Dalmac Energy Reports Year End 2019 Financial Results
28 Agosto 2019 - 7:00PM
John Babic, President and CEO of Dalmac Energy
Inc. (“Dalmac”) (TSX Venture “DAL”) is pleased to announce
fourth quarter and annual financial results for the fiscal year
ended April 30, 2019.
FINANCIAL HIGHLIGHTS |
|
|
|
|
(000’s Cdn Dollars, except per share data) |
Q4'19 |
|
Q4'18 |
|
YTD '19 |
|
YTD'18 |
|
|
|
|
|
|
Revenues |
4,245 |
|
5,278 |
|
17,785 |
|
20,202 |
|
Gross Margin % |
22 |
% |
26 |
% |
23 |
% |
28 |
% |
EBITDAS (loss) |
232 |
|
855 |
|
1,324 |
|
2,948 |
|
Earnings (loss) before income
tax |
(672 |
) |
(276 |
) |
(2,668 |
) |
(1,464 |
) |
Net earnings (loss) |
(672 |
) |
(276 |
) |
(2,668 |
) |
(1,142 |
) |
Earnings (loss) per share
- basic |
(0.02 |
) |
(0.01 |
) |
(0.09 |
) |
(0.04 |
) |
Earnings (loss) per share - diluted |
(0.02 |
) |
(0.01 |
) |
(0.09 |
) |
(0.04 |
) |
Business Highlights
- The months of September and October
were affected by a maintenance related shut down of US refineries
on the east coast which created extra demand on western pipeline
networks resulting in a system overload for oil and gas egress from
Alberta which in turn caused WCS oil prices to drop to $10/bbl in
November.
- Alberta’s oil production storage
inventory hit 35 million bbls which prompted the Alberta government
to introduce a temporary production curtailment of approximately
325,000 bbs/day effective January 1st 2019.
- By end January 2019 curtailment
measures showed results and the WCS spot price rebounded to over
$40/bbl and storage inventories were reduced to 30 million bbls.
Curtailment was reduced by 150,000 at the end of May 2019.
- The Alberta Government announced
plans for the procurement of 7000 additional rail cars by the end
of 2019 to supplement lack of pipeline access.
- E&P producers respond to a drop
in WCS pricing and egress constraints by cancelling or rescheduling
drilling and completion programs scheduled for the winter
season. Cap-ex budgets were also trimmed and, in some cases,
producing wells were shut in. Correspondingly, the
Corporation’s utilization levels were also affected.
- Dalmac responded with a new round
of cost cutting measures such as reducing staff positions and
streamlining inter branch operations.
- As a result of the rescheduling and
cancellation of scheduled drilling and completion programs, revenue
for the Q4’19 decreased 20% compared to the same time in the
previous year. YTD the decrease was 12%. As a result of
commencement of cost reduction activities initiated in January
2019, gross margin for the quarter decreased 4% on the quarter as
compared to 5% decrease on the YTD.
- The net loss for Q4’19 was $672K
and $2.7M for YE’19
OutlookThere has been some positive news for the
industry over the last few months:
- Construction on the Trans Mountain pipeline which was purchased
by the Federal Government began in July of 2019
- The LNG Canada project in Kitimat, B.C. was confirmed to
proceed
- The new Alberta government announced that oil production
curtailment which was announced late last year will be rescinded in
September 2019.
There is also some additional good pipeline new
from the US. The Plains All American Cactus II pipeline, which will
carry crude from the Permian basin to Corpus Christi, Texas is
scheduled to commence operation in mid-August 2019. Cactus II
has a name plate capacity of 670,000 barrels per day and this
additional capacity is expected relieve some of the egress
bottlenecks from the main oil hub corridor in Cushing, Oklahoma
and will thereby help bolster prices.
The unseasonably wet conditions over the course
of the summer have pushed back the start of several drilling and
completion projects into the fall. As a result of ongoing
discussions and commitments with customers, management confident in
its outlook for the fall and winter season. Dalmac is committed to
its solid customer base in West Central Alberta and is confident in
its seasoned leadership team ability to provide high quality
service to its customers.
Management is committed to prioritizing our
emphasis on streamlining and maximizing efficiencies of our
operations. The Corporation has already introduced measures to
reduce costs which are estimated in the neighborhood of $1.4M over
the course of a 12-month period. The Corporation has already
secured service commitments from many of our key customers on
various production, drilling and completion projects which are
scheduled to commence over the course of the year. With our fall
and winter log books filling up the Company is optimistic about its
prospects for improving utilization levels over the fall and winter
season
For more information contact:
John Babic - CEO - Dalmac EnergyTel: 780-988-8510 Email:
jbabic@dalmac.ca
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.
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