/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, May 29 /CNW/ - Western Energy Services Corp. (WRG on the TSXV), Calgary, Alberta is pleased to announce its results for the first quarter of 2009.
The operational results for the quarter ended March 31, 2009 are:
- Corporate debt held by Institutional third party lenders was reduced
by $1,108,720 or 13.2% in the quarter.
- In the quarter, the Company continued with its program to further
reduce costs by cutting staff, implementing salary rollbacks, selling
non-core assets and cutting certain administrative costs. On a go-
forward basis monthly operating costs have been reduced by $125,300
since the end of second quarter of 2008 and general and
administrative ("G&A") expenses are down 27.5% from the comparable
quarter in 2008.
- Quarterly revenues declined 36% from the corresponding quarter in
2008 reflecting the bleak state of the oil and gas services sector in
North America.
- Declining revenues resulted in reduced operating margins as fixed
costs comprised a larger share of the Company's overall cost
structure.
- The poor operating conditions have placed a major burden on the
Company's liquidity position. As a consequence the Company has
initiated discussions with its lenders with a goal of restructuring
its debt obligations. At this time the possible outcome of those
discussions can not be determined.
The operating environment for the oil and gas services sector has continued to deteriorate in the first part of Q2. Management's immediate focus is to maintain cash and liquidity to ensure the Company survives this severe downturn. Management and Board Members feel that a turnaround for the Company's services will occur later this year. In particular it is felt that demand for the Company's oil well remediation services should increase given the 92% rise in the oil commodity price since the beginning of the year.
Management will continue to focus on improving its business operations in 2009, reacting to the economic slowdown in a proactive manner that will realize upon the Company's strength of providing services to the less cyclical production side of the oil and gas industry. The Company expects that the drilling aspect of the industry will continue to experience difficulties throughout the remainder of 2009. Management believes that the Company's market direction and focus of production optimization through stimulation services will continue to provide a core revenue stream which the Company can further build upon.
Summary of Quarterly Results
Three months ended March 31, December September June 30,
2009 31, 2008 30, 2008 2008
($) ($) ($) ($)
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Revenue 2,129,871 3,140,627 3,183,814 3,071,372
(Loss) income before
loss on sale,
amortization,
interest, and
income taxes (190,764) (293,026) 237,838 (32,402)
Loss from continuing
operations (1,101,360) (1,574,438) (2,306,405) (1,168,489)
Per share(1) (0.03) (0.11) (0.16) (0.08)
Income (loss) (1,101,360) (1,574,438) (2,306,405) (1,168,489)
Per share(1) (0.03) (0.11) (0.16) (0.08)
Three months ended March 31, December September June 30,
2008 31, 2007 30, 2007 2007
($) ($) ($) ($)
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Revenue 3,336,081 3,029,342 4,142,846 2,777,477
(Loss) income before
loss on sale,
amortization,
interest, and
income taxes 115,282 (508,497) 243,071 220,236
Loss from continuing
operations (980,689) (3,095,946) (884,110) (1,057,075)
Per share(1) (0.07) (0.30) (0.10) (0.12)
Income (loss) (980,689) (3,095,946) 110,870 (1,057,075)
Per share(1) (0.07) (0.30) 0.01 (0.12)
(1) Per share amounts for all periods reflect the 1 for 12 consolidation
of shares that occurred in September 2008
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 demand for the Company's services, demand for oil remediation services, the state of the economy and energy services business and the Company's revenue stream. The forward-looking statements and information are based on certain key expectations and assumptions made by Western, including assumptions concerning the state of the economy and energy services business and its expected direction, 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.