Total Energy Services Inc. Announces Q3 2024 Results

CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and nine months ended September 30, 2024.

Financial Highlights
($000’s except per share data)

Three months ended
September 30
Nine months ended
September 30
2024 2023 Change 2024 2023 Change
Revenue $ 241,940 $ 232,016 4 % $ 659,960 $ 678,638 (3 %)
Operating income 27,308 23,691 15 % 63,950 61,112 5 %
EBITDA (1) 50,543 44,955 12 % 131,280 123,685 6 %
Cashflow 48,091 40,784 18 % 119,022 118,864
Net income 19,706 19,237 2 % 50,623 49,455 2 %
Attributable to shareholders 19,731 19,231 3 % 50,685 49,472 2 %
Per Share Data (Diluted)
EBITDA (1) $ 1.28 $ 1.10 16 % $ 3.27 $ 3.00 9 %
Cashflow $ 1.22 $ 1.00 22 % $ 2.97 $ 2.88 3 %
Attributable to shareholders:
Net income $ 0.50 $ 0.47 6 % $ 1.26 $ 1.20 5 %
Common shares (000’s)(4)
Basic 38,802 40,149 (3 %) 39,385 40,555 (3 %)
Diluted 39,489 40,961 (4 %) 40,086 41,291 (3 %)
 
  September 30 December 31
Financial Position at 2024 2023 Change
Total Assets $ 963,743 $ 861,658 12 %
Long-Term Debt and Lease Liabilities (excluding current portion) 104,997 100,834 4 %
Working Capital (2) 97,274 123,439 (21 %)
Net Debt (3) 7,723 nm
Shareholders’ Equity 561,211 530,758 6 %

Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.

nm – calculation not meaningful

Total Energy’s results for the three months ended September 30, 2024 represent record quarterly financial results. Substantial share repurchases over the past year amplified the results on a fully diluted per share basis.   Underpinning these record results were stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment that more than offset a year over year decline in drilling and completion activity in the United States.

Contract Drilling Services (“CDS”)

Three months ended
September 30
Nine months ended
September 30
2024 2023 Change 2024 2023 Change
Revenue $ 86,634 $ 75,815 14 % $ 235,734 $ 212,633 11 %
EBITDA (1) $ 20,563 $ 21,670 (5 %) $ 57,414 $ 51,830 11 %
EBITDA (1) as a % of revenue 24 % 29 % (17 %) 24 % 24 %
Operating days(2) 2,836 2,880 (2 %) 7,687 7,723
Canada 1,861 2,009 (7 %) 4,954 5,023 (1 %)
United States 328 535 (39 %) 1,033 1,696 (39 %)
Australia   647 336 93 %   1,700 1,004 69 %
Revenue per operating day(2), dollars $ 30,548 $ 26,325 16 % $ 30,667 $ 27,532 11 %
Canada 25,026 24,522 2 % 26,137 25,668 2 %
United States 27,829 28,540 (2 %) 28,566 28,326 1 %
Australia   47,808 33,577 42 %   45,144 35,522 27 %
Utilization 29 % 33 % (12 %) 27 % 30 % (10 %)
Canada 27 % 28 % (4 %) 24 % 24 %
United States 30 % 48 % (38 %) 31 % 53 % (42 %)
Australia   41 % 73 % (44 %)   46 % 74 % (38 %)
Rigs, average for period 105 94 12 % 103 94 10 %
Canada 76 77 (1 %) 77 77
United States 12 12 12 12
Australia   17 5 240 %   14 5 180 %

(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Operating days includes drilling and paid standby days.

Canadian drilling activity during the third quarter of 2024 was relatively consistent with 2023 while United States activity continued to lag the prior year. Canadian operating days were negatively impacted when an AC double drilling rig was damaged in July during transit. The rig returned to service in mid-October following completion of repairs. In Australia, Saxon contributed $20.2 million of revenue during the third quarter of 2024. Included in 2023 third quarter segment EBITDA was a $4.1 million realized foreign exchange gain on settlement of intercompany notes. Excluding the effect of this foreign exchange gain, third quarter segment EBITDA increased 17% as compared to 2023 and the segment EBITDA margin increased from 23% to 24%. The substantial year over year increase in third quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.

Rentals and Transportation Services (“RTS”)

Three months ended
September 30
Nine months ended
September 30
2024 2023 Change 2024 2023 Change
Revenue $ 19,437 $ 21,137 (8 %) $ 59,614 $ 65,362 (9 %)
EBITDA (1) $ 8,179 $ 7,263 13 % $ 23,958 $ 23,977
EBITDA (1) as a % of revenue 42 % 34 % 24 % 40 % 37 % 8 %
Revenue per utilized piece of equipment, dollars $ 12,868 $ 12,825 $ 42,297 $ 42,473
Pieces of rental equipment 7,960 7,659 4 % 7,960 7,659 4 %
Canada 7,040 6,767 4 % 7,040 6,767 4 %
United States 920 892 3 % 920 892 3 %
Rental equipment utilization 19 % 19 % 18 % 18 %
Canada 18 % 18 % 16 % 16 %
United States 29 % 27 % 7 % 33 % 36 % (8 %)
Heavy trucks 67 69 (3 %) 67 69 (3 %)
Canada 46 48 (4 %) 46 48 (4 %)
United States 21 21 21 21

(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.

Third quarter revenue in the RTS segment decreased as compared to 2023 due to lower United States revenue. While United States equipment utilization increased slightly, lower pricing due to competitive market conditions and the mix of equipment operating contributed to a year over year decline in third quarter revenue. Despite the decline in segment revenue, effective cost management resulted in higher third quarter EBITDA and EBITDA margins as compared to 2023.

Compression and Process Services (“CPS”)

Three months ended
September 30
Nine months ended
September 30
2024   2023 Change 2024   2023 Change
Revenue $ 110,567 $ 110,959 $ 297,547 $ 322,207 (8 %)
EBITDA (1) $ 19,336 $ 14,404 34 % $ 47,795 $ 39,402 21 %
EBITDA (1) as a % of revenue 17 % 13 % 31 % 16 % 12 % 33 %
Horsepower of equipment on rent at period end 52,881 36,616 44 % 52,881 36,616 44 %
Canada 16,661 15,226 9 % 16,661 15,226 9 %
United States   36,220 21,390 69 %   36,220 21,390 69 %
Rental equipment utilization during the period (HP)(2) 77 % 69 % 12 % 77 % 75 % 3 %
Canada 72 % 73 % (1 %) 70 % 77 % (9 %)
United States   79 % 67 % 18 %   80 % 74 % 8 %
Sales backlog at period end, $ million $ 189.0 $ 152.9 24 % $ 189.0 $ 152.9 24 %

(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Rental equipment utilization is measured on a horsepower basis.

CPS segment revenue for the third quarter of 2024 was consistent with 2023 and decreased during the first nine months of 2024 as compared to the same period in 2023.   Improved fabrication efficiencies and a significant increase in compression horsepower on rent contributed to the year over year increase in segment EBITDA and EBITDA margin.   The quarter end fabrication sales backlog increased by $36.1 million compared to the $152.9 million backlog at September 30, 2023 and decreased sequentially by $15.6 million from the $204.6 million sales backlog at June 30, 2024.

Well Servicing (“WS”)

Three months ended
September 30
Nine months ended
September 30
2024   2023 Change 2024   2023 Change
Revenue $ 25,302 $ 24,105 5 % $ 67,065 $ 78,436 (14 %)
EBITDA (1) $ 4,943 $ 5,044 (2 %) $ 11,344 $ 16,177 (30 %)
EBITDA (1) as a % of revenue 20 % 21 % (5 %) 17 % 21 % (19 %)
Service hours(2) 24,680 26,044 (5 %) 67,307 81,920 (18 %)
Canada 13,412 12,140 10 % 37,229 38,988 (5 %)
United States 2,613 6,370 (59 %) 9,243 18,781 (51 %)
Australia   8,655 7,534 15 %   20,835 24,151 (14 %)
Revenue per service hour(2), dollars $ 1,025 $ 926 11 % $ 996 $ 957 4 %
Canada 958 923 4 % 962 955 1 %
United States 861 944 (9 %) 883 980 (10 %)
Australia   1,179 913 29 %   1,109 944 17 %
Utilization(3) 27 % 30 % (8 %) 25 % 32 % (20 %)
Canada 27 % 24 % 13 % 24 % 26 % (8 %)
United States 24 % 63 % (62 %) 31 % 63 % (51 %)
Australia   33 % 28 % 18 %   26 % 31 % (16 %)
Rigs, average for period 79 79 79 79
Canada 55 56 (2 %) 56 56
United States 12 11 9 % 11 11
Australia   12 12   12 12

(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2) Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby.
(3) The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.

Third quarter WS segment revenue increased in 2024 as compared to 2023 due to increased activity in Canada and Australia that offset a substantial decline in United States activity. Segment EBITDA was modestly lower as higher operating income in Canada and Australia was more than offset by the decline in United States operating income. Activity levels in the United States were significantly lower due in part to significant customer consolidation. Increased pricing and utilization in Australia was due to the deployment of upgraded rigs.

Corporate

During the third quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. Including the acquisition of Saxon, $112.4 million of capital expenditures have been funded to September 30, 2024.

Total Energy exited the third quarter of 2024 with $97.3 million of positive working capital, including $61.9 million of cash, and $80 million of available credit under its $175 million of revolving bank credit facilities. Included in current liabilities is a $41.5 million mortgage loan that matures in April of 2025. Total Energy expects to repay this debt at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at September 30, 2024 was 5.26%.

Outlook

Despite continued global economic uncertainty and commodity price volatility, industry conditions remain relatively stable. Contributing to this stability is continued investment to increase North American LNG export capacity, a strong Asian LNG market and the recent completion of the Trans Mountain pipeline expansion in Canada. Total Energy’s efforts to grow its Australian business continued in the third quarter when two drilling rigs and a service rig commenced operations under long term contracts.

Total Energy continues to see opportunities to upgrade and reactivate equipment as well as targeted opportunities to build new equipment. In that regard, the Board of Directors has approved a $19.8 million increase to the Company’s 2024 capital expenditure budget to $86.1 million. $13.1 million of this increase is directed towards growth opportunities, including the upgrade of two Saxon drilling rigs and one service rig in Australia that will be deployed in the first quarter of 2025 under long term contracts. Also included in growth capital is $1.0 million of new rental equipment for the RTS segment that will be deployed during the fourth quarter of 2024. The remaining $6.7 million includes the purchase of new drill pipe and an operating facility currently leased by the RTS segment in the United States as well as drilling rig recertifications. Including this increase, $14.2 million of capital commitments carried forward from 2023 and the acquisition of Saxon, projected 2024 capital expenditures total $147.7 million, of which $112.4 million has been funded to September 30, 2024. The Company expects to fund the remaining $35.3 million of capital commitments with cash on hand and cashflow, with approximately $10.0 million expected to be funded in 2025.

Conference Call

At 9:00 a.m. (Mountain Time) on November 7, 2024 Total Energy will conduct a conference call and webcast to discuss its third quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (844) 763-8274 or (647) 484-8814. Those who are unable to listen to the call live may listen to a recording of it on Total Energy’s website. A recording of the conference call will also be available until December 7, 2024 by dialing (855) 669-9658 (passcode 1362549).

Selected Financial Information

Selected financial information relating to the three and nine months ended September 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)

  September 30 December 31
2024 2023
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 61,879 $ 47,935
Accounts receivable 147,293 137,604
Inventory 116,359 98,179
Prepaid expenses and deposits 16,763 16,735
342,294 300,453
Property, plant and equipment 617,129 557,152
Deferred income tax asset 267
Goodwill 4,053 4,053
  $ 963,743 $ 861,658
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities $ 132,910 $ 116,794
Deferred revenue 53,477 39,321
Contingent consideration on business acquisition 2,700
Income taxes payable 4,489 9,771
Dividends payable 3,453 3,198
Current portion of lease liabilities 6,528 5,880
Current portion of long-term debt 41,463 2,050
245,020 177,014
Long-term debt 95,000 90,947
Lease liabilities 9,997 9,887
Deferred income tax liability 52,515 53,052
Shareholders’ equity:
Share capital 240,563 251,283
Contributed surplus 5,273 4,805
Accumulated other comprehensive loss (18,235 ) (25,506 )
Non-controlling interest 259 521
Retained earnings 333,351 299,655
561,211 530,758
$ 963,743 $ 861,658

Consolidated Statements of Income
(in thousands of Canadian dollars except per share amounts)
(unaudited)

  Three months ended
September 30
Nine months ended
September 30
2024 2023 2024 2023
Revenue $ 241,940 $ 232,016 $ 659,960 $ 678,638
Cost of services 178,530 175,235 491,092 522,270
Selling, general and administration 13,337 12,027 37,512 33,586
Other expense (income) (844 ) 238 (720 ) (208 )
Share-based compensation 518 701 1,940 1,457
Depreciation 23,091 20,124 66,186 60,421
Operating income 27,308 23,691 63,950 61,112
Gain on sale of property, plant and equipment 144 1,140 1,144 2,152
Finance costs, net (2,330 ) (1,691 ) (6,318 ) (5,190 )
Net income before income taxes 25,122 23,140 58,776 58,074
Current income tax (recovery) expense 2,072 (231 ) 7,090 140
Deferred income tax expense 3,344 4,134 1,063 8,479
Total income tax expense 5,416 3,903 8,153 8,619
Net income $ 19,706 $ 19,237 $ 50,623 $ 49,455
Net income (loss) attributable to:
Shareholders of the Company $ 19,731 $ 19,231 $ 50,685 $ 49,472
Non-controlling interest (25 ) 6 (62 ) (17 )
Income per share
Basic $ 0.51 $ 0.48 $ 1.29 $ 1.22
Diluted $ 0.50 $ 0.47 $ 1.26 $ 1.20

Consolidated Statements of Comprehensive Income

  Three months ended
September 30
Nine months ended
September 30
2024 2023 2024 2023
Net income $ 19,706 $ 19,237 $ 50,623 $ 49,455
Foreign currency translation (31 ) (1,734 ) 7,271 (7,034 )
Total other comprehensive income (loss) for the period (31 ) (1,734 ) 7,271 (7,034 )
Total comprehensive income $ 19,675 $ 17,503 $ 57,894 $ 42,421
Total comprehensive income (loss) attributable to:
Shareholders of the Company $ 19,700 $ 17,497 $ 57,956 $ 42,438
Non-controlling interest (25 ) 6 (62 ) (17 )

Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)

Three months ended
September 30
Nine months ended
September 30
2024 2023 2024 2023
Cash provided by (used in):
Operations:
Net income for the period $ 19,706 $ 19,237 $ 50,623 $ 49,455
Add (deduct) items not affecting cash:
Depreciation 23,091 20,124 66,186 60,421
Share-based compensation 518 701 1,940 1,457
Gain on sale of property, plant and equipment (144 ) (1,140 ) (1,144 ) (2,152 )
Finance costs, net 2,330 1,691 6,318 5,190
Foreign currency translation (999 ) (3,934 ) (336 ) (4,284 )
Current income tax (recovery) expense 2,072 (231 ) 7,090 140
Deferred income tax expense 3,344 4,134 1,063 8,479
Income taxes paid (1,827 ) 202 (12,718 ) 158
Cashflow 48,091 40,784 119,022 118,864
Changes in non-cash working capital items:
Accounts receivable (1,109 ) (13,516 ) (9,689 ) (8,396 )
Inventory 3,527 10,194 (18,180 ) (9,850 )
Prepaid expenses and deposits (2,637 ) (5,353 ) (28 ) (5,207 )
Accounts payable and accrued liabilities 9,029 (8,066 ) 21,896 10,480
Deferred revenue 3,452 (2,104 ) 14,156 (10,309 )
Cash provided by operating activities 60,353 21,939 127,177 95,582
Investing:
Purchase of property, plant and equipment (14,700 ) (17,177 ) (65,038 ) (59,631 )
Cash paid on acquisition (47,350 )
Proceeds on disposal of property, plant and equipment 156 4,906 1,705 6,410
Changes in non-cash working capital items (441 ) (12 ) 3,260 2,492
Cash used in investing activities (14,985 ) (12,283 ) (107,423 ) (50,729 )
Financing:
Advances of long-term debt 5,000 65,000
Repayment of long-term debt (513 ) (498 ) (21,534 ) (16,491 )
Repayment of lease liabilities (1,742 ) (1,558 ) (5,134 ) (4,714 )
Dividends to shareholders (3,496 ) (3,212 ) (10,290 ) (8,944 )
Repurchase of common shares (5,183 ) (2,298 ) (17,853 ) (13,587 )
Shares issued on exercise of stock options 42 64 42
Partnership distributions (200 )
Interest paid (2,319 ) (2,113 ) (15,863 ) (5,335 )
Cash used in financing activities (8,253 ) (9,637 ) (5,810 ) (49,029 )
Change in cash and cash equivalents 37,115 19 13,944 (4,176 )
Cash and cash equivalents, beginning of period 24,764 29,866 47,935 34,061
Cash and cash equivalents, end of period $ 61,879 $ 29,885 $ 61,879 $ 29,885

Segmented Information

The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor required to operate the equipment. Corporate includes activities related to the Company’s corporate and public issuer affairs.

As at and for the three months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)

Contract Rentals and Compression Well Corporate Total
Drilling Transportation and Process Servicing (1)
Services Services Services
Revenue $ 86,634 $ 19,437 $ 110,567 $ 25,302 $ $ 241,940
Cost of services 63,727 9,165 86,723 18,915 178,530
Selling, general and administration 2,358 2,144 4,587 1,444 2,804 13,337
Other income (844 ) (844 )
Share-based compensation 518 518
Depreciation 12,287 5,145 2,788 2,446 425 23,091
Operating income (loss) 8,262 2,983 16,469 2,497 (2,903 ) 27,308
Gain (loss) on sale of property, plant and equipment 14 51 79 144
Finance costs, net (17 ) (43 ) (109 ) (19 ) (2,142 ) (2,330 )
Net income (loss) before income taxes 8,259 2,991 16,439 2,478 (5,045 ) 25,122
Goodwill 2,514 1,539 4,053
Total assets 434,030 163,853 284,919 76,899 4,042 963,743
Total liabilities 84,042 26,558 111,634 6,473 173,825 402,532
Capital expenditures 9,184 2,269 1,076 2,171 14,700

Canada United States Australia International Total
Revenue $ 117,704 $ 82,514 $ 41,722 $ $ 241,940
Non-current assets (2) 364,318 131,534 125,330 621,182

As at and for the three months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)

Contract Rentals and Compression Well Corporate Total
Drilling Transportation and Process Servicing (1)
Services Services Services
Revenue $ 75,815 $ 21,137 $ 110,959 $ 24,105 $ $ 232,016
Cost of services 51,265 11,828 94,122 18,020 175,235
Selling, general and administration 2,581 2,240 3,327 1,208 2,671 12,027
Other (income) expense 308 7 (131 ) 54 238
Share-based compensation 701 701
Depreciation 9,580 4,903 2,585 2,802 254 20,124
Operating income (loss) 12,081 2,159 11,056 2,075 (3,680 ) 23,691
Gain on sale of property, plant and equipment 9 201 763 167 1,140
Finance costs, net (14 ) (28 ) (121 ) (18 ) (1,510 ) (1,691 )
Net income (loss) before income taxes 12,076 2,332 11,698 2,224 (5,190 ) 23,140
Goodwill 2,514 1,539 4,053
Total assets 367,553 176,330 275,886 74,376 180 894,325
Total liabilities 72,824 28,851 110,391 6,980 132,751 351,797
Capital expenditures 9,094 1,643 4,268 1,937 235 17,177

Canada United States Australia International Total
Revenue $ 111,945 $ 99,790 $ 20,281 $ $ 232,016
Non-current assets (2) 393,168 129,263 46,240 568,671

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

As at and for the nine months ended September 30, 2024 (unaudited, in thousands of Canadian dollars)

As at and for the nine months ended Contract Rentals and Compression Well Corporate Total
September 30, 2024 Drilling Transportation and Process Servicing (1)
Services Services Services
Revenue $ 235,734 $ 59,614 $ 297,547 $ 67,065 $ $ 659,960
Cost of services 171,011 29,933 238,453 51,695 491,092
Selling, general and administration 7,424 6,567 11,508 4,002 8,011 37,512
Other expense (720 ) (720 )
Share-based compensation 1,940 1,940
Depreciation 34,669 15,228 7,999 7,269 1,021 66,186
Operating income (loss) 22,630 7,886 39,587 4,099 (10,252 ) 63,950
Gain (loss) on sale of property, plant and equipment 115 844 209 (24 ) 1,144
Finance costs, net (55 ) (130 ) (321 ) (64 ) (5,748 ) (6,318 )
Net income (loss) before income taxes 22,690 8,600 39,475 4,011 (16,000 ) 58,776
Goodwill 2,514 1,539 4,053
Total assets 434,030 163,853 284,919 76,899 4,042 963,743
Total liabilities 84,042 26,558 111,634 6,473 173,825 402,532
Capital expenditures 30,762 7,442 15,263 11,571 65,038

Canada United States Australia International Total
Revenue $ 294,720 $ 260,102 $ 102,184 $ 2,954 $ 659,960
Non-current assets (2) 364,318 131,534 125,330 621,182

As at and for the nine months ended September 30, 2023 (unaudited, in thousands of Canadian dollars)

As at and for the nine months ended Contract Rentals and Compression Well Corporate Total
September 30, 2023 Drilling Transportation and Process Servicing (1)
Services Services Services
Revenue $ 212,633 $ 65,362 $ 322,207 $ 78,436 $ $ 678,638
Cost of services 153,466 35,725 273,607 59,472 522,270
Selling, general and administration 7,552 6,374 10,122 3,124 6,414 33,586
Other (income) expense 20 (88 ) (140 ) (208 )
Share-based compensation 1,457 1,457
Depreciation 28,107 14,620 7,822 9,091 781 60,421
Operating income (loss) 23,488 8,643 30,744 6,749 (8,512 ) 61,112
Gain on sale of property, plant and equipment 235 714 836 337 30 2,152
Finance costs, net (44 ) (63 ) (353 ) (51 ) (4,679 ) (5,190 )
Net income (loss) before income taxes 23,679 9,294 31,227 7,035 (13,161 ) 58,074
Goodwill 2,514 1,539 4,053
Total assets 367,553 176,330 275,886 74,376 180 894,325
Total liabilities 72,824 28,851 110,391 6,980 132,751 351,797
Capital expenditures 40,528 5,777 6,783 6,308 235 59,631

Canada United States Australia International Total
Revenue $ 303,329 $ 303,617 $ 71,692 $ $ 678,638
Non-current assets (2) 393,168 129,263 46,240 568,671

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.

For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or visit our website at www.totalenergy.ca.

Notes to the Financial Highlights

(1) EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations.

(2) Working capital equals current assets minus current liabilities.

(3) Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.

(4) Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 6 to the Company’s Condensed Interim Consolidated Financial Statements.

Certain statements contained in this press release, including statements which may contain words such as “could”, “should”, “expect”, “believe”, “will” and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.

In particular, this press release contains forward-looking statements concerning industry activity levels, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy’s ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy’s most recently filed Annual Information Form and other public disclosures (available at http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.

The TSX has neither approved nor disapproved of the information contained herein.

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