CALGARY, ALBERTA — (Marketwired) — 11/14/14 — THIRD QUARTER 2014 RESULTS
Calmena Energy Services Inc. (“Calmena” or the “Company”) (TSX: CEZ) announces its financial results for the third quarter ended September 30, 2014. All figures are reported in Canadian dollars unless otherwise stated. Our unaudited condensed consolidated financial statements and related management–s discussion and analysis for the period will be filed separately on SEDAR (), which should be reviewed in conjunction with this press release.
SELECTED FINANCIAL INFORMATION
The tables below provide a summary of Calmena–s financial and operating results as at and for the three and nine months ended September 30, 2014 and 2013.
2014 HEADLINES
(i)see non-GAAP measures of this report for description of this term.
OUTLOOK
Our US directional services business had a very strong third quarter as horizontal drilling activity in our core midcontinent market continued to be strong. We expect industry horizontal drilling activity in our area to remain strong over the near term. During the fourth quarter we experienced high employee turnover which has resulted in a significant reduction in our revenue base. We have filled key management and sales positions with experienced personnel, adjusted our cost base accordingly and are focusing on replacing the lost revenue. Leveraging off our extensive experience in the area and our new management and sales team, we believe there is ample opportunity to rebuild our customer base and our operation over a relatively short time period. As a result, we expect that fourth quarter results will reflect significantly lower revenue and operating days, the effect of our rebuilding efforts should become evident at the beginning of 2015.
In Mexico, we commenced drilling operations on a five month contract for one rig at the end of August. We have responded to other bids and anticipate that this could result in an additional rig returning to work towards the end of year and into the beginning of 2015.
Libyan drilling operations were suspended late in the first quarter of the year by our customer on both drilling rigs. The political environment remains volatile and will continue to have a significant influence on financial results.
Management continues to focus on opportunities to deploy our Mexico drilling rigs, increase utilization of our directional drilling assets in the US and manage costs across the Company to reflect current activity levels. The sale of Brazil operations and the shutdown of Colombia and Mexico directional services have all contributed to reduce costs. In parallel, management continues to explore strategic alternatives to monetize under-utilized assets, and consider business combination opportunities.
ABOUT CALMENA ENERGY SERVICES INC.
Calmena is a diversified energy services company that provides well construction services to its customers operating in the United States, Latin America and the Middle East and North Africa. The common shares of Calmena trade on the Toronto Stock Exchange under the symbol “CEZ”.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements relating to Calmena–s plans, strategies, objectives, expectations and intentions. Expressions such as “may”, “anticipate”, “expect”, “project”, “believe”, “hope”, “estimate”, “intend”, “will”, “continue”, “foresee”, and “forecast” and similar expressions and statements are intended to identify forward looking statements. Such statements represent Calmena–s internal projections, estimates or beliefs concerning, among other things, an outlook for the Company–s operations and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Calmena believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Calmena–s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Calmena.
In particular, forward-looking statements included in this press release include, but are not limited to, statements with respect to the deadline for payment by Calmena of amounts owing under its Credit Facilities; Calmena–s expectations regarding directional services operations in the US in the near term, including horizontal drilling activity. Calmena–s expectations regarding additional rigs returning to work in Mexico towards the end of the year and into 2015 and anticipated effect on cash flow; Calmena–s expectations that it can rebuild its customer base and directional services operations over a relatively short time period and replace lost revenues from recent employee turnover; the Company–s expectations that fourth quarter results will reflect significantly lower revenue and operating days in respect of the directional services operations; Calmena–s anticipation that its rebuilding efforts will become evident at the beginning of 2015; the Company–s expectations that the volatile political environment in Libya will continue to have a significant influence on financial results; the Company–s plans to continue to focus on opportunities to deploy its Mexico drilling rigs, to increase utilization in the US and manage costs across the Company to reflect current activity levels; the Company–s plans to explore alternatives to monetize under-utilized assets and consider business combination opportunities; and the statements under the heading “Outlook” in this press release.
These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Calmena–s control, including, but not limited to, the risk that the Company is unable to refinance or extend the deadline for repayment of the Credit Facilities; risk that the lender under the Credit Facilities will take further steps to demand payment under the Credit Facilities or enforce its security thereunder in the immediate future; failure to realize the anticipated benefits of strategic dispositions; failure to successfully negotiate and/or complete further transactions pursuant to the Company–s strategic alternatives process; failure to achieve an increase in demand for the Company–s drilling rigs and other product offerings; the impact of general economic conditions; industry conditions and changes in industry conditions; volatility of commodity prices; decreased demand for energy services; competition from other energy services providers; the lack of availability of qualified personnel or management; ability of Calmena to re-finance or extend the maturity date of its senior debt and generate positive cash flow; failure of counter parties to perform on contracts; failure to successfully negotiate new contracts or renew existing contracts; failure to successfully deploy rigs; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; risks associated with international operations, including, but not limited to, effect of civil unrest on the Company–s operations in Libya; seasonality; loss of key customers; fluctuations in foreign exchange or interest rates and stock market volatility; supply and demand for oilfield services relating to the drilling, completion and maintenance of oil and gas wells as well as services related to, oilfield equipment rentals and production and ancillary services; liabilities and risks, including environmental liabilities and risks inherent in oil and natural gas operations; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; ability to access sufficient capital from internal and external sources; and the other risks considered under “Risk Factors” in our annual information form for the year ended December 31, 2013 which is available on .
With respect to forward-looking statements contained in this press release, Calmena has made assumptions regarding, but not limited to: the implementation of the Company–s business prospects and strategies; the ability of the Company to continue as a going concern and continue operations; current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; ability of Calmena to re-finance or extend the deadline for repayment of its senior debt; that the Senior Lender will forbear from taking further steps to demand repayment or enforcing their security under the Credit Facilities; ability of Calmena to renew existing contracts and enter into new contracts; rig utilization and pricing; future exchange rates; the impact of increasing competition; conditions in general economic and financial markets; industry conditions; supply and demand for oilfield services relating to the drilling, completion and maintenance of oil and gas wells as well as services related to oilfield equipment rentals and production and ancillary services; effects of regulation by governmental agencies; trends in Calmena–s operations; and future operating costs.
Management has included the above summary of assumptions and risks related to forward-looking statements provided in this press release in order to provide shareholders with a more complete perspective on Calmena–s current and future operations and such information may not be appropriate for other purposes. Calmena–s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Calmena will derive therefrom. Readers are cautioned that the foregoing lists of factors are not exhaustive.
These forward-looking statements are made as of the date of this press release and Calmena disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
NON GAAP MEASURES
The following measures are used within this release, but not recognized under GAAP. As a result, the method of calculation may not be comparable with other companies. These measures should not be considered alternatives to net (loss) income and net (loss) income per share as calculated in accordance with GAAP:
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Contacts:
Calmena Energy Services Inc.
John King
President and Chief Executive Officer
(403) 225-3879
(403) 366-2066 (FAX)
Calmena Energy Services Inc.
Peter Balkwill
Vice President, Finance & CFO
(403) 225-3879
(403) 366-2066 (FAX)