Business
Ensign Energy Services Inc. Reports 2009 Earnings
Ensign Energy Services Inc. Reports 2009 Earnings
About this update from Ensign Energy Services Inc.
[{"type":"text","content":"\n\n\n\nCALGARY, Mar. 15, 2010 (Canada NewsWire Group) -- /CNW/ --OverviewEnsign Energy Services Inc. (\"Ensign\" or the \"Company\") recorded net income of $125.4 million ($0.82 per common share) for the year ended December 31, 2009, a 52 percent decrease from $260.0 million ($1.70 per common share) recorded in 2008. Operating earnings, expressed as EBITDA (defined as earnings before interest, taxes, depreciation, amortization and stock-based compensation), for 2009 were $309.0 million, a 38 percent decrease from EBITDA of $497.1 million for the twelve months ended December 31, 2008. Funds from operations similarly decreased 37 percent to $257.4 million ($1.68 per common share) in 2009 from $406.8 million ($2.66 per common share) in the prior year. The decrease in the Company's financial results is directly attributable to the impact of the unprecedented global economic crisis that weakened oil and natural gas supply and demand fundamentals for much of the year. The oilfield services industry experienced a significant reduction in demand, particularly in North America, as the exploration and production companies, the Company's customers, reacted to weak oil and natural gas demand and commodity prices.Net income of $22.6 million ($0.15 per common share) for the fourth quarter of 2009 decreased 69 percent from net income of $73.8 million ($0.48 per common share) recorded in the fourth quarter of 2008. Net income for the fourth quarter of 2009 was negatively impacted by lower levels of demand for oilfield services and reduced margins resulting from a general over-supply of oilfield service equipment, particularly in North America. Gross margin was 28.8 percent for the fourth quarter of 2009 compared with 29.5 percent in the fourth quarter of 2008. The gross margin was negatively impacted by fourth quarter maintenance expenditures in preparation for the Canadian winter drilling season and reduced margins from United States operations as price reductions associated with contract renegotiations were implemented during the fourth quarter.Despite the challenging environment, the Company's established geographic diversification and strong balance sheet allowed it to take advantage of opportunities to continue to grow. The 14 Automated Drill Rig (\"ADR(TM)\") and seven well servicing rig new build program that commenced in 2008 was compl...