/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, April 30 /CNW/ - Western Energy Services Corp. ("Western" or the "Company") is pleased to announce its 2008 results. Highlights for the year include:
- Annual revenues in 2008 were $12,731,894 down 16% from 2007
reflecting the slow economic and industry conditions in 2008 and the
Company's sale of non-core business assets. However revenues from
the Company's core business of production optimization were up
slightly year over year.
- Income before loss on sale, amortization, interest and income taxes
was $27,692 compared to $574,359. This measure would have improved
in 2008 if not for the effect of foreign exchange fluctuations over
the two years.
- Operating margins were maintained despite falling revenues due to the
industry and general economic slowdown.
- The remaining note payable to the Grenville Energy Partnership was
converted into equity. Combined with other debt repayments this
conversion resulted in the elimination of $5.3 million of debt.
- General and administrative ("G&A") expenses were down 12% during
2008.
- The process of disposing of non-core assets and re-investing in the
Company's fleet of production stimulation equipment was largely
completed in 2008.
Management's focus for the 2009 will be to grow revenues, increase profitability and ensure the continued improvement in business operations.
Selected Financial Information
Year ended December 31 2008 ($) 2007 ($) 2006 ($)
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Revenue 12,731,894 15,201,283 14,118,622
Income (loss) from continuing
operations, before loss on sale,
amortization, interest and income
taxes 27,692 574,359 (533,209)
Cash outflow from continuing
operations 1,583,887 1,113,645 921,005
Loss from continuing operations 5,989,875 5,520,830 3,222,375
- per share(1) 0.43 0.54 0.38
Net loss 5,989,875 4,525,850 4,667,951
- per share(1) 0.43 0.44 0.55
Total assets 22,398,435 26,902,201 19,015,931
Long term financial liabilities 1,306,822 1,593,660 1,973,786
Shareholder's equity 7,472,759 9,505,842 7,754,008
(1) Per share amounts for all periods reflect the 1 for 12 consolidation
of shares that occurred in September 2008
Fourth quarter revenues in 2008 were $3,140,627, which were an improvement over the fourth quarter of 2007 which had revenues of $3,029,342. Annual revenues in 2008 were $12,731,894 which is down 16% from 2007, due to the slow economic and industry conditions in 2008.
Operating expenses were decreased to 85% of revenues in 2008 compared to 88% in 2007 as a result 2008 operating margin (revenue less operating costs) was $1,853,372, being 98% of the 2007, operating margin of $1,897,036.
G&A expenses continued to decrease in 2008, seeing a further drop of 12%. The Company started an aggressive campaign to manage these costs in 2006 and has continued to realize salary and occupancy costs savings.
Interest expense decreased to $1,347,710 in 2008 from $1,653,077, reflecting decreasing debt levels and lowered variable costs of borrowing.
During the year the Note payable to Grenville Energy Partnership was converted into approximately 18 million shares on December 29, 2008, resulting in the elimination of approximately $3.6 million in debt and a reduction of future annual interest costs of $288,000.
Management will continue to focus on improving its business operations in 2009, reacting to the economic slowdown in a proactive manner that will realize upon the Company's strength of providing services to the less cyclical production side of the oil and gas industry. The Company expects that the drilling aspect of the industry will continue to experience difficulties in 2009. Management believes that the Company's market direction and focus of production optimization through stimulation services will continue to provide a core revenue stream which the Company can further build upon.
Western is an oil field services company trading on the TSX Venture Exchange in Canada under the symbol "WSV". Western is active in Canada, Texas and Latin America.
Forward Looking Statements
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws and necessarily involve risks associated with the oil and gas energy services industry, volatility of commodity prices, currency fluctuations, environmental risks, competition from other energy services providers, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information concerning the Loan and transactions in connection with the Loan. The forward-looking statements and information are based on certain key expectations and assumptions made by Western, including expectations and assumptions concerning the receipt of all necessary regulatory approvals which expectations and assumptions management of Western believes to be reasonable at this time. Although Western believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable at the date of this press release, undue reliance should not be placed on the forward looking statements and information as Western can give no assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, including the failure to obtain required regulatory approvals and others. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements and information contained in this press release are made as of the date hereof and Western undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.