Leader Energy Services Ltd. ("Leader" or the "Company")(TSX
VENTURE:LEA) today announced financial results for the three and
nine-month periods ended September 30, 2011.
In the third quarter of 2011 revenues increased 60% to $10.0
million, as compared to $6.3 million reported in the third quarter
of 2010. This increase represents the highest third quarter revenue
reported from the Western Canadian Sedimentary Basin ("WCSB") in
the Company's ten-year history. On a year-to-date basis, revenues
improved 30% to $23.1 million as compared to $17.7 million reported
for the nine month period in 2010. Activity in the third quarter
recovered from a poor second quarter as a result of continued
demand for deeper, larger diameter coil applications and to a
certain extent, customers catching up on their drilling programs
delayed in the second quarter due to prolonged spring break-up and
wet weather conditions. For the nine month period, the 30% increase
in revenue reflects the increase in horizontal drilling activity
requiring deeper and larger diameter coil applications which
translates to higher day rates. The Company has been focusing its
service activities to meet the demands of the growing horizontal
drilling market and has increased its operational focus to cover a
larger area within the WCSB.
In the third quarter of 2011, the Company reported a profit from
continuing operations of $2.2 million ($0.11 per diluted share) as
compared to a profit from continuing operations of $0.7 million
($0.02 per diluted share) in the third quarter of 2010. The
Company's loss from continuing operations of $0.15 million for the
first nine months of 2011 includes a one-time loss on the
settlement of its convertible debenture in the amount of $1.4
million. Excluding this loss, the Company reported a profit from
continuing operations of $1.25 million, compared to a profit from
continuing operations of $0.9 million reported for the first nine
months of 2010. The Company reported EBITDA of $3.8 million during
the third quarter of 2011, an increase of 85% over the comparable
period of 2010.
The Company exited the quarter with five coil units plus one
reel trailer capable of 2 3/8" coil applications, seven nitrogen
pumpers and one fluid pumper. The Company anticipates placing its
new 2 3/8" deep coiled tubing unit and its second fluid pumper into
service during the fourth quarter of 2011. This equipment is in
very high demand and forms an integral component of longer-reach
coiled tubing applications.
Performance Summary
(000's)
------------------------------------------
Sept. 30, Sept. 30,
Quarter ended 2011 2010 $ Change % Change
------------------------------------------
Revenue - continuing operations $ 10,020 $ 6,252 $ 3,768 60%
Operating Expenses - continuing
operations 5,056 3,300 1,756 53%
------------------------------------------
4,964 2,952 2,012 68%
General and Administrative -
continuing operations 1,196 922 274 30%
Amortization - continuing
operations 643 563 80 14%
Finance cost 871 813 58 7%
Loss on settlement of convertible
debenture - - - n/a
Other (gains) losses 32 (59) 91 n/a
------------------------------------------
Profit - continuing operations 2,222 713 1,509 212%
------------------------------------------
Profit - discontinued operations - 11 (11) n/a
------------------------------------------
Net Profit $ 2,222 $ 724 $ 1,498 207%
------------------------------------------
------------------------------------------
Earnings per share - Basic $ 0.11 $ 0.05 $ 0.06 120%
Earnings per share - Diluted $ 0.11 $ 0.02 $ 0.09 450%
EBITDA(i) $ 3,803 $ 2,057 $ 1,746 85%
------------------------------------------
------------------------------------------
------------------------------------------
Sept. 30, Sept. 30,
9 months ended 2011 2010 $ Change % Change
------------------------------------------
Revenue - continuing operations $ 23,078 $17,703 $ 5,375 30%
Operating Expenses - continuing
operations 14,043 10,327 3,716 36%
------------------------------------------
9,035 7,376 1,659 22%
General and Administrative -
continuing operations 3,437 2,705 732 27%
Amortization - continuing
operations 1,867 1,640 227 14%
Finance cost 2,505 2,409 96 4%
Loss on settlement of convertible
debenture 1,401 - 1,401 n/a
Other (gains) losses (22) (244) 222 n/a
------------------------------------------
Profit (loss) - continuing
operations (153) 866 (1,019) n/a
------------------------------------------
Profit - discontinued operations 31 210 (179) n/a
------------------------------------------
Net Profit (Loss) $ (122) $ 1,076 $(1,198) n/a
------------------------------------------
------------------------------------------
Earnings (loss) per share - Basic $ (0.01) $ 0.08 $ (0.09) n/a
Earnings (loss) per share -
Diluted $ (0.01) $ 0.05 $ (0.06) n/a
EBITDA(i) $ 5,744 $ 4,726 $ 1,018 22%
------------------------------------------
------------------------------------------
(i) EBITDA means profit from continuing operations before
finance costs, loss on settlement of convertible debenture, taxes,
amortization, other (gains) losses, and share based compensation.
Readers are cautioned that EBITDA is generally regarded as an
indirect measure of operating cash flow, and, as such, the Company
believes it is a significant indicator of success of public
companies, and is particularly relevant to readers within the
investment community. EBITDA is not a measure that has a
standardized meaning prescribed by International Financial
Reporting Standards ("IFRS"), and accordingly may not be comparable
to similar measures used by other companies.
Outlook
The Western Canadian petroleum industry remains focused on
horizontal wells, multistage completions and extended-reach
drilling in oil and liquids-rich gas plays. Coiled tubing and
affiliated services are in high demand, and this is expected to
continue through 2012. By the end of this year, Leader will have
significantly increased its deep coiled tubing and fluid pumping
capacity, which should further enhance future financial
performance.
In the fourth quarter of 2011, Leader anticipates taking
delivery of its first dedicated 2 3/8" deep coiled tubing unit.
This will be the Company's sixth trailer-mounted coiled tubing
unit, a configuration that is required for larger-diameter,
extended reach applications. A second dedicated 2 3/8" unit is
scheduled for delivery during the first half of 2012. As additional
equipment is added to its fleet over the coming quarters, Leader is
strongly positioned to provide its services to an increasing client
base through the very active corridor from northeastern British
Columbia through north-central Alberta.
Leader is encouraged that demand for its services has remained
very strong in the face of recent global economic uncertainty.
Although commodity prices were especially volatile during the third
quarter, Leader's activity levels are expected to remain strong
through to spring breakup. The Company is focused on maximizing
field margins through the coming year. Additional expansion plans
will be determined in the fourth quarter of 2011. Each of the
Company's three service lines will benefit from this expansion.
Other
Additional information can be found on SEDAR at www.sedar.com or
the Company web site at www.leaderenergy.com. The number of common
shares issued and outstanding at the date hereof is 19,468,021
which does not include 1,709,500 unexercised stock options and
4,250,000 share purchase warrants.
Certain statements contained in this press release, including
statements which may contain words such as "could", "should",
"expect", "estimate", "believe", "likely", "will", or estimates of
business activity, and similar expressions and statements relating
to matters that are not historical facts, are forward-looking
statements. Such statements involve known and unknown risks and
uncertainties that may cause the actual results, performance or
achievements of Leader to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Factors include commodity prices,
demand for oil and gas related products and service, competition,
political and economic conditions, demand and acceptance of new
products and ways of doing business, changes in laws and
regulations to which Leader is subject, and the ability to attract
and retain key personnel.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news
release.
Contacts: Leader Energy Services Ltd. Rod Hauser President &
CEO (403) 265-5400r.hauser@leaderenergy.com Leader Energy Services
Ltd. Jason Krueger, CFA Executive Vice President (403)
265-5400j.krueger@leaderenergy.com Leader Energy Services Ltd.
Graham Reid, CA VP Finance & CFO (403)
265-5400g.reid@leaderenergy.com
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