Welcome!

News Feed Item

Hanwei Energy Services Provides Corporate Strategy Update and Reports First Quarter Fiscal 2015 Financial and Operational Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/12/14 -- Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company"), today provided its corporate strategy update for the Company going forward and reported its financial results for the three months ending June 30, 2014. All amounts are in Canadian Dollars unless otherwise noted.

Corporate Strategy

Hanwei's corporate strategy is focussed on: (A) maintaining and growing its FRP pipe manufacturing business while, (B) building recurring revenue, oil and gas production from its operating Leduc Lands in Alberta. These two business operations are highly complimentary in that the Company's activities as an oil and gas producer in Canada provide first hand, end user insight and industry relationships applicable to our engineering, manufacturing and client services activities in our FRP pipe manufacturing. In addition, installation, quality control and R&D experience from our China and international installations in our FRP pipe activities are utilized in the Company's planning, maintenance and production activities.

As a leading manufacturer of FRP pipe products and associated engineering services to the oil and gas industry the Company produces a comprehensive line of small, medium and large diameter FRP pipe, fittings, and fixtures as well as custom FRP system solutions. Hanwei FRP pipe products are characterized for their corrosion resistance, scale and paraffin deterrence, low coefficient of friction resistance, low distance pressure-drop, easy installation and long term operating reliability. The Company has provided FRP piping solutions for several thousands of kilometres of piping and a variety of applications including projects in continued operation at 270 bar (3,900 psi) since 2004. The Company's manufacturing plant is audited and endorsed by the American Petroleum Institute ("API") and is certified by them for API Q1, API 15LR, API 15HR, and ISO 9001. The Company maintains stringent cost controls in its FRP pipe business while also maintaining its commitment to quality and long term performance of its pipe products. With this in place the Company's strategic focus in its FRP pipe business is on sales and the management of its customer relationships. The Company has a number of direct sales and distribution relationships and is actively pursuing strategic sales initiatives in its China, Kazakhstan and other international markets. Particular activities are underway in the Company's Canadian market.

As an operator of its own producing oil and gas properties, the Company owns one core area (its "Leduc Lands") consisting of approximately 4,000 acres of mineral and surface rights located approximately 40 km south west of Edmonton, Alberta. Within the Leduc Lands the Company has a 100% working interest in the wells 15-19-49-26W4M, 10-29-49-26W4M, 8-32-49-26W4M, 14-32-49-26W4M and 13-33-49-26W4M and 60% in 11-33-49-26W4M well. The Company's development program aims to enhance its oil and gas production through both work over of existing wells together with new drilling opportunities, as appropriate, in low to medium risk activities with multi-zone potential. These activities are focused on: (a) work over activities to increase gas production; (b) work over activities to increase oil production stimulated with multi-stage fracturing technology ("frac" or "fracing"); and (c) new horizontal oil wells to be stimulated with multi-stage fracturing technology. Hanwei intends to commission and publish its initial Reserve Report for its Leduc Lands during the second quarter of fiscal 2015.

Key Updates

Update on FRP Pipe Sales in Canada

Hanwei was awarded in early August a new $665,000 order, placed by a Canadian client, for the supply of the Company's high pressure, glass reinforced epoxy pipes and fittings. This is the third order that the Company has confirmed in its Canada market, which now total approximately $1.2 million of pipe delivered or ordered over the last twelve months. These Canadian market orders are for the Company's high-pressure 3", 4" and 6" diameter flow line products. Of these Canadian orders Hanwei has approximately 6,000 metres of its high pressure pipe operational in four projects. This includes installations with one of Canada's major oil and gas companies with significant Bakken holdings in southern Saskatchewan.

Update on Oil and Gas Activities

The Company began operations of its Leduc Lands on May 1, 2014 with the exception of its section 33 lands for which the Company began operations on June 1, 2014. On July 2, 2014 the Company announced the completion of its work over of its existing 14-32-49-26W4 gas well. This existing well was perforated over a three-meter interval at a depth of approximately 1,300 meters into the Ellerslie formation at a total work over cost of approximately $100,000. The Company is monitoring the production rates for optimization of production from the currently producing interval and considers the initial improved gas production from this well a significant success. This well continues to produce gas at a daily average rate of 1,000 thousand cubic feet per day (mcfd) on a restricted choke of 19/64th of an inch.

For the period ended June 30, 2014, the Company produced approximately 820 barrels of oil and approximately 15,700 mcf of gas representing in aggregate approximately 3,500 barrels of oil equivalent ("boe") averaging 57 boed. Revenues from the Company's oil and gas production for the period ended June 30, 2014 amounted to $148,000 with average market price of $88.3/bbl for oil and $4.87/mcf of gas.

Update on Private Placement

The Company announced on July 21, 2014 a non-brokered private placement of a maximum of 25,000,000 common shares in the capital of the Company (a "Common Share") at a price of $0.16 per Common Share for gross proceeds of up to $4,000,000. This private placement was revised such that the Company has received conditional approval from the Toronto Stock Exchange ("TSX") for listing up to a maximum of 30,000,000 Common Shares at a price of $0.192 per Common Share for gross proceeds up to $5,760,000 (the "Private Placement") and subject to the closing of the Private Placement on or before September 4, 2014. Proceeds from this Private Placement will be used for ongoing work over and development activities of the Company's oil and gas holdings in its Leduc Lands in Alberta. None of the subscribers to the Private Placement currently hold any Common Shares of the Company and each is an arm's length individual. The Company is in the process of completing the Private Placement in accordance with applicable securities law and final approval of the TSX.

For the three months ending June 30, 2014:

The Company has two reportable segments for its continuing operations: its FRP pipe manufacturing and its oil and gas production. As before noted the pipe segment produces and sells fiberglass reinforced plastic ("FRP") pipe for the oil and gas industry and other infrastructure applications. The oil and gas segment is engaged in the exploration and production of oil and natural gas in Western Canada.


--  Revenues for the three months ended June 30, 2014 totalled some $3.2
    million as compared to $3.8 million for the prior year consisting of
    approximately $3.05 million contributed by the Company's FRP pipe
    manufacturing business and approximately $148,000 contributed by the
    Company's oil and gas production activities (representing a partial
    period since acquisition as before noted for the quarter).

--  EBITDA from continuing operations for the three months ended June 30,
    2014 totaled negative $142,000 as compared to negative $174,000 for the
    prior year. Negative EBITDA of approximately $63,000 was attributed to
    the Company's FRP pipe manufacturing business due to the volume of sales
    against variable and fixed costs for the period. Negative EBITDA of
    approximately $74,000 was contributed by the Company's oil and gas
    production activities (representing a partial period since acquisition
    as before noted for the quarter).

--  The Company generated positive cash flow from operations of
    approximately $751,000 for the period. As of the date of this MD&A the
    Company's FRP pipe sales orders contracted and yet to be delivered were
    $2.4 million. These sales orders are expected to be completed within the
    fiscal year ending March 31, 2015. Of these sales orders, $0.6 million
    or 25% are from customers in the China market with $1.8 million or 75%
    from customers in international markets.

--  The Company had a loss from continuing operations of $1.2 million for
    the three months ended June 30, 2014 equal to that for the same period
    of the prior year. The Company had basic and diluted loss per share from
    continuing operations of $0.02 for the three months ended June 30, 2014
    as compared to basic and diluted loss per share from continuing
    operations of $0.02 for the same period of 2013.

--  As of June 30, 2014, the Company's Net Asset Value per share for its
    continuing operations was $0.46. This included the acquisition cost and
    initial work over capital expenditures of the Company's Leduc Lands of
    approximately $3.0 million offset by a lower translated value of the
    Company's FRP manufacturing assets in China driven by foreign exchange
    fluctuations.

--  The Company continues to effectively manage its debt facilities. As of
    June 30, 2014 the total principal amount of all bank loans was $5.0
    million.

Hanwei will host a conference call to discuss its operational and financial results for the first quarter ended June 30, 2014. Graham Kwan, Executive Vice President and Rick Huang, Chief Financial Officer of Hanwei will host the call. Management invites analysts and investors to participate on the conference call:


Date:                      Wednesday, August 13, 2014                       
Time:                      1:00 p.m., Eastern Time (10:00 am Pacific Time)  
Dial in number:            1-888-572-7025 or 1-719-457-2645                 

A replay of the conference call will be available on the Company's website www.hanweienergy.com.

About Hanwei Energy Services Corp.

Hanwei Energy Services Corp.'s principal business operations are in two complimentary key segments of the oil and gas industry as both an equipment supplier to the industry (as a leading manufacturer of high pressure, fiberglass reinforced plastic ("FRP") pipe products and associated technologies serving major energy customers in the global energy market) and as an operator of its producing oil and gas mineral rights at its 4,000 acre Leduc Lands in Alberta.

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES

Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company's Annual Information Form dated June 20, 2014 and Management Discussion and Analysis for the year ended March 31, 2014 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company's expectations as of the date of this press release.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.

Contacts:
Hanwei Energy Services Corp.
Graham Kwan
Executive VP, Strategic Development and Corporate Affairs
604-685-2239
gkwan@hanweienergy.com

Hanwei Energy Services Corp.
Yucai (Rick) Huang
Chief Financial Officer
604-685-2239
yhuang@hanweienergy.com
www.hanweienergy.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
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, discussed the impact of technology on identity. Sho...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
In his session at 20th Cloud Expo, Chris Carter, CEO of Approyo, will discuss the basic set up and solution for an SAP solution in the cloud and what it means to the viability of your company. Chris Carter is CEO of Approyo. He works with business around the globe, to assist them in their journey to the usage of Big Data in the forms of Hadoop (Cloudera and Hortonwork's) and SAP HANA. At Approyo, we support firms who are looking for knowledge to grow through current business process, where even ...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
Addteq is one of the top 10 Platinum Atlassian Experts who specialize in DevOps, custom and continuous integration, automation, plugin development, and consulting for midsize and global firms. Addteq firmly believes that automation is essential for successful software releases. Addteq centers its products and services around this fundamentally unique approach to delivering complete software release management solutions. With a combination of Addteq's services and our extensive list of partners,...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...