DALMAC ENERGY INC. TSX Venture: "DAL"
EDMONTON, March 30, 2016 /CNW/ - John Babic, President and CEO of Dalmac Energy
Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce
second quarter results for the period ended January 31, 2016.
FINANCIAL
HIGHLIGHTS
|
|
|
Change
%
|
|
|
Change
%
|
(000's Cdn Dollars,
except per share data)
|
Q3'16
|
Q3'15
|
YTD '16
|
YTD'15
|
|
|
|
|
|
|
|
Revenues
|
6,096
|
9,545
|
(36)%
|
17,146
|
25,355
|
(32)%
|
Gross
Profit
|
1,440
|
2,311
|
(38)%
|
4,035
|
6,479
|
(38)%
|
Gross Profit Margin
%
|
24%
|
24%
|
(1)%
|
24%
|
26%
|
(2)%
|
EBITDAS
(loss)
|
606
|
1,190
|
(49)%
|
1,513
|
3,200
|
(53)%
|
Net earnings
(loss)
|
(297)
|
(120)
|
(147)%
|
(1,133)
|
(267)
|
(337)%
|
|
Earnings (loss) per
share - basic
|
(0.01)
|
(0.01)
|
(146)%
|
(0.05)
|
(0.01)
|
(324)%
|
|
Earnings (loss) per
share - diluted
|
(0.01)
|
(0.01)
|
(146)%
|
(0.05)
|
(0.01)
|
(323)%
|
Q3 is traditionally one of Dalmac's busiest quarters, however,
during Q3'16 various extraordinary factors adversely impacted the
earnings recorded for this period. The spot price of WTI
crude oil has dropped from $35/bbl in
December 2015 to about $26/bbl in January
2016. This has placed further pressure on E&P companies
to cut capital expenditures, which in turn resulted in the
cancellation and or delay of various drilling and completion
projects. In addition to dropping oil prices this year's unusually
warm winter brought about early spring break up conditions whose
effects were even evident in January. These developments placed
further downward pressure on activity levels in the oil and gas
services sector. Dalmac's quarterly revenues were down 36%
compared to the same period last year and the YTD revenues were
down 32%. The quarterly net loss was $(297)K and the YTD net loss was $(1.3)M. Despite the drop in revenues, the gross
margin remained at 24% for both the quarter and YTD largely due to
improved cost controls management. Subsequent to the close of
Q3'16, Dalmac initiated further reductions to operation costs which
will become evident in Q4'16. These reductions are estimated
to bring further cost savings of $100K/month when fully implemented
Outlook
With crude oil prices being in severe decline
over the past 18 months, customer pricing and activity levels for
fluid transfers and well stimulation services has been negatively
affected. There still remains a fair amount of uncertainty as to
the magnitude and timing of when oil and gas prices will recover.
In responding to this new reality, Dalmac has taken further steps
to reduce our operating expenses by approximately $1.0M on an annual run basis. It is expected that
at some point the reduced drilling and completion activity will
correct the oil supply resulting in a demand imbalance which will
eventually lead to higher oil prices. While a meaningful recovery
of drilling and completions may not happen until at least the
second half of 2016, we are confident in the belief that the longer
the recovery takes, the more acute the drilling response will
be.
With our great customer base and our many talented and dedicated
people we are confident of weathering this recent economic downturn
with the prospects of coming out stronger than before. During these
uncertain times it is our primary focus to maintain a disciplined
approach towards improving our balance sheet while keeping a close
eye on our debt levels. In summary, Dalmac is leaner than ever
before and we are actively engaged in the processes of negotiating
fair rates with our key customers who are in the process of
commencing fairly extensive drilling and completion programs in the
Duvernay basin. Dalmac is
committed to delivering on revenue and growth opportunities in all
our areas of operation and we are confident in our ability to
generate value for all our stakeholders.
Statements throughout this report that are not historical
facts may be considered 'forward looking statements'. Such
statements are based on current expectations that involve risks and
uncertainties, which could cause actual results to differ from
those anticipated. Important factors that can cause
anticipated outcomes to differ materially from actual outcomes
include the impact of general economic conditions, industry
conditions, competition from other industry participants,
volatility of petroleum prices, the ability to attract and retain
qualified personnel, changes in laws or regulation, currency
fluctuations, continued ability to access capital from available
facilities and environmental risks. References to "Dalmac',
the "Corporation", "Company", "us", "we", and "our" mean Dalamc
Energy Inc. and its subsidiary Dalmac Oilfield Services Inc.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release. We seek safe
harbor.
SOURCE Dalmac Energy Inc.