Welcome!

News Feed Item

Calmena Announces First Quarter 2014 Results

CALGARY, ALBERTA -- (Marketwired) -- 05/14/14 -- FIRST QUARTER 2014 RESULTS

Calmena Energy Services Inc. (TSX: CEZ) ("Calmena" or the "Company") announces its financial results for the first quarter ended March 31, 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 (www.sedar.com), 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 months ended

March 31, 2014 and 2013.


                                                     Three months March 31,
($ thousands, except per share amounts)                 2014           2013
----------------------------------------------------------------------------
Revenue                                               18,236         39,510
EBITDAS(i)                                              (502)         4,272
Net loss for the period                               (2,587)        (1,629)
Funds flow from operations(i)                            996          4,312
----------------------------------------------------------------------------
Net loss per share - basic and diluted                 (0.01)         (0.01)
Funds flow from operations per share - basic
 and diluted(i)                                         0.00           0.01
----------------------------------------------------------------------------

(i) see non-GAAP measures section of this
 release for a description of this term.
                                                   March 31,   December 31,
($ thousands)                                           2014           2013
----------------------------------------------------------------------------
Total assets                                         133,161        132,578
Borrowings and debt, net of cash                      40,028         40,111
Shareholders' equity                                  71,936         71,878
----------------------------------------------------------------------------

2014 HEADLINES


--  For the three months ended March 31, 2014, the Company recorded revenue
    of $18.2 million and EBITDAS of negative $0.5 million compared to
    revenue of $35.9 million and EBITDAS of $4.3 million for the comparable
    period in 2013. The main drivers of the decrease are the slowdown in
    industry drilling in Mexico initiated during the second quarter of 2013
    which resulted in the termination of our drilling contracts; the closing
    of contract drilling operations in Brazil and Colombia, and the sale of
    Calmena's Canadian wireline and contract drilling service lines in the
    second and third quarters of 2013.

--  During 2014 we made the decision to close down the directional
    operations in Colombia and Mexico to reduce costs and re-deploy the
    assets to the more profitable US market. These shut downs will be
    substantially complete in the second quarter of 2014.

--  On March 31, 2014, Calmena and its senior lender ("Senior Lender")
    entered into an extension agreement (the "Extension") pursuant to which
    the Senior Lender agreed to continue to forbear from demanding payment
    or enforcing its security under its credit facilities ("Credit
    Facilities") until the earlier of June 30, 2014 or a default as defined
    in the Extension. Pursuant to the terms of the Extension, the Company
    paid $1.0 million to the Senior Lender as a permanent reduction of the
    amount owing under the Credit Facilities on signing the Extension. Also
    pursuant to the Extension, the Company was required, on or before April
    30, 2014, to pay $9.0 million as a permanent reduction of the amount
    owing under the Credit Facilities or provide evidence satisfactory to
    the Senior Lender, by such date, that the Company had entered into one
    or more binding transactions to sell assets that will allow the Company
    to fund the required $9.0 million permanent reduction by May 31, 2014.
    The forbearance term may be further extended to July 31, 2014 if the
    Company provides evidence satisfactory to the Senior Lender, by June 30,
    2014, that the Company has entered into one or more binding transactions
    to sell assets that will allow the Company to fully repay all amounts
    owing under the Credit Facilities by July 31, 2014. The April 30, 2014
    deadline was subsequently extended to May 9, 2014.

--  In May we announced two transactions that will complete the divestiture
    of all of our remaining Canadian service lines.

    --  On May 8, 2014 we announced that we had entered into a definitive
        agreement (the "Agreement") to sell our Equipment Rentals and Frac
        Fluids Management service lines to Great Prairie Energy Services
        Inc.
        (TSX Venture: GPE) ("Great Prairie") for cash consideration of $10.0
        million. The closing is subject to certain customary closing
        conditions, including Great Prairie obtaining approval of the
        transaction from the TSX Venture Exchange. The sale is expected to
        close on or about May 15, 2014. Proceeds from this sale in the
        amount of $9.0 million will fund a reduction of amounts owing by
        Calmena under its credit facilities with its senior lender. The
        remaining $1.0 million will fund general working capital
        requirements. On closing, the $9.0 million repayment will meet the
        initial repayment condition described in the above noted Extension.

    --  On May 9, 2014 we announced that we had sold our Canadian based
        Drilling Technologies research and manufacturing division and
        certain related assets to FastCAP Systems Corporation ("FastCAP")
        for consideration comprised of US$1.0 million cash and US$1.2
        million of in kind consideration, in the form of services and
        technology products provided to Calmena by FastCAP over the next
        four years. The US$1.0 million cash proceeds from this transaction
        was used to fund a reduction of amounts owing by Calmena under its
        credit facilities with its senior lender.

--  Net debt(i) as at March 31, 2014 was $34.6 million compared to $46.3
    million as at March 31, 2013. If the above transactions had occurred on
    March 31, 2014, net debt would have been $23.6 million.

(i) see non-GAAP measures section of this release for a description of this term.

OUTLOOK

During the first quarter of 2014, our US directional services business experienced higher levels of activity, revenue and profitability than the same quarter in 2013. We anticipate this trend will continue for the remainder of the year, on a year over year basis. We continue to focus on our core midcontinent operating area, are repatriating equipment from Latin America to service increased activity levels in the U.S., have a number of directional kits tied to key customer rigs, and have taken additional cost reduction measures.

In Mexico, the activity ramp up expected from the Pemex award of eight large projects to integrated service providers during the first quarter of 2014 has not yet materialized. We are continuing to see significant bidding activity which we anticipate will result in improving utilization for our drilling rigs. While we expect improvements may start in the coming months, the timing of initiation of operations on these projects remains difficult to predict. In April we made the decision to close down the directional services operations in Mexico to reduce costs and re-deploy the assets to the more profitable US market. This shut down of directional services in Mexico will be substantially complete in the second quarter of 2014.

In the first quarter of 2014 we made the decision to close down our operations in Colombia to reduce costs and re-deploy the assets to the more profitable US market. We expect the shutdown will be substantially complete in the second quarter of 2014.

Calmena's Brazilian rigs are not currently contracted. The Company continues to explore strategic opportunities to divest of these rigs.

Late in the first quarter of 2014, Calmena received notice from its customer in Libya that operations on both drilling rigs were being suspended for an unspecified period as a result of the political environment. The political environment in Libya remains volatile and will significantly influence financial results.

Management continues to focus on opportunities to deploy our Mexico drilling rigs, increase utilization in the US and manage costs across the Company to reflect current activity levels. 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 Canada, 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 anticipated timing of completion of the shut down of Calmena's directional operations in Colombia and Mexico; the deadline for payment by Calmena of amounts owing under its Credit Facilities and the potential for an extension of the deadline if certain conditions are met; the satisfaction of the conditions to closing of the transaction with Great Prairie and the anticipated timing of closing of the transaction; the anticipated use of the proceeds received by Calmena from the transaction with Great Prairie; Calmena's expectations regarding directional services operations in the US for the remainder of the year and the Company's focus on its core midcontinent operating area; anticipated effect of increased bidding activity on utilization for Calmena's drilling rigs; the Company's expectations that improvements in utilization may start in the coming months; the Company's plans to continue to explore strategic opportunities to divest of its Brazilian rigs; the Company's expectations that the volatile political environment in Libya could have a significant impact 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; failure to complete the transaction with Great Prairie on the timing anticipated or at all; 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 www.sedar.com.

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:


     EBITDAS (Earnings before interest, income taxes, depreciation and
     amortization, other items of income and expense and share based
     compensation) - Management believes that EBITDAS as derived from
     information reported in the unaudited condensed Consolidated Statement
     of Operations is a useful supplemental measure as it provides an
     indication of the Company's ability to generate funds by the Company's
     core business activities prior to consideration of how those
     activities are financed, the impact of foreign exchange, how the
     results are taxed, how funds are invested or how non-cash depreciation
     and amortization charges affect results. See the reconciliation of
     EBITDAS to net income (loss) in the Company's management's discussion
     and analysis for the three months ended March 31, 2014.

     Funds flow from operations: Management believes that in addition to
     cash generated from operations, funds flow from operations is a useful
     supplemental measure because it provides an indication of the funds
     generated by the Corporation's principal business activities prior to
     the consideration of working capital, which is primarily made up of
     highly liquid balances. See the reconciliation of funds flow from
     operations in the Company's management's discussion and analysis for
     the three months ended March 31, 2014.

     Net debt: Management believes that net debt is a useful supplemental
     measure because it provides an indication of the Company's leverage
     compared to liquid assets. Net debt is computed by taking current
     assets less current liabilities and long-term borrowings and debt.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contacts:
John King
President and Chief Executive Officer

Peter Balkwill
Vice President, Finance & CFO

Calmena Energy Services Inc.
(403) 225-3879
(403) 366-2066 (FAX)
www.calmena.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The WebRTC Summit New York, to be held June 6-8, 2017, at the Javits Center in New York City, NY, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 20th International Cloud Expo and @ThingsExpo. WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web ...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Phil Hombledal, Solution Architect at CollabNet, discussed how customers are able to achieve a level of transparency that e...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera MyS...
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, will share examples from a wide range of industries – includin...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...