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Total Energy Services Inc. Announces Q3 2024 Results

CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and nine months ended September 30, 2024.

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

  Three months ended
September 30
  Nine months ended
September 30
    2024   2023 Change     2024   2023 Change
Revenue $ 241,940 $ 232,016 4 %   $ 659,960 $ 678,638 (3 %)
Operating income   27,308   23,691 15 %     63,950   61,112 5 %
EBITDA (1)   50,543   44,955 12 %     131,280   123,685 6 %
Cashflow   48,091   40,784 18 %     119,022   118,864  
Net income   19,706   19,237 2 %     50,623   49,455 2 %
Attributable to shareholders   19,731   19,231 3 %     50,685   49,472 2 %
                       
Per Share Data (Diluted)                      
EBITDA (1) $ 1.28 $ 1.10 16 %   $ 3.27 $ 3.00 9 %
Cashflow $ 1.22 $ 1.00 22 %   $ 2.97 $ 2.88 3 %
                       
Attributable to shareholders:                      
Net income $ 0.50 $ 0.47 6 %   $ 1.26 $ 1.20 5 %
                       
Common shares (000’s)(4)                      
Basic   38,802   40,149 (3 %)     39,385   40,555 (3 %)
Diluted   39,489   40,961 (4 %)     40,086   41,291 (3 %)
                       
                September 30   December 31  
Financial Position at               2024   2023 Change
Total Assets             $ 963,743 $ 861,658 12 %
Long-Term Debt and Lease Liabilities (excluding current portion) 104,997   100,834 4 %
Working Capital (2)               97,274   123,439 (21 %)
Net Debt (3)               7,723   nm  
Shareholders’ Equity               561,211   530,758 6 %
                       

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

nm – calculation not meaningful

Total Energy’s results for the three months ended September 30, 2024 represent record quarterly financial results. Substantial share repurchases over the past year amplified the results on a fully diluted per share basis.   Underpinning these record results were stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment that more than offset a year over year decline in drilling and completion activity in the United States.     

Contract Drilling Services (“CDS”)

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023   Change   2024     2023   Change
Revenue $ 86,634   $ 75,815   14 % $ 235,734   $ 212,633   11 %
EBITDA (1) $ 20,563   $ 21,670   (5 %) $ 57,414   $ 51,830   11 %
EBITDA (1) as a % of revenue   24 %   29 % (17 %)   24 %   24 %  
Operating days(2)   2,836     2,880   (2 %)   7,687     7,723    
Canada   1,861     2,009   (7 %)   4,954     5,023   (1 %)
United States   328     535   (39 %)   1,033     1,696   (39 %)
Australia   647     336   93 %   1,700     1,004   69 %
Revenue per operating day(2), dollars $ 30,548   $ 26,325   16 % $ 30,667   $ 27,532   11 %
Canada   25,026     24,522   2 %   26,137     25,668   2 %
United States   27,829     28,540   (2 %)   28,566     28,326   1 %
Australia   47,808     33,577   42 %   45,144     35,522   27 %
Utilization   29 %   33 % (12 %)   27 %   30 % (10 %)
Canada   27 %   28 % (4 %)   24 %   24 %  
United States   30 %   48 % (38 %)   31 %   53 % (42 %)
Australia   41 %   73 % (44 %)   46 %   74 % (38 %)
Rigs, average for period   105     94   12 %   103     94   10 %
Canada   76     77   (1 %)   77     77    
United States   12     12       12     12    
Australia   17     5   240 %   14     5   180 %

(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 standby days.

Canadian drilling activity during the third quarter of 2024 was relatively consistent with 2023 while United States activity continued to lag the prior year. Canadian operating days were negatively impacted when an AC double drilling rig was damaged in July during transit. The rig returned to service in mid-October following completion of repairs. In Australia, Saxon contributed $20.2 million of revenue during the third quarter of 2024. Included in 2023 third quarter segment EBITDA was a $4.1 million realized foreign exchange gain on settlement of intercompany notes. Excluding the effect of this foreign exchange gain, third quarter segment EBITDA increased 17% as compared to 2023 and the segment EBITDA margin increased from 23% to 24%. The substantial year over year increase in third quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.   

Rentals and Transportation Services (“RTS”)

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023   Change   2024     2023   Change
Revenue $ 19,437   $ 21,137   (8 %) $ 59,614   $ 65,362   (9 %)
EBITDA (1) $ 8,179   $ 7,263   13 % $ 23,958   $ 23,977    
EBITDA (1) as a % of revenue   42 %   34 % 24 %   40 %   37 % 8 %
Revenue per utilized piece of equipment, dollars $ 12,868   $ 12,825     $ 42,297   $ 42,473    
Pieces of rental equipment   7,960     7,659   4 %   7,960     7,659   4 %
Canada   7,040     6,767   4 %   7,040     6,767   4 %
United States   920     892   3 %   920     892   3 %
Rental equipment utilization   19 %   19 %     18 %   18 %  
Canada   18 %   18 %     16 %   16 %  
United States   29 %   27 % 7 %   33 %   36 % (8 %)
Heavy trucks   67     69   (3 %)   67     69   (3 %)
Canada   46     48   (4 %)   46     48   (4 %)
United States   21     21       21     21    

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.

Third quarter revenue in the RTS segment decreased as compared to 2023 due to lower United States revenue. While United States equipment utilization increased slightly, lower pricing due to competitive market conditions and the mix of equipment operating contributed to a year over year decline in third quarter revenue. Despite the decline in segment revenue, effective cost management resulted in higher third quarter EBITDA and EBITDA margins as compared to 2023.

Compression and Process Services (“CPS”)

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023   Change   2024     2023   Change
Revenue $ 110,567   $ 110,959     $ 297,547   $ 322,207   (8 %)
EBITDA (1) $ 19,336   $ 14,404   34 % $ 47,795   $ 39,402   21 %
EBITDA (1) as a % of revenue   17 %   13 % 31 %   16 %   12 % 33 %
Horsepower of equipment on rent at period end   52,881     36,616   44 %   52,881     36,616   44 %
Canada   16,661     15,226   9 %   16,661     15,226   9 %
United States   36,220     21,390   69 %   36,220     21,390   69 %
Rental equipment utilization during the period (HP)(2)   77 %   69 % 12 %   77 %   75 % 3 %
Canada   72 %   73 % (1 %)   70 %   77 % (9 %)
United States   79 %   67 % 18 %   80 %   74 % 8 %
Sales backlog at period end, $ million $ 189.0   $ 152.9   24 % $ 189.0   $ 152.9   24 %

(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.

CPS segment revenue for the third quarter of 2024 was consistent with 2023 and decreased during the first nine months of 2024 as compared to the same period in 2023.   Improved fabrication efficiencies and a significant increase in compression horsepower on rent contributed to the year over year increase in segment EBITDA and EBITDA margin.   The quarter end fabrication sales backlog increased by $36.1 million compared to the $152.9 million backlog at September 30, 2023 and decreased sequentially by $15.6 million from the $204.6 million sales backlog at June 30, 2024.

Well Servicing (“WS”)

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023   Change   2024     2023   Change
Revenue $ 25,302   $ 24,105   5 % $ 67,065   $ 78,436   (14 %)
EBITDA (1) $ 4,943   $ 5,044   (2 %) $ 11,344   $ 16,177   (30 %)
EBITDA (1) as a % of revenue   20 %   21 % (5 %)   17 %   21 % (19 %)
Service hours(2)   24,680     26,044   (5 %)   67,307     81,920   (18 %)
Canada   13,412     12,140   10 %   37,229     38,988   (5 %)
United States   2,613     6,370   (59 %)   9,243     18,781   (51 %)
Australia   8,655     7,534   15 %   20,835     24,151   (14 %)
Revenue per service hour(2), dollars $ 1,025   $ 926   11 % $ 996   $ 957   4 %
Canada   958     923   4 %   962     955   1 %
United States   861     944   (9 %)   883     980   (10 %)
Australia   1,179     913   29 %   1,109     944   17 %
Utilization(3)   27 %   30 % (8 %)   25 %   32 % (20 %)
Canada   27 %   24 % 13 %   24 %   26 % (8 %)
United States   24 %   63 % (62 %)   31 %   63 % (51 %)
Australia   33 %   28 % 18 %   26 %   31 % (16 %)
Rigs, average for period   79     79       79     79    
Canada   55     56   (2 %)   56     56    
United States   12     11   9 %   11     11    
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.

Third quarter WS segment revenue increased in 2024 as compared to 2023 due to increased activity in Canada and Australia that offset a substantial decline in United States activity. Segment EBITDA was modestly lower as higher operating income in Canada and Australia was more than offset by the decline in United States operating income. Activity levels in the United States were significantly lower due in part to significant customer consolidation. Increased pricing and utilization in Australia was due to the deployment of upgraded rigs.

Corporate

During the third quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. Including the acquisition of Saxon, $112.4 million of capital expenditures have been funded to September 30, 2024.

Total Energy exited the third quarter of 2024 with $97.3 million of positive working capital, including $61.9 million of cash, and $80 million of available credit under its $175 million of revolving bank credit facilities. Included in current liabilities is a $41.5 million mortgage loan that matures in April of 2025. Total Energy expects to repay this debt at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at September 30, 2024 was 5.26%.

Outlook

Despite continued global economic uncertainty and commodity price volatility, industry conditions remain relatively stable. Contributing to this stability is continued investment to increase North American LNG export capacity, a strong Asian LNG market and the recent completion of the Trans Mountain pipeline expansion in Canada. Total Energy’s efforts to grow its Australian business continued in the third quarter when two drilling rigs and a service rig commenced operations under long term contracts.

Total Energy continues to see opportunities to upgrade and reactivate equipment as well as targeted opportunities to build new equipment. In that regard, the Board of Directors has approved a $19.8 million increase to the Company’s 2024 capital expenditure budget to $86.1 million. $13.1 million of this increase is directed towards growth opportunities, including the upgrade of two Saxon drilling rigs and one service rig in Australia that will be deployed in the first quarter of 2025 under long term contracts. Also included in growth capital is $1.0 million of new rental equipment for the RTS segment that will be deployed during the fourth quarter of 2024. The remaining $6.7 million includes the purchase of new drill pipe and an operating facility currently leased by the RTS segment in the United States as well as drilling rig recertifications. Including this increase, $14.2 million of capital commitments carried forward from 2023 and the acquisition of Saxon, projected 2024 capital expenditures total $147.7 million, of which $112.4 million has been funded to September 30, 2024. The Company expects to fund the remaining $35.3 million of capital commitments with cash on hand and cashflow, with approximately $10.0 million expected to be funded in 2025.

Conference Call

At 9:00 a.m. (Mountain Time) on November 7, 2024 Total Energy will conduct a conference call and webcast to discuss its third 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 (844) 763-8274 or (647) 484-8814. 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 December 7, 2024 by dialing (855) 669-9658 (passcode 1362549).

Selected Financial Information

Selected financial information relating to the three and nine months ended September 30, 2024 and 2023 is included in 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 in the Company’s 2023 Annual Report.

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

    September 30   December 31
    2024   2023
    (unaudited)   (audited)
Assets        
Current assets:        
Cash and cash equivalents $ 61,879   $ 47,935  
Accounts receivable   147,293     137,604  
Inventory   116,359     98,179  
Prepaid expenses and deposits   16,763     16,735  
    342,294     300,453  
         
Property, plant and equipment   617,129     557,152  
Deferred income tax asset   267      
Goodwill   4,053     4,053  
  $ 963,743   $ 861,658  
         
Liabilities & Shareholders’ Equity        
Current liabilities:        
Accounts payable and accrued liabilities $ 132,910   $ 116,794  
Deferred revenue   53,477     39,321  
Contingent consideration on business acquisition   2,700      
Income taxes payable   4,489     9,771  
Dividends payable   3,453     3,198  
Current portion of lease liabilities   6,528     5,880  
Current portion of long-term debt   41,463     2,050  
    245,020     177,014  
         
Long-term debt   95,000     90,947  
         
Lease liabilities   9,997     9,887  
         
Deferred income tax liability   52,515     53,052  
         
Shareholders’ equity:        
Share capital   240,563     251,283  
Contributed surplus   5,273     4,805  
Accumulated other comprehensive loss   (18,235 )   (25,506 )
Non-controlling interest   259     521  
Retained earnings   333,351     299,655  
    561,211     530,758  
         
  $ 963,743   $ 861,658  
             

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

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023     2024     2023  
                 
Revenue $ 241,940   $ 232,016   $ 659,960   $ 678,638  
                 
Cost of services   178,530     175,235     491,092     522,270  
Selling, general and administration   13,337     12,027     37,512     33,586  
Other expense (income)   (844 )   238     (720 )   (208 )
Share-based compensation   518     701     1,940     1,457  
Depreciation   23,091     20,124     66,186     60,421  
Operating income   27,308     23,691     63,950     61,112  
                 
Gain on sale of property, plant and equipment   144     1,140     1,144     2,152  
Finance costs, net   (2,330 )   (1,691 )   (6,318 )   (5,190 )
Net income before income taxes   25,122     23,140     58,776     58,074  
                 
Current income tax (recovery) expense   2,072     (231 )   7,090     140  
Deferred income tax expense   3,344     4,134     1,063     8,479  
Total income tax expense   5,416     3,903     8,153     8,619  
                 
Net income $ 19,706   $ 19,237   $ 50,623   $ 49,455  
                 
Net income (loss) attributable to:                
Shareholders of the Company $ 19,731   $ 19,231   $ 50,685   $ 49,472  
Non-controlling interest   (25 )   6     (62 )   (17 )
                 
Income per share                
Basic $ 0.51   $ 0.48   $ 1.29   $ 1.22  
Diluted $ 0.50   $ 0.47   $ 1.26   $ 1.20  
                 

Consolidated Statements of Comprehensive Income

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023     2024     2023  
                 
Net income $ 19,706   $ 19,237   $ 50,623   $ 49,455  
                 
Foreign currency translation   (31 )   (1,734 )   7,271     (7,034 )
                 
Total other comprehensive income (loss) for the period   (31 )   (1,734 )   7,271     (7,034 )
                 
Total comprehensive income $ 19,675   $ 17,503   $ 57,894   $ 42,421  
                 
Total comprehensive income (loss) attributable to:                
Shareholders of the Company $ 19,700   $ 17,497   $ 57,956   $ 42,438  
Non-controlling interest   (25 )   6     (62 )   (17 )
                         

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

    Three months ended
September 30
  Nine months ended
September 30
    2024     2023     2024     2023  
                 
Cash provided by (used in):                
                 
Operations:                
Net income for the period $ 19,706   $ 19,237   $ 50,623   $ 49,455  
Add (deduct) items not affecting cash:                
Depreciation   23,091     20,124     66,186     60,421  
Share-based compensation   518     701     1,940     1,457  
Gain on sale of property, plant and equipment   (144 )   (1,140 )   (1,144 )   (2,152 )
Finance costs, net   2,330     1,691     6,318     5,190  
Foreign currency translation   (999 )   (3,934 )   (336 )   (4,284 )
Current income tax (recovery) expense   2,072     (231 )   7,090     140  
Deferred income tax expense   3,344     4,134     1,063     8,479  
Income taxes paid   (1,827 )   202     (12,718 )   158  
Cashflow   48,091     40,784     119,022     118,864  
Changes in non-cash working capital items:                
Accounts receivable   (1,109 )   (13,516 )   (9,689 )   (8,396 )
Inventory   3,527     10,194     (18,180 )   (9,850 )
Prepaid expenses and deposits   (2,637 )   (5,353 )   (28 )   (5,207 )
Accounts payable and accrued liabilities   9,029     (8,066 )   21,896     10,480  
Deferred revenue   3,452     (2,104 )   14,156     (10,309 )
Cash provided by operating activities   60,353     21,939     127,177     95,582  
Investing:                
Purchase of property, plant and equipment   (14,700 )   (17,177 )   (65,038 )   (59,631 )
Cash paid on acquisition           (47,350 )    
Proceeds on disposal of property, plant and equipment   156     4,906     1,705     6,410  
Changes in non-cash working capital items   (441 )   (12 )   3,260     2,492  
Cash used in investing activities   (14,985 )   (12,283 )   (107,423 )   (50,729 )
Financing:                
Advances of long-term debt   5,000         65,000      
Repayment of long-term debt   (513 )   (498 )   (21,534 )   (16,491 )
Repayment of lease liabilities   (1,742 )   (1,558 )   (5,134 )   (4,714 )
Dividends to shareholders   (3,496 )   (3,212 )   (10,290 )   (8,944 )
Repurchase of common shares   (5,183 )   (2,298 )   (17,853 )   (13,587 )
Shares issued on exercise of stock options       42     64     42  
Partnership distributions           (200 )    
Interest paid   (2,319 )   (2,113 )   (15,863 )   (5,335 )
                 
Cash used in financing activities   (8,253 )   (9,637 )   (5,810 )   (49,029 )
                 
Change in cash and cash equivalents   37,115     19     13,944     (4,176 )
                 
Cash and cash equivalents, beginning of period   24,764     29,866     47,935     34,061  
                 
Cash and cash equivalents, end of period $ 61,879   $ 29,885   $ 61,879   $ 29,885  
                 

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 labor 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 labor 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 September 30, 2024 (unaudited, in thousands of Canadian dollars)

    Contract   Rentals and   Compression   Well   Corporate   Total
    Drilling   Transportation   and Process   Servicing   (1)      
    Services   Services   Services            
                         
Revenue $ 86,634   $ 19,437   $ 110,567   $ 25,302   $   $ 241,940  
                         
Cost of services   63,727     9,165     86,723     18,915         178,530  
Selling, general and administration   2,358     2,144     4,587     1,444     2,804     13,337  
Other income                   (844 )   (844 )
Share-based compensation                   518     518  
Depreciation   12,287     5,145     2,788     2,446     425     23,091  
Operating income (loss)   8,262     2,983     16,469     2,497     (2,903 )   27,308  
                         
Gain (loss) on sale of property, plant and equipment   14     51     79             144  
Finance costs, net   (17 )   (43 )   (109 )   (19 )   (2,142 )   (2,330 )
                         
Net income (loss) before income taxes   8,259     2,991     16,439     2,478     (5,045 )   25,122  
                         
Goodwill       2,514     1,539             4,053  
Total assets   434,030     163,853     284,919     76,899     4,042     963,743  
Total liabilities   84,042     26,558     111,634     6,473     173,825     402,532  
Capital expenditures   9,184     2,269     1,076     2,171         14,700  
    Canada   United States   Australia   International   Total
                     
Revenue $ 117,704 $ 82,514 $ 41,722 $ $ 241,940
Non-current assets (2)   364,318   131,534   125,330     621,182
                     

As at and for the three months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)

    Contract   Rentals and   Compression   Well   Corporate   Total
    Drilling   Transportation   and Process   Servicing   (1)      
    Services   Services   Services            
                         
Revenue $ 75,815   $ 21,137   $ 110,959   $ 24,105   $   $ 232,016  
                         
Cost of services   51,265     11,828     94,122     18,020         175,235  
Selling, general and administration   2,581     2,240     3,327     1,208     2,671     12,027  
Other (income) expense   308     7     (131 )       54     238  
Share-based compensation                   701     701  
Depreciation   9,580     4,903     2,585     2,802     254     20,124  
Operating income (loss)   12,081     2,159     11,056     2,075     (3,680 )   23,691  
                         
Gain on sale of property, plant and equipment   9     201     763     167         1,140  
Finance costs, net   (14 )   (28 )   (121 )   (18 )   (1,510 )   (1,691 )
                         
Net income (loss) before income taxes   12,076     2,332     11,698     2,224     (5,190 )   23,140  
                         
Goodwill       2,514     1,539             4,053  
Total assets   367,553     176,330     275,886     74,376     180     894,325  
Total liabilities   72,824     28,851     110,391     6,980     132,751     351,797  
Capital expenditures   9,094     1,643     4,268     1,937     235     17,177  
    Canada   United States   Australia   International   Total
                     
Revenue $ 111,945 $ 99,790 $ 20,281 $ $ 232,016
Non-current assets (2)   393,168   129,263   46,240     568,671

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

As at and for the nine months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)

As at and for the nine months ended   Contract   Rentals and   Compression   Well   Corporate   Total
September 30, 2024   Drilling   Transportation   and Process   Servicing   (1)      
    Services   Services   Services            
                         
Revenue $ 235,734   $ 59,614   $ 297,547   $ 67,065   $   $ 659,960  
                         
Cost of services   171,011     29,933     238,453     51,695         491,092  
Selling, general and administration   7,424     6,567     11,508     4,002     8,011     37,512  
Other expense                   (720 )   (720 )
Share-based compensation                   1,940     1,940  
Depreciation   34,669     15,228     7,999     7,269     1,021     66,186  
Operating income (loss)   22,630     7,886     39,587     4,099     (10,252 )   63,950  
                         
Gain (loss) on sale of property, plant and equipment   115     844     209     (24 )       1,144  
Finance costs, net   (55 )   (130 )   (321 )   (64 )   (5,748 )   (6,318 )
                         
Net income (loss) before income taxes   22,690     8,600     39,475     4,011     (16,000 )   58,776  
                         
Goodwill       2,514     1,539             4,053  
Total assets   434,030     163,853     284,919     76,899     4,042     963,743  
Total liabilities   84,042     26,558     111,634     6,473     173,825     402,532  
Capital expenditures   30,762     7,442     15,263     11,571         65,038  
    Canada   United States   Australia   International   Total
                     
Revenue $ 294,720 $ 260,102 $ 102,184 $ 2,954 $ 659,960
Non-current assets (2)   364,318   131,534   125,330     621,182
                     

As at and for the nine months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)

As at and for the nine months ended   Contract   Rentals and   Compression   Well   Corporate   Total
September 30, 2023   Drilling   Transportation   and Process   Servicing   (1)      
    Services   Services   Services            
                         
Revenue $ 212,633   $ 65,362   $ 322,207   $ 78,436   $   $ 678,638  
                         
Cost of services   153,466     35,725     273,607     59,472         522,270  
Selling, general and administration   7,552     6,374     10,122     3,124     6,414     33,586  
Other (income) expense   20         (88 )       (140 )   (208 )
Share-based compensation                   1,457     1,457  
Depreciation   28,107     14,620     7,822     9,091     781     60,421  
Operating income (loss)   23,488     8,643     30,744     6,749     (8,512 )   61,112  
                         
Gain on sale of property, plant and equipment   235     714     836     337     30     2,152  
Finance costs, net   (44 )   (63 )   (353 )   (51 )   (4,679 )   (5,190 )
                         
Net income (loss) before income taxes   23,679     9,294     31,227     7,035     (13,161 )   58,074  
                         
Goodwill       2,514     1,539             4,053  
Total assets   367,553     176,330     275,886     74,376     180     894,325  
Total liabilities   72,824     28,851     110,391     6,980     132,751     351,797  
Capital expenditures   40,528     5,777     6,783     6,308     235     59,631  
    Canada   United States   Australia   International   Total
                     
Revenue $ 303,329 $ 303,617 $ 71,692 $ $ 678,638
Non-current assets (2)   393,168   129,263   46,240     568,671
                     

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) 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 (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), 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. Management believes this measure provides a useful indication of the Company’s liquidity.

(4) Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 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 http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.

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


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