TSX Venture: "DAL"
EDMONTON, Nov. 21, 2013 /CNW/ - John Babic, President and CEO of Dalmac Energy
Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce fiscal 2014 second
quarter financial results for the three month and six month periods ended
October 31, 2013.
Revenue in the second quarter was $9.3 million as compared with $10.1 million
in the second quarter of the prior year. Net Earnings for Q2'14 were $313K as
opposed to $719K in the previous year. Gross margin of 27% for the current
quarter represents an increase of 9% over Q1'14 and is only 2% shy of the 29%
for YTD'13. Given that the majority of Dalmac's service activity in Q2'14 was
production related this is a positive indicator of improving profitability as
production operations are more price sensitive than drilling and completions.
The margin is expected to continue to improve with the advent of more drilling
and completion activity. The Q2'14 EBITDAS declined 25% to $1.3M and was
down 52% for the year to date.
The current quarter (Q2'14) was impacted by Canadian natural gas prices which
fell sharply in July on the announcement that TransCanada Corp. intended to
raise its short-term tolls on its cross-country natural gas pipelines in an
effort to get shippers to sign up for long-term contracts. Producers reacted
by putting more gas into storage rather than shipping it. This set the stage
for lower gas pricing which is expected to linger until the onset of the
winter heating season. According to a Bloomberg News Report on September 13,
gas shipped from the Alberta AECO hub traded at a discount of $1.72 per MMBtu
which is the widest since November 2009. The average discount price last year
was about $0.54. Oil prices were also impacted by pipeline charges. As of the
aforementioned date, western Canadian Select prices were discounted by $27/bbl
from the WTI price. This was the steepest discount since March 4, 2013. The
net impact of all this to Dalmac is that it pushed back the start of the
drilling and completion season by about 2 months.
(in thousands of dollars,
except per share data) Q2 2014 Q2 2013 YTD 2014 YTD 2013
Revenues $9,330 $10,153 $16,944 $18,299
Gross margin 2,477 3,046 3,841 5,227
Gross margin % 27% 30% 23% 29%
EBITDAS(1) 1,272 1,693 1,291 2,700
EBIDTAS per share -- basic 0.05 0.07 0.06 0.13
Net income 313 719 (388) 958
Net income per share -- 0.01 0.03 (0.02) 0.05
Net income per share -- 0.01 0.03 (0.02) 0.05
(1) EBITDAS stands for earnings before interest, taxes, depreciation,
amortization, and stock based compensation.
Dalmac continues to believe oilfield services activity for the remainder of
2013 will improve as the cold weather kicks in and narrows the oil and gas
price differentials by increasing demand. Also in October 2013, Dalmac entered
into a rental agreement with a frac tank provider which will enable the
Company to bid on entire frac jobs requiring water storage capacities ranging
from 1420m3 to 6550m3. This will not only help our customers increase their
water management efficiencies but will also create more demand for our fluid
hauling operations. The outlook for the longer term is equally gratifying as
new liquefied natural gas projects gain approval and crude oil transportation
capacity increases as a result of rail and pipeline development. Dalmac
expects that the forecasted drilling activity increases in the Duvernay and
Montney resource plays of Alberta will not only stimulate more production
opportunities but will also create more demand for all of the Company's
products and services. Currently, the largest challenges facing the oilfield
services industry are producer spending constraints, pricing differentials on
Canadian crude oil, historically low natural gas prices, and the challenge to
attract and retain skilled labour. Dalmac believes that its new and expanded
product and equipment mix along with its corporate culture will provide a
distinct advantage in retaining and attracting qualified individuals. Dalmac
is of the view that its strong customer base and solid reputation will provide
a compelling competitive advantage which will enable the Company to continue
its growth strategy and enable it to perform better than its current industry
A conference call to discuss the results will be held Thursday, November 21,
2013, at 1:30 pm EST/11:30 am MST.
To participate in the conference call, please dial 416-644-3417 local in
Toronto or toll-free 1-800-814-4861 and request the Dalmac Energy conference.
Statements throughout this report that are not historical facts may be
considered 'forward looking statements'. Such statements are based on
current expectations that involve risks and uncertainties, which could cause
actual results to differ from those anticipated. Important factors that can
cause anticipated outcomes to differ materially from actual outcomes include
the impact of general economic conditions, industry conditions, competition
from other industry participants, volatility of petroleum prices, the ability
to attract and retain qualified personnel, changes in laws or regulation,
currency fluctuations, continued ability to access capital from available
facilities and environmental risks. References to "Dalmac', the
"Corporation", "Company", "us", "we", and "our" mean Dalamc Energy Inc. and
its subsidiary Dalmac Oilfield Services Inc. The TSX Venture Exchange does
not accept responsibility for the adequacy or accuracy of this release. We
seek safe harbor.
SOURCE Dalmac Energy Inc.
John Beasley - CFO - Dalmac Energy Tel: 780-988-8510 Ext. 227
Doren Quinton, President QIS Capital Corp. Ph: (250) 377-1182
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CO: Dalmac Energy Inc.
NI: OIL ERN CONF
-0- Nov/21/2013 14:00 GMT
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