Briefcase

Login Portal

+1.877.473.2008 | [email protected]

Tuesday, February 29, 2000 CALGARY, ALBERTA-- /T/ Financial Review --------------------------------------------------------------------- ($ millions, except per share amounts) Quarter ended Year ended Dec. 31, Dec. 31, 1999 1998 1999 1998 --------------------------------------------------------------------- Revenue $ 22.1 $ 11.4 $ 61.8 $ 39.5 Earnings before interest, income taxes, depreciation & amortization (EBITDA) 4.9 2.1 12.9 6.4 Net income 2.2 0.7 4.8 1.8 Net income per share (basic) 0.14 0.05 0.35 0.15 (fully diluted) 0.14 0.05 0.34 0.15 Funds from operations 4.3 2.1 11.4 6.3 Funds from operations per share (basic) 0.29 0.16 0.83 0.36 (fully diluted) 0.27 0.15 0.78 0.50 --------------------------------------------------------------------- /T/ Trican Well Service Ltd. is pleased to announce a second consecutive quarter of record results. The fourth quarter of 1999 produced the highest revenue, cash flow and net income in the Company's history. Revenue increased 94% for the 1999 fourth quarter, and increased 57% for the year ended December 31st compared to the same periods in 1998. Net income for the fourth quarter totaled $2.2 million, a significant increase of 234% over 1998 fourth quarter net income of $0.7 million. Net income for the year totaled $4.9 million, which represents an increase of 165% over the year ended December 31, 1998. These increases can largely be attributed to increases in equipment utilization and revenue per job. The Company has experienced increases in the number of jobs completed for the fourth quarter and year of 71% and 43% compared to the same periods in 1998. All service lines experienced increases in number of jobs completed for the fourth quarter and year. Pumping services, in particular, experienced the strongest rebound in the number of jobs performed during the fourth quarter of 1999. Higher oil and gas prices have significantly increased the demand for services in all service lines and resulted in increases in equipment utilization for Trican this quarter and year. Revenue per job increased 13% for the 1999 fourth quarter and 10% for the year compared to the same periods in 1998. These increases are mainly attributed to the evolution of the sales mix towards the higher average revenue per job services of fracturing, coiled tubing and nitrogen services. The Company has experienced some measure of price recovery in the fourth quarter reflecting the higher demand for services in the market. While the price recovery was not significant during the fourth quarter, this trend is expected to continue in 2000 as demand for services remains high. Trican's net working capital position was $11.6 million as at December 31, 1999, an increase of $8.4 million over the position at December 31, 1998. The Company's net working capital position has substantially strengthened during 1999 due to the increase in activity and provides a solid financial base for the higher levels of activity generally expected in 2000. OPERATIONAL REVIEW The equipment expansion over the past three years has transformed Trican from a regional supplier of pumping services to a full service provider offering acidizing, cementing, coiled tubing, fracturing, jet pumping and nitrogen services across the Western Canadian Sedimentary basin. This equipment expansion has continued during the second half 1999 with the construction of 3 cement pumpers, 1 coiled tubing unit, 2 nitrogen pumpers and an additional set of fracturing equipment being completed or near completion at the end of 1999. Trican's ability to meet the significant increases in activity would not be possible without the hard work of its existing staff and the ability to attract qualified well service personnel. The number of employees at the end of 1999 was 52% higher than at the end of 1998. The hard work of all staff and the addition of the new employees has provided Trican with the qualified personnel necessary to meet the demands of increased activity. The acquisition of Northline Energy Services Inc. in January 2000 broadens the Company's array of coiled tubing services offered to its customers. Northline currently operates 9 shallow and medium depth coiled tubing units. The experienced management and employees of Northline are a welcome addition to the Trican team. The Northline acquisition is a good fit with Trican and is expected to have a positive impact on 2000 earnings. OUTLOOK Industry watchers are currently forecasting between 14,000 to 17,000 wells being drilled during the year 2000. These forecasts represent a 30% and 60% increase over the 1999 well count and at the higher end of the range, would be near record levels of activity for the industry. With the substantial investment undertaken in the second half of 1999, and the acquisition of Northline, Trican is well positioned to participate in the expected increase in activity. Trican is a well service company focused on serving the oil and gas industry in western Canada. Trican provides a comprehensive array of specialized products, equipment, services and technology for use in drilling, completion, stimulation and reworking of oil and gas wells. Through its bases in Red Deer, Lloydminster, Provost, Kindersley, Brooks, Whitecourt, Grande Prairie, and Edmonton Trican provides coiled tubing, fracturing, stimulation, cementing and related services to the oil and gas industry. /T/ Consolidated Statements of Operations and Retained Earnings (000's), except per share amounts, (unaudited) Three months ended Year ended Dec. 31, Dec. 31, 1999 1998 1999 1998 -------------------------------------- Revenue $ 22,079 $ 11,388 $ 61,750 $ 39,451 --------------------------------------------------------------------- Expenses Materials & operating 16,446 8,930 46,866 31,492 General & administrative 691 399 1,982 1,567 Interest expense 99 100 461 315 Depreciation & amortization 1,224 812 4,326 2,842 --------------------------------------------------------------------- 18,460 10,241 53,635 36,217 --------------------------------------------------------------------- Income before income taxes 3,619 1,147 8,115 3,233 Provision for income taxes 1,426 491 3,265 1,400 --------------------------------------------------------------------- Net income 2,193 656 4,850 1,833 Retained earnings, beginning of period 9,166 5,853 6,510 4,676 Retained earnings, end of period 11,360 6,510 11,360 6,510 --------------------------------------------------------------------- Basic earnings per share $ 0.14 $ 0.05 $ 0.35 $ 0.15 Fully diluted earnings per share $ 0.14 $ 0.05 $ 0.34 $ 0.15 --------------------------------------------------------------------- Consolidated Balance Sheets (000's), (unaudited) December 31, 1999 December 31, 1998 ------------------------------------ Assets Current assets $ 22,689 $ 10,466 Capital assets 47,148 36,249 Goodwill 1,498 1,693 ------------------------------------------------------------------ Total Assets $ 71,335 $ 48,408 ------------------------------------------------------------------ Liabilities & Shareholders' Equity Current liabilities $ 11,106 $ 7,262 Long-term debt 5,653 4,856 Deferred income taxes 4,586 2,648 Shareholders' equity 49,989 33,642 ------------------------------------------------------------------ Total Liabilities & Shareholders' Equity $ 71,335 $ 48,408 ------------------------------------------------------------------ Consolidated Cash Flow Statements (000's), (unaudited) Year Ended December 31, 1999 1998 ------------------------------------------------------------------ Cash provided by (used in): Operations Net income $ 4,850 $ 1,833 Changes to income not involving cash: Depreciation and amortization 4,326 2,842 Deferred income taxes 2,207 1,584 ------------------------------------------------------------------ Funds from operations 11,383 6,259 Net change in non-cash working capital from operations (1,343) (5,839) ------------------------------------------------------------------ 10,040 421 ------------------------------------------------------------------ Investments Purchase of capital assets (18,287) (11,377) Proceeds on disposal of capital assets 3,257 - Acquisition of subsidiary - (117) Net change in non-cash working capital from the purchase and disposal of capital assets (3,293) (3,369) ------------------------------------------------------------------ (18,323) (14,863) ------------------------------------------------------------------ Financing Net proceeds from issuance of share capital 11,230 8,478 Increase in long-term debt 763 4,566 Increase in long-term debt (2,340) 1,475 ------------------------------------------------------------------ 9,653 14,519 ------------------------------------------------------------------ Increase in cash position 1,369 77 Cash (bank indebtedness), beginning of period (508) (585) ------------------------------------------------------------------ Cash position, end of period $ 861 $ (508) ------------------------------------------------------------------ /T/ Please visit our website at www.trican.ca -30-