CALGARY, Alberta, Aug. 11, 2021 (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, 2021.

Financial Highlights
($000’s except per share data)

	Three months ended June 30									Six months ended June 30
		2021			2020		Change				2021			2020		Change
Revenue	$	84,876		$	70,770		20	%		$	178,066		$	205,038		(13	%)
Operating loss		(4,089	)		(37,161	)	(89	%)			(9,508	)		(26,632	)	(64	%)
EBITDA (1)		19,716			12,886		53	%			36,433			43,789		(17	%)
Cashflow		16,462			13,793		19	%			31,794			35,704		(11	%)
Net loss		(2,136	)		(28,845	)	(93	%)			(5,743	)		(24,121	)	(76	%)
Attributable to shareholders		(2,108	)		(28,765	)	(93	%)			(5,687	)		(24,093	)	(76	%)
Per Share Data (Diluted)
EBITDA (1)	$	0.44		$	0.29		52	%		$	0.81		$	0.97		(16	%)
Cashflow	$	0.37		$	0.31		19	%		$	0.70		$	0.79		(11	%)
Attributable to shareholders:
Net loss	$	(0.05	)	$	(0.64	)	(92	%)		$	(0.13	)	$	(0.53	)	(75	%)
Common shares (000’s)(4)
Basic		44,830			45,081		(1	%)			44,950			45,084		–
Diluted		45,066			45,081		–				45,158			45,084		–
											June 30			December 31
Financial Position at											2021			2020		Change
Total Assets										$	811,615		$	849,579		(4	%)
Long-Term Debt and Lease Liabilities (excluding current portion)											210,132			238,937		(12	%)
Working Capital (2)											127,201			138,940		(8	%)
Net Debt (3)											82,931			99,997		(17	%)
Shareholders’ Equity											492,259			510,987		(4	%)

Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.

Total Energy’s results for the three months ended June 30, 2021 reflect challenging but improving industry conditions in North America and lower Australian activity levels as compared to the second quarter of 2020. Included in the financial results for the three months ended June 30, 2021 was $0.6 million of non-recurring equipment reactivation costs. $8.1 million was recorded during the second quarter of 2021 under various COVID-19 relief programs, including the forgiveness of $2.5 million of loans received in 2020 under the United States Paycheck Protection Program.

Contract Drilling Services (“CDS”)

		Three months ended June 30								Six months ended June 30
		2021			2020		Change			2021			2020		Change
Revenue	$	25,740		$	14,170		82	%	$	54,311		$	57,195		(5	%)
EBITDA (1)	$	4,708		$	1,864		153	%	$	10,976		$	10,082		9	%
EBITDA (1) as a % of revenue		18	%		13	%	38	%		20	%		18	%	11	%
Operating days(2)		1,235			440		181	%		2,773			2,606		6	%
Canada		563			72		682	%		1,647			1,529		8	%
United States		467			41		1,039	%		768			368		109	%
Australia		205			327		(37	%)		358			709		(50	%)
Revenue per operating day(2), dollars	$	20,842		$	32,205		(35	%)	$	19,586		$	21,947		(11	%)
Canada		15,625			14,417		8	%		16,175			16,833		(4	%)
United States		19,340			25,537		(24	%)		19,046			21,239		(10	%)
Australia		38,590			36,957		4	%		36,433			33,346		9	%
Utilization		14	%		5	%	180	%		16	%		14	%	14	%
Canada		8	%		1	%	700	%		11	%		10	%	10	%
United States		39	%		3	%	1,200	%		33	%		11	%	200	%
Australia		45	%		72	%	(38	%)		40	%		78	%	(49	%)
Rigs, average for period		97			98		(1	%)		98			106		(8	%)
Canada		79			80		(1	%)		80			82		(2	%)
United States		13			13		–			13			19		(32	%)
Australia		5			5		–			5			5		–

⁽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 stand-by days.

Drilling activity in North America for the second quarter of 2021 was higher compared to the same period in 2020. Second quarter Canadian industry activity levels improved from the historic lows experienced in 2020 and market share gains in the United States drove a significant year over year increase in operating days despite a more muted increase in United States industry activity relative to Canada. Australian industry activity was lower on a year over year basis due to reduced drilling programs and prolonged wet weather conditions that restricted field activity. The first of two Australian drilling rigs removed from service in the third quarter of 2020 for recertification and upgrades was completed during the second quarter and commenced operations in late April 2021. Second quarter CDS segment revenue increased by 82% in 2021 compared to 2020 despite a decrease in revenue per operating day arising from changes in the geographic revenue mix and the mix of equipment operating.   Despite incurring $0.6 million of non-recurring equipment reactivation costs during the second quarter of 2021 as several idle drilling rigs were put back into service in the United States and one rig was returned to service in Australia, ongoing cost management, efficiencies of scale and the receipt of COVID-19 relief funds contributed to the significant year over year second quarter improvement in segment EBITDA. Three mechanical double drilling rigs were decommissioned in Canada during the second quarter of 2021, bringing the current Canadian drilling rig fleet to 77 rigs.

Rentals and Transportation Services (“RTS”)

		Three months ended June 30								Six months ended June 30
		2021			2020		Change			2021			2020		Change
Revenue	$	6,053		$	4,782		27	%	$	13,788		$	21,615		(36	%)
EBITDA (1)	$	3,324		$	865		284	%	$	5,290		$	4,731		12	%
EBITDA (1) as a % of revenue		55	%		18	%	206	%		38	%		22	%	73	%
Revenue per utilized piece of equipment, dollars	$	7,111		$	9,001		(21	%)	$	16,198		$	22,265		27	%
Pieces of rental equipment		10,630			10,640		–			10,630			10,640		–
Canada		9,670			9,710		–			9,670			9,710		–
United States		960			930		3	%		960			930		3	%
Rental equipment utilization		8	%		5	%	60	%		8	%		9	%	(11	%)
Canada		7	%		5	%	40	%		8	%		8	%	–
United States		12	%		11	%	9	%		12	%		28	%	(57	%)
Heavy trucks		80			87		(8	%)		80			87		(8	%)
Canada		56			63		(11	%)		56			63		(11	%)
United States		24			24		–			24			24		–

⁽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 increased as compared to 2020 due to higher Canadian industry activity levels and the commencement of several major Canadian projects that were delayed in the first quarter of 2021 due to COVID-19 and other health and safety concerns unrelated to the Company’s operations or personnel. During the quarter the RTS segment realized a $1.6 million gain on the sale of access matting, underutilized rental equipment and older heavy trucks.   While second quarter revenue increased 27% on a year over year basis, excluding the gain on sale of equipment, segment EBITDA increased 102% as a result of ongoing efforts to right-size this segment’s Canadian operating infrastructure and the receipt of COVID-19 funds.

Compression and Process Services (“CPS”)

		Three months ended June 30								Six months ended June 30
		2021			2020		Change			2021			2020		Change
Revenue	$	33,657		$	30,212		11	%	$	67,813		$	70,956		(4	%)
EBITDA (1)	$	7,682		$	5,886		31	%	$	11,257		$	11,116		1	%
EBITDA (1) as a % of revenue		23	%		19	%	21	%		17	%		16	%	6	%
Horsepower of equipment on rent at period end		27,420			33,200		(17	%)		27,420			33,200		(17	%)
Canada		11,840			18,440		(36	%)		11,840			18,440		(36	%)
United States		15,580			14,760		6	%		15,580			14,760		6	%
Rental equipment utilization during the period (HP)(2)		47	%		65	%	(28	%)		45	%		67	%	(33	%)
Canada		31	%		52	%	(40	%)		31	%		53	%	(42	%)
United States		74	%		97	%	(24	%)		67	%		99	%	(32	%)
Sales backlog at period end, $ million	$	57.5		$	43.8		31	%	$	57.5		$	43.8		31	%

⁽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 increase in the CPS segment’s second quarter revenue was due primarily to higher fabrication sales and increased equipment overhaul activity. Quarterly rental fleet utilization began to recover following the return of 6,500 horsepower of rental compression in late 2020 due to the bankruptcy of a United States customer, with a 20% increase in horsepower on rent at June 30, 2021 compared to March 31, 2021.   Ongoing cost management, increased overhead absorption as a result of higher fabrication activity and the receipt of COVID-19 relief funds contributed to a significant year over year improvement in second quarter EBITDA margin.   The fabrication sales backlog continued to recover during the second quarter of 2021, with a $9.8 million, or 21% increase from March 31, 2021 and a 55% increase from the low of $37.0 million recorded at September 30, 2020.  

Well Servicing (“WS”)

		Three month ended June 30								Six months ended June 30
		2021			2020		Change			2021			2020		Change
Revenue	$	19,426		$	21,606		(10	%)	$	42,154		$	55,272		(24	%)
EBITDA (1)	$	4,667		$	5,739		(19	%)	$	9,819		$	13,490		(27	%)
EBITDA (1) as a % of revenue		24	%		27	%	(11	%)		23	%		24	%	(4	%)
Service hours(2)		22,201			21,497		3	%		51,134			63,027		(19	%)
Canada		8,303			3,191		160	%		25,425			19,743		29	%
United States		3,449			1,430		141	%		6,060			7,001		(13	%)
Australia		10,449			16,876		(38	%)		19,649			36,283		(46	%)
Revenue per service hour(2), dollars	$	875		$	1,005		(13	%)	$	824		$	877		(6	%)
Canada		686			599		15	%		659			656		–
United States		664			803		(17	%)		674			746		(10	%)
Australia		1,095			1,099		–			1,084			1,023		6	%
Utilization(3)		21	%		15	%	40	%		27	%		28	%	(4	%)
Canada		16	%		6	%	167	%		25	%		19	%	32	%
United States		27	%		11	%	145	%		24	%		27	%	(11	%)
Australia		40	%		64	%	(38	%)		38	%		69	%	(45	%)
Rigs, average for period		83			83		–			83			83		–
Canada		57			57		–			57			57		–
United States		14			14		–			14			14		–
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.

WS segment revenue decreased in the second quarter of 2021 as compared to 2020 as a result of lower activity levels in Australia that was due in part to prolonged wet weather conditions that restricted field activity.   The increase in North American activity from the severely depressed levels experienced during the second quarter of 2020 was driven by the substantial improvement in oil prices over the past year and increased well abandonment activity in Canada.

Corporate

Total Energy continued to focus on the safe and efficient operation of its business and the preservation of its balance sheet strength and financial liquidity during the second quarter of 2021. Bank debt was reduced by $18.6 million, or 8%, during the quarter. The Company also resumed share buybacks under its normal course issuer bid with the purchase of 529,100 shares at an average price of $4.26 (including commissions). There were 44,600,000 common shares outstanding at June 30, 2021.

The Company exited the second quarter of 2021 with $127.2 million of positive working capital (including $29.2 million of cash) and $113 million of available credit under its $255 million of revolving bank credit facilities.   The weighted average interest rate on the Company’s outstanding debt at June 30, 2021 was 2.75%.

Outlook

While oil and natural gas prices remained relatively strong during the second quarter of 2021 and North American activity levels began to improve from the historic lows experienced following the COVID-19 outbreak and collapse in oil prices, producers generally remained disciplined with their capital expenditure budgets. Wet weather and the removal of two drilling rigs in Australia from service for recertification and upgrades negatively impacted second quarter Australian activity compared to 2020.

North American activity levels continue to modestly improve and in late-July the second Australian drilling rig returned to service. The CDS segment currently has 16 rigs operating in Canada, eight in the United States and four in Australia. Drilling activity is usually a leading indicator for industry activity levels and current activity levels in Total Energy’s other business segments have improved in concert with increased drilling activity. Current indications are that North American industry activity levels will continue to improve during the remainder of 2021 provided oil and natural gas prices remain relatively stable.

In response to increasing activity levels and longer lead times for certain equipment due to global supply chain issues, the Board of Directors of Total Energy has approved an increase to the Company’s 2021 capital expenditure budget to $26.7 million. Included in this $13.1 million increase is $8.0 million for upgrades to several drilling rigs and new drill pipe and $5.1 million of light duty vehicles for use in all business segments. The rig upgrades are in response to specific customer requests and include pressure upgrades and the addition of walking systems and bi-fuel capacity as Total Energy continues to collaborate with its customers to minimize the environmental impact of drilling operations and increase the capabilities of the Company’s drilling rig fleet. The light duty vehicle capital expenditure relates to 2022 fleet requirements for all business segments but a significant increase in production lead times dictates that such requirements be addressed at this time. Total Energy intends to finance its 2021 capital expenditure budget with cash on hand, proceeds from the disposal of older and underutilized equipment and, in respect of the light duty vehicles, $5.1 million of capital leases.

Director Appointment

Total Energy is pleased to announce the appointment of Jessica Kirstine to the Company’s Board of Directors. Ms. Kirstine currently serves as Vice-President of System Operations and Engineering, Liquid Pipelines for TC Energy. Based in Calgary, Ms. Kirstine is responsible for Liquid Pipelines Operation Control Centre, Pipe and Facility Integrity and overall engineering support of TC Energy’s liquid pipelines operating assets across North America. Prior to joining TC Energy in 2019, Ms. Kirstine spent 17 years in the Canadian upstream oil and gas industry in operations, engineering and exploration roles, serving in both technical and management capacities.

Ms. Kirstine has her Professional Engineering designation from the Association of Professional Engineers and Geoscientists of Alberta (APEGA) and earned her Chemical Engineering degree from the University of Saskatchewan in 2002.

Conference Call

At 9:00 a.m. (Mountain Time) on August 12, 2021 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 (800) 319-4610 or (416) 915-3239. 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 12, 2021 by dialing (855) 669-9658 (passcode 7340).

Selected Financial Information

Selected financial information relating to the three and six months ended June 30, 2021 and 2020 is enclosed to 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 the Company’s 2020 Annual report.

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

			June 30				December 31
				2021				2020
			(unaudited)				(audited)
Assets
Current assets:
Cash and cash equivalents			$	29,231			$	22,996
Accounts receivable				72,763				73,373
Inventory				92,786				95,586
Prepaid expenses and deposits				4,835				6,876
Income taxes receivable				1,226				1,287
Current portion of lease asset				462				566
				201,303				200,684
Property, plant and equipment				597,799				636,996
Income taxes receivable				7,070				7,070
Deferred income tax asset				792				57
Lease asset				598				719
Goodwill				4,053				4,053
			$	811,615			$	849,579
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities			$	56,297			$	46,410
Deferred revenue				11,057				6,365
Current portion of lease liabilities				4,172				6,417
Current portion of long-term debt				2,576				2,552
				74,102				61,744
Long-term debt				201,218				230,517
Lease liabilities				8,914				8,420
Deferred tax liability				35,122				37,911
Shareholders’ equity:
Share capital				280,829				284,077
Contributed surplus				5,356				4,966
Accumulated other comprehensive loss				(29,858	)			(18,736	)
Non-controlling interest				573				629
Retained earnings				235,359				240,051
				492,259				510,987
			$	811,615			$	849,579

Consolidated Statements of Comprehensive Loss
(in thousands of Canadian dollars except per share amounts)
(unaudited)

		Three months ended June 30						Six months ended June 30
			2021			2020			2021			2020
Revenue		$	84,876		$	70,770		$	178,066		$	205,038
Cost of services			63,092			52,483			134,180			153,166
Selling, general and administration			6,069			5,756			12,608			16,341
Other (income) expense			(1,114	)		536			(2,180	)		(7,392	)
Share-based compensation			189			264			390			669
Depreciation			20,729			48,892			42,576			68,886
Operating loss			(4,089	)		(37,161	)		(9,508	)		(26,632	)
Gain on sale of property, plant and equipment			3,076			1,155			3,365			1,535
Finance costs, net			(1,772	)		(2,518	)		(3,579	)		(5,957	)
Net loss before income taxes			(2,785	)		(38,524	)		(9,722	)		(31,054	)
Current income tax expense (recovery)			16			957			(455	)		2,293
Deferred income tax recovery			(665	)		(10,636	)		(3,524	)		(9,226	)
Total income tax recovery			(649	)		(9,679	)		(3,979	)		(6,933	)
Net loss		$	(2,136	)	$	(28,845	)	$	(5,743	)	$	(24,121	)
Net loss attributable to:
Shareholders of the Company		$	(2,108	)	$	(28,765	)	$	(5,687	)	$	(24,093	)
Non-controlling interest			(28	)		(80	)		(56	)		(28	)
Loss per share
Basic and diluted		$	(0.05	)	$	(0.64	)	$	(0.13	)	$	(0.53	)

Consolidated Statements of Comprehensive Loss
(unaudited)

		Three months ended June 30						Six months ended June 30
			2021			2020			2021			2020
Net loss for the period		$	(2,136	)	$	(28,845	)	$	(5,743	)	$	(24,121	)
Foreign currency translation			(5,820	)		(5	)		(11,122	)		4,842
Deferred tax effect			–			(305	)		–			(1	)
Total other comprehensive (loss) income for the period			(5,820	)		(310	)		(11,122	)		4,841
Total comprehensive loss		$	(7,956	)	$	(29,155	)	$	(16,865	)	$	(19,280	)
Total comprehensive loss attributable to:
Shareholders of the Company		$	(7,928	)	$	(29,075	)	$	(16,809	)	$	(19,252	)
Non-controlling interest			(28	)		(80	)		(56	)		(28	)

Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)

		Three months ended June 30						Six months ended June 30
			2021			2020			2021			2020
Cash provided by (used in):
Operations:
Net loss for the period		$	(2,136	)	$	(28,845	)	$	(5,743	)	$	(24,121	)
Add (deduct) items not affecting cash:
Depreciation			20,729			48,892			42,576			68,886
Share-based compensation			189			264			390			669
Gain on sale of property, plant and equipment			(3,076	)		(1,155	)		(3,365	)		(1,535	)
Finance costs			1,772			2,518			3,579			5,957
Unrealized (gain) loss on foreign currencies translation			(1,114	)		748			(2,180	)		(7,828	)
Current income tax expense (recovery)			16			957			(455	)		2,293
Deferred income tax recovery			(665	)		(10,636	)		(3,524	)		(9,226	)
Income taxes recovered			747			1,050			516			609
Cashflow			16,462			13,793			31,794			35,704
Changes in non-cash working capital items:
Accounts receivable			3,738			37,486			(159	)		43,099
Inventory			972			6,727			2,129			(672	)
Prepaid expenses and deposits			1,068			2,825			2,041			6,327
Accounts payable and accrued liabilities			7,123			(27,955	)		7,991			(38,192	)
Deferred revenue			2,259			3,286			4,692			6,239
Cash provided by operating activities			31,622			36,162			48,488			52,505
Investing:
Purchase of property, plant and equipment			(8,079	)		(7,944	)		(13,153	)		(10,190	)
Proceeds on disposal of property, plant and equipment			8,005			1,638			8,445			3,343
Changes in non-cash working capital items			79			(690	)		1,051			(1,998	)
Cash provided by (used in) investing activities			5			(6,996	)		(3,657	)		(8,845	)
Financing:
Advances on long-term debt			–			9,796			–			29,796
Repayment of long-term debt			(18,637	)		(42,647	)		(29,275	)		(58,342	)
Repayment of lease liabilities			(1,802	)		(2,205	)		(3,622	)		(4,264	)
Dividends to shareholders			–			–			–			(2,710	)
Repurchase of common shares			(1,924	)		–			(2,253	)		(427	)
Partnership distributions			–			(125	)		–			(125	)
Interest paid			(738	)		(2,834	)		(3,446	)		(6,364	)
Cash used in financing activities			(23,101	)		(38,015	)		(38,596	)		(42,436	)
Change in cash and cash equivalents			8,526			(8,849	)		6,235			1,224
Cash and cash equivalents, beginning of period			20,705			29,946			22,996			19,873
Cash and cash equivalents, end of period		$	29,231		$	21,097		$	29,231		$	21,097

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 labour 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 labour 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, 2021 (unaudited, in thousands of Canadian dollars)

	Contract			Rentals and			Compression			Well			Corporate(1)			Total
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services
Revenue	$	25,740		$	6,053		$	33,657		$	19,426		$	–		$	84,876
Cost of services		20,355			3,029			25,932			13,776			–			63,092
Selling, general and administration		949			1,276			1,180			1,061			1,603			6,069
Other income		–			–			–			–			(1,114	)		(1,114	)
Share-based compensation		–			–			–			–			189			189
Depreciation (2)		9,461			5,042			2,265			3,749			212			20,729
Operating income (loss)		(5,025	)		(3,294	)		4,280			840			(890	)		(4,089	)
Gain on sale of property, plant and equipment		272			1,576			1,137			78			13			3,076
Finance costs		(8	)		(30	)		(74	)		(5	)		(1,655	)		(1,772	)
Net income (loss) before income taxes		(4,761	)		(1,748	)		5,343			913			(2,532	)		(2,785	)
Goodwill		–			2,514			1,539			–			–			4,053
Total assets		313,553			186,423			212,647			95,469			3,523			811,615
Total liabilities		55,394			8,253			38,462			4,887			212,360			319,356
Capital expenditures		5,482			61			2,413			123			–			8,079

Three months ended June 30, 2021	Canada		United States		Australia		Other		Total
Revenue	$	42,548	$	22,894	$	19,434	$	–	$	84,876
Non-current assets (3)		395,471		142,563		64,416		–		602,450

As at and for the three months ended June 30, 2020 (unaudited, in thousands of Canadian dollars)

	Contract			Rentals and			Compression			Well			Corporate(1)			Total
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services
Revenue	$	14,170		$	4,782		$	30,212		$	21,606		$	–		$	70,770
Cost of services		11,674			3,159			22,910			14,740			–			52,483
Selling, general and administration		1,297			1,141			1,413			1,121			784			5,756
Other expense		–			–			–			–			536			536
Share-based compensation		–			–			–			–			264			264
Depreciation (2)		36,689			5,882			2,378			3,760			183			48,892
Operating income (loss)		(35,490	)		(5,400	)		3,511			1,985			(1,767	)		(37,161	)
Gain (loss) on sale of property, plant and equipment		665			383			(3	)		(6	)		116			1,155
Finance costs		(36	)		(19	)		(99	)		(9	)		(2,355	)		(2,518	)
Net income (loss) before income taxes		(34,861	)		(5,036	)		3,409			1,970			(4,006	)		(38,524	)
Goodwill		–			2,514			1,539			–			–			4,053
Total assets		334,273			215,558			227,113			107,687			14,309			898,940
Total liabilities		59,669			15,474			35,754			5,210			258,854			374,961
Capital expenditures		1,158			319			6,023			436			8			7,944

Three months ended June 30, 2020	Canada		United States		Australia		Other		Total
Revenue	$	24,765	$	14,542	$	31,412	$	51	$	70,770
Non-current assets (3)		448,723		170,282		66,630		–		685,635

As at and for the six months ended June 30, 2021 (unaudited, in thousands of Canadian dollars)

	Contract			Rentals and			Compression			Well			Corporate(1)			Total
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services
Revenue	$	54,311		$	13,788		$	67,813		$	42,154		$	–		$	178,066
Cost of services		41,270			7,701			55,156			30,053			–			134,180
Selling, general and administration		2,345			2,528			2,624			2,329			2,782			12,608
Other income		–			–			–			–			(2,180	)		(2,180	)
Share-based compensation		–			–			–			–			390			390
Depreciation (2)		19,326			10,560			4,672			7,601			417			42,576
Operating income (loss)		(8,630	)		(7,001	)		5,361			2,171			(1,409	)		(9,508	)
Gain on sale of property, plant and equipment		280			1,731			1,224			47			83			3,365
Finance costs		(9	)		(46	)		(152	)		(11	)		(3,361	)		(3,579	)
Net income (loss) before income taxes		(8,359	)		(5,316	)		6,433			2,207			(4,687	)		(9,722	)
Goodwill		–			2,514			1,539			–			–			4,053
Total assets		313,553			186,423			212,647			95,469			3,523			811,615
Total liabilities		55,394			8,253			38,462			4,887			212,360			319,356
Capital expenditures		9,739			280			2,581			553			–			13,153

Six months ended June 30, 2021	Canada		United States		Australia		Other		Total
Revenue	$	102,293	$	41,203	$	34,568	$	2	$	178,066
Non-current assets (3)		395,471		142,563		64,416		–		602,450

As at and for the six months ended June 30, 2020 (unaudited, in thousands of Canadian dollars)

	Contract			Rentals and			Compression			Well			Corporate(1)			Total
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services
Revenue	$	57,195		$	21,615		$	70,956		$	55,272		$	–		$	205,038
Cost of services		44,131			13,776			56,321			38,938			–			153,166
Selling, general and administration		3,738			3,644			3,629			2,848			2,482			16,341
Other income		–			–			–			–			(7,392	)		(7,392	)
Share-based compensation		–			–			–			–			669			669
Depreciation(2)		44,525			12,033			4,671			7,290			367			68,886
Operating income (loss)		(35,199	)		(7,838	)		6,335			6,196			3,874			(26,632	)
Gain on sale of property, plant and equipment		756			536			110			4			129			1,535
Finance costs		(78	)		(42	)		(197	)		(18	)		(5,622	)		(5,957	)
Net income (loss) before income taxes		(34,521	)		(7,344	)		6,248			6,182			(1,619	)		(31,054	)
Goodwill		–			2,514			1,539			–			–			4,053
Total assets		334,273			215,558			227,113			107,687			14,309			898,940
Total liabilities		59,669			15,474			35,754			5,210			258,854			374,961
Capital expenditures		2,019			842			6,079			1,238			12			10,190

Six months ended June 30, 2020	Canada		United States		Australia		Other		Total
Revenue	$	96,205	$	47,161	$	61,619	$	53	$	205,038
Non-current assets (3)		448,723		170,282		66,630		–		685,635

⁽¹⁾  Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
⁽²⁾  Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2020 Financial Statements for further details.
⁽³⁾  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 before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income, 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.

(4)  Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 5 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 www.sedar.com) for a discussion of such risks and uncertainties.

The TSX has neither approved nor disapproved of the information contained herein.

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