items: |
|
|
|
|
|
|
|
|
| ||||
| Accounts receivable |
|
| (18) |
|
| 22,124 |
|
| (8,580) |
|
| 5,120 |
|
| Inventory |
|
| (6,960) |
|
| (9,241) |
|
| (21,707) |
|
| (20,044) |
|
| Prepaid expenses and deposits |
|
| (1,103) |
|
| (491) |
|
| 2,609 |
|
| 146 |
|
| Accounts payable and accrued liabilities |
|
| (4,465) |
|
| 14,534 |
|
| 12,867 |
|
| 18,546 |
|
| Deferred revenue |
|
| 3,639 |
|
| (12,432) |
|
| 10,704 |
|
| (8,205) |
|
| Cash provided by operating activities |
|
| 29,187 |
|
| 43,902 |
|
| 66,824 |
|
| 73,643 |
|
| Investing: |
|
|
|
|
|
|
|
|
| ||||
| Purchase of property, plant and equipment |
|
| (20,703) |
|
| (12,665) |
|
| (50,338) |
|
| (42,454) |
|
| Cash paid on acquisition |
|
| - |
|
| - |
|
| (47,350) |
|
| - |
|
| Proceeds on disposal of property, plant and equipment |
|
| 922 |
|
| 741 |
|
| 1,549 |
|
| 1,504 |
|
| Changes in non-cash working capital items |
|
| (305) |
|
| (10,229) |
|
| 3,701 |
|
| 2,504 |
|
| Cash used in investing activities |
|
| (20,086) |
|
| (22,153) |
|
| (92,438) |
|
| (38,446) |
|
| Financing: |
|
|
|
|
|
|
|
|
| ||||
| Advancements of long-term debt |
|
| - |
|
| - |
|
| 60,000 |
|
| - |
|
| Repayment of long-term debt |
|
| (10,513) |
|
| (10,496) |
|
| (21,021) |
|
| (15,993) |
|
| Repayment of lease liabilities |
|
| (1,763) |
|
| (1,539) |
|
| (3,392) |
|
| (3,156) |
|
| Dividends to shareholders |
|
| (3,596) |
|
| (3,242) |
|
| (6,794) |
|
| (5,732) |
|
| Repurchase of common shares |
|
| (11,946) |
|
| (3,275) |
|
| (12,670) |
|
| (11,289) |
|
| Shares issued on exercise of stock options |
|
| 64 |
|
| - |
|
| 64 |
|
| - |
|
| Partnership distributions |
|
| - |
|
| - |
|
| (200) |
|
| - |
|
| Interest paid |
|
| (1,622) |
|
| (1,559) |
|
| (13,544) |
|
| (3,222) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash (used in) from financing activities |
|
| (29,376) |
|
| (20,111) |
|
| 2,443 |
|
| (39,392) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Change in cash and cash equivalents |
|
| (20,275) |
|
| 1,638 |
|
| (23,171) |
|
| (4,195) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash and cash equivalents, beginning of period |
|
| 45,039 |
|
| 28,228 |
|
| 47,935 |
|
| 34,061 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash and cash equivalents, end of period |
| $ | 24,764 |
| $ | 29,866 |
| $ | 24,764 |
| $ | 29,866 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Segmented Information
The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.
As at and for the three months ended June 30, 2024 (unaudited, in thousands of Canadian dollars)
|
|
| Contract |
| Rentals and |
| Compression |
| Well | Corporate |
| Total | |||||||
|
|
| Drilling |
| Transportation |
| and Process |
| Servicing |
| (1) |
|
|
| |||||
|
|
| Services |
| Services |
| Services |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Revenue | $ | 67,889 |
| $ | 17,798 |
| $ | 109,454 |
| $ | 18,193 |
| $ | - |
| $ | 213,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Cost of services |
| 51,392 |
|
| 9,853 |
|
| 88,179 |
|
| 14,909 |
|
| - |
|
| 164,333 |
|
| Selling, general and administration |
| 2,060 |
|
| 2,162 |
|
| 3,795 |
|
| 1,173 |
|
| 2,251 |
|
| 11,441 |
|
| Other income |
| - |
|
| - |
|
| - |
|
| - |
|
| (196) |
|
| (196) |
|
| Share-based compensation |
| - |
|
| - |
|
| - |
|
| - |
|
| 713 |
|
| 713 |
|
| Depreciation |
| 12,039 |
|
| 5,019 |
|
| 2,622 |
|
| 2,424 |
|
| 327 |
|
| 22,431 |
|
| Operating income (loss) |
| 2,398 |
|
| 764 |
|
| 14,858 |
|
| (313) |
|
| (3,095) |
|
| 14,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Gain (loss) on sale of property, plant and equipment |
| 68 |
|
| 281 |
|
| 79 |
|
| (24) |
|
| - |
|
| 404 |
|
| Finance costs, net |
| (16) |
|
| (46) |
|
| (110) |
|
| (22) |
|
| (1,962) |
|
| (2,156) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Net income (loss) before income taxes |
| 2,450 |
|
| 999 |
|
| 14,827 |
|
| (359) |
|
| (5,057) |
|
| 12,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Goodwill |
| - |
|
| 2,514 |
|
| 1,539 |
|
| - |
|
| - |
|
| 4,053 |
|
| Total assets |
| 424,342 |
|
| 163,914 |
|
| 276,447 |
|
| 70,130 |
|
| 1,523 |
|
| 936,356 |
|
| Total liabilities |
| 78,649 |
|
| 29,854 |
|
| 106,665 |
|
| 6,063 |
|
| 165,126 |
|
| 386,357 |
|
| Capital expenditures |
| 8,777 |
|
| 2,388 |
|
| 3,732 |
|
| 5,806 |
|
| - |
|
| 20,703 |
|
|
|
|
| Canada |
|
| United States |
|
| Australia |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
| $ | 76,906 |
| $ | 98,471 |
| $ | 37,957 |
| $ | 213,334 |
|
| Non-current assets (2) |
|
| 368,701 |
|
| 137,395 |
|
| 122,015 |
|
| 628,111 |
|
As at and for the three months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)
|
|
| Contract |
| Rentals and |
| Compression |
| Well | Corporate |
| Total | |||||||
|
|
| Drilling |
| Transportation |
| and Process |
| Servicing |
| (1) |
|
|
| |||||
|
|
| Services |
| Services |
| Services |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Revenue | $ | 54,282 |
| $ | 19,812 |
| $ | 113,130 |
| $ | 21,621 |
| $ | - |
| $ | 208,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Cost of services |
| 42,783 |
|
| 10,994 |
|
| 97,513 |
|
| 17,759 |
|
| - |
|
| 169,049 |
|
| Selling, general and administration |
| 1,986 |
|
| 2,076 |
|
| 3,218 |
|
| 1,072 |
|
| 1,774 |
|
| 10,126 |
|
| Other (income) expense |
| (288) |
|
| (7) |
|
| 43 |
|
| - |
|
| (188) |
|
| (440) |
|
| Share-based compensation |
| - |
|
| - |
|
| - |
|
| - |
|
| 367 |
|
| 367 |
|
| Depreciation |
| 9,479 |
|
| 4,845 |
|
| 2,614 |
|
| 3,142 |
|
| 262 |
|
| 20,342 |
|
| Operating income (loss) |
| 322 |
|
| 1,904 |
|
| 9,742 |
|
| (352) |
|
| (2,215) |
|
| 9,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Gain on sale of property, plant and equipment |
| 90 |
|
| 315 |
|
| 43 |
|
| 64 |
|
| - |
|
| 512 |
|
| Finance costs, net |
| (15) |
|
| (17) |
|
| (111) |
|
| (17) |
|
| (1,636) |
|
| (1,796) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Net income (loss) before income taxes |
| 397 |
|
| 2,202 |
|
| 9,674 |
|
| (305) |
|
| (3,851) |
|
| 8,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Goodwill |
| - |
|
| 2,514 |
|
| 1,539 |
|
| - |
|
| - |
|
| 4,053 |
|
| Total assets |
| 354,433 |
|
| 177,972 |
|
| 278,289 |
|
| 75,584 |
|
| 1,839 |
|
| 888,117 |
|
| Total liabilities |
| 65,250 |
|
| 27,464 |
|
| 132,616 |
|
| 6,196 |
|
| 126,637 |
|
| 358,163 |
|
| Capital expenditures |
| 7,614 |
|
| 2,596 |
|
| 542 |
|
| 1,913 |
|
| - |
|
| 12,665 |
|
|
|
| Canada |
|
| United States |
|
| Australia |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue | $ | 83,257 |
| $ | 98,820 |
| $ | 26,768 |
| $ | 208,845 |
|
| Non-current assets (2) |
| 395,421 |
|
| 128,222 |
|
| 47,394 |
|
| 571,037 |
|
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
As at and for the six months ended June 30, 2024 (unaudited, in thousands of Canadian dollars)
|
|
| Contract |
| Rentals and |
| Compression |
| Well | Corporate |
| Total | |||||||
|
|
| Drilling |
| Transportation |
| and Process |
| Servicing |
| (1) |
|
|
| |||||
|
|
| Services |
| Services |
| Services |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Revenue | $ | 149,100 |
| $ | 40,177 |
| $ | 186,980 |
| $ | 41,763 |
| $ | - |
| $ | 418,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Cost of services |
| 107,284 |
|
| 20,768 |
|
| 151,730 |
|
| 32,780 |
|
| - |
|
| 312,562 |
|
| Selling, general and administration |
| 5,066 |
|
| 4,423 |
|
| 6,921 |
|
| 2,558 |
|
| 5,207 |
|
| 24,175 |
|
| Other expense |
| - |
|
| - |
|
| - |
|
| - |
|
| 124 |
|
| 124 |
|
| Share-based compensation |
| - |
|
| - |
|
| - |
|
| - |
|
| 1,422 |
|
| 1,422 |
|
| Depreciation |
| 22,382 |
|
| 10,083 |
|
| 5,211 |
|
| 4,823 |
|
| 596 |
|
| 43,095 |
|
| Operating income (loss) |
| 14,368 |
|
| 4,903 |
|
| 23,118 |
|
| 1,602 |
|
| (7,349) |
|
| 36,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Gain (loss) on sale of property, plant and equipment |
| 101 |
|
| 793 |
|
| 130 |
|
| (24) |
|
| - |
|
| 1,000 |
|
| Finance costs, net |
| (38) |
|
| (87) |
|
| (212) |
|
| (45) |
|
| (3,606) |
|
| (3,988) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Net income (loss) before income taxes |
| 14,431 |
|
| 5,609 |
|
| 23,036 |
|
| 1,533 |
|
| (10,955) |
|
| 33,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Goodwill |
| - |
|
| 2,514 |
|
| 1,539 |
|
| - |
|
| - |
|
| 4,053 |
|
| Total assets |
| 424,342 |
|
| 163,914 |
|
| 276,447 |
|
| 70,130 |
|
| 1,523 |
|
| 936,356 |
|
| Total liabilities |
| 78,649 |
|
| 29,854 |
|
| 106,665 |
|
| 6,063 |
|
| 165,126 |
|
| 386,357 |
|
| Capital expenditures |
| 21,578 |
|
| 5,173 |
|
| 14,187 |
|
| 9,400 |
|
| - |
|
| 50,338 |
|
|
|
|
| Canada |
|
| United States |
|
| Australia |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
| $ | 179,970 |
| $ | 177,588 |
| $ | 60,462 |
| $ | 418,020 |
|
| Non-current assets (2) |
|
| 368,701 |
|
| 137,395 |
|
| 122,015 |
|
| 628,111 |
|
As at and for the six months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)
|
|
| Contract |
| Rentals and |
| Compression |
| Well | Corporate |
| Total | |||||||
|
|
| Drilling |
| Transportation |
| and Process |
| Servicing |
| (1) |
|
|
| |||||
|
|
| Services |
| Services |
| Services |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Revenue | $ | 136,818 |
| $ | 44,225 |
| $ | 211,248 |
| $ | 54,331 |
| $ | - |
| $ | 446,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Cost of services |
| 102,201 |
|
| 23,897 |
|
| 179,485 |
|
| 41,452 |
|
| - |
|
| 347,035 |
|
| Selling, general and administration |
| 4,971 |
|
| 4,134 |
|
| 6,795 |
|
| 1,916 |
|
| 3,743 |
|
| 21,559 |
|
| Other (income) expense |
| (288) |
|
| (7) |
|
| 43 |
|
| - |
|
| (194) |
|
| (446) |
|
| Share-based compensation |
| - |
|
| - |
|
| - |
|
| - |
|
| 756 |
|
| 756 |
|
| Depreciation |
| 18,527 |
|
| 9,717 |
|
| 5,237 |
|
| 6,289 |
|
| 527 |
|
| 40,297 |
|
| Operating income (loss) |
| 11,407 |
|
| 6,484 |
|
| 19,688 |
|
| 4,674 |
|
| (4,832) |
|
| 37,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Gain on sale of property, plant and equipment |
| 226 |
|
| 513 |
|
| 73 |
|
| 170 |
|
| 30 |
|
| 1,012 |
|
| Finance costs, net |
| (30) |
|
| (35) |
|
| (232) |
|
| (33) |
|
| (3,169) |
|
| (3,499) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Net income (loss) before income taxes |
| 11,603 |
|
| 6,962 |
|
| 19,529 |
|
| 4,811 |
|
| (7,971) |
|
| 34,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Goodwill |
| - |
|
| 2,514 |
|
| 1,539 |
|
| - |
|
| - |
|
| 4,053 |
|
| Total assets |
| 354,433 |
|
| 177,972 |
|
| 278,289 |
|
| 75,584 |
|
| 1,839 |
|
| 888,117 |
|
| Total liabilities |
| 65,250 |
|
| 27,464 |
|
| 132,616 |
|
| 6,196 |
|
| 126,637 |
|
| 358,163 |
|
| Capital expenditures |
| 31,434 |
|
| 4,134 |
|
| 2,515 |
|
| 4,371 |
|
| - |
|
| 42,454 |
|
|
|
|
| Canada |
|
| United States |
|
| Australia |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
| $ | 191,384 |
| $ | 203,827 |
| $ | 51,411 |
| $ | 446,622 |
|
| Non-current assets (2) |
|
| 395,421 |
|
| 128,222 |
|
| 47,394 |
|
| 571,037 |
|
(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.
Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.
For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: [email protected] or visit our website at www.totalenergy.ca
| Notes to the Financial Highlights | ||
| (1) |
| EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations. |
| (2) |
| Working capital equals current assets minus current liabilities. |
| (3) |
| Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity. |
| (4) |
| Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 to the Company’s Condensed Interim Consolidated Financial Statements. |
|
|
|
|
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.
In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at https://www.sedarplus.ca/) for a discussion of such risks and uncertainties.
The TSX has neither approved nor disapproved of the information contained herein.