New West Energy Services Inc. Announces Third Quarter 2019 …

New West Energy Services Inc. Announces Third Quarter 2019 …


CALGARY , Nov. 29, 2019 /CNW/ – New West Energy Services Inc. (TSX Venture: NWE), an oil and gas and environmental services company focused on Western Canada , today announced its third quarter 2019 financial results.

New West Energy Services Inc. (CNW Group/New West Energy Services Inc.)

FINANCIAL HIGHLIGHTS

  • Revenue was $8,071,126 in the nine months ended September 30, 2019 compared to $14,827,975 in the same period last year, and $2,091,032 in the three months ended September 30, 2019 compared to $4,297,083 in the same period last year.  This significant reduction was mostly due to NWE ceasing its fluid transportation operations in Grande Prairie as a result of a significant decrease in revenue associated with this segment stemming from the continuing decline in completions activity in northwestern Alberta .

    As previously announced, on August 7, 2019 , NWE completed a restructuring of its operations whereby NWE’s then operating subsidiary, BearStone Environmental Solutions Inc., sold to NWE’s new operating subsidiary, Silverpoint Energy Services Inc., all of the equipment associated with its vacuum and water truck services business operated out of Medicine Hat. 

    As consideration for the equipment acquisition, Silverpoint assumed $2,733,911 of BearStone’s current secured indebtedness, subject to downward adjustment under certain conditions.  Silverpoint also borrowed an additional $315,000 to pay wages to the closing date of those BearStone employees who are being hired by Silverpoint.  The total indebtedness is for a term of five years.

    Silverpoint also secured a revolving operating line of credit of up to $1.5 million , based upon eligible accounts and other considerations, to be used for general corporate purposes.  Silverpoint may draw down on, and repay, the loan from time to time as needed.  The line of credit is also for a term of five years.

    Going forward, Silverpoint will be NWE’s sole operating subsidiary and will focus on vacuum and water truck services out of Medicine Hat , as well as environmental services out of the company’s headquarters in Calgary .

    Pursuant to an order of the Court of Queen’s Bench in Alberta , KPMG was appointed receiver over the remaining assets and undertakings of BearStone.  The Court also approved the sale by BearStone to Silverpoint of the above-mentioned equipment.

    Silverpoint also assumed approximately $430,000 of BearStone’s indebtedness towards other third-party lenders in exchange for Sliverpoint acquiring certain of BearStone’s drilling services equipment.

    As a result of the restructuring, NWE recorded a net loss from receivership of $819,565 .  This net loss incorporates the book value of equipment remaining with BearStone of $3,538,959 resulting in a loss on assets of $5,617,020 , offset by a gain on liabilities of $4,797,455 .

  • Gross margin was 30% in the nine months ended September 30, 2019 compared to 19% in the same period last year, and 33% in the three months ended September 30, 2019 compared to 26% in the same period last year.  The environmental and vacuum and water truck services operating in the drilling services sector realized an increase in gross margins offsetting a decrease in gross margin from the fluid transportation services operating in the completions and production sectors.
  • General and administrative expenses were $2,477,996 in the nine months ended September 30, 2019 compared to $2,777,314 in same period last year, and $653,431 in the three months ended September 30, 2019 compared to $901,188 in same period last year.  This decrease was mainly due to lower salaries and wages resulting from the closing of Grand Prairie operations.
  • Normalized EBITDAC was negative $33,754 in the nine months ended September 30, 2019 compared to $19,875 in the same period last year, and $46,780 in the three months ended September 30, 2019 compared to $224,655 in the same period last year.

For the nine months ended September 30, 

 For the nine months ended September 30,

2019

2018

Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total

Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total

$

$

$

$

$

$

$

$

Revenue

5,876,138

2,194,988

8,071,126

11,714,051

3,113,924

14,827,975

Direct costs

4,358,130

1,268,754

5,626,884

9,985,819

2,092,105

12,077,924

Gross margin

1,518,008

926,234

2,444,242

1,728,232

1,021,819

2,750,051

G & A expenses

1,267,409

986,183

224,404

2,477,996

1,454,070

1,059,417

263,827

2,777,314

Share base pmts

109,043

109,043

Finance charges

292,733

39,886

139,740

472,359

443,112

45,745

77,993

566,850

Depreciation

792,177

792,177

1,112,002

1,112,002

Disposal of assets

731,825

731,825

141,894

141,894

Loss on receivership

819,565

819,565

Net loss before tax

(2,385,701)

(99,835)

(364,144)

(2,849,680)

(1,422,846)

(83,343)

(450,863)

(1,957,052)

Total assets 

2,864,779

215,309

15,285

3,095,373

11,643,203

771,752

13,822

12,428,777

EBITDAC*

250,599

(59,949)

(224,404)

(33,754)

310,029

(37,598)

(252,556)

19,875

For the three months ended September 30,

For the three months ended September 30,

2019

2018

Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total

Vacuum Truck &
Fluid
Transportation
Services

Environmental
Services

Corporate

Total

$

$

$

$

$

$

$

$

Revenue

1,525,450

565,582

2,091,032

3,360,041

937,042

4,297,083

Direct costs

1,053,176

337,645

1,390,821

2,574,902

607,609

3,182,511

Gross margin

472,274

227,937

700,211

785,139

329,433

1,114,572

G & A expenses

268,151

307,917

77,363

653,431

458,112

341,640

101,436

901,188

Share base pmts

92,532

92,532

Finance charges

48,087

7,379

49,546

105,012

145,886

13,290

30,450

189,626

Depreciation

141,339

141,339

375,221

375,221

Disposal of assets

705,301

705,301

70,013

70,013

Loss on receivership

819,565

819,565

Net loss before tax

(1,510,169)

(87,359)

(126,909)

(1,724,437)

(264,093)

(25,497)

(224,418)

(514,008)

Total assets 

2,864,779

215,309

15,285

3,095,373

11,643,203

534,160

13,822

12,191,185

EBITDAC*

204,123

(79,980)

(77,363)

46,780

327,027

(12,207)

(90,165)

224,655

*

Normalized EBITDAC is earnings from continuing operations before interest, taxes, depreciation, amortization and share-based payments and is a measure of NWE’s operating profitability. The calculation is further adjusted to normalize EBITDAC by removing any non-reoccurring transactions that are not in the normal course of operations.

**

Copies of NWE’s financial statements,…

Transportation Services Jonathan Cartu

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