Comments
yourfanat wrote: I am using another tool for Oracle developers - dbForge Studio for Oracle. This IDE has lots of usefull features, among them: oracle designer, code competion and formatter, query builder, debugger, profiler, erxport/import, reports and many others. The latest version supports Oracle 12C. More information here.
Cloud Expo on Google News
SYS-CON.TV

2008 West
DIAMOND SPONSOR:
Data Direct
SOA, WOA and Cloud Computing: The New Frontier for Data Services
PLATINUM SPONSORS:
Red Hat
The Opening of Virtualization
GOLD SPONSORS:
Appsense
User Environment Management – The Third Layer of the Desktop
Cordys
Cloud Computing for Business Agility
EMC
CMIS: A Multi-Vendor Proposal for a Service-Based Content Management Interoperability Standard
Freedom OSS
Practical SOA” Max Yankelevich
Intel
Architecting an Enterprise Service Router (ESR) – A Cost-Effective Way to Scale SOA Across the Enterprise
Sensedia
Return on Assests: Bringing Visibility to your SOA Strategy
Symantec
Managing Hybrid Endpoint Environments
VMWare
Game-Changing Technology for Enterprise Clouds and Applications
Click For 2008 West
Event Webcasts

2008 West
PLATINUM SPONSORS:
Appcelerator
Get ‘Rich’ Quick: Rapid Prototyping for RIA with ZERO Server Code
Keynote Systems
Designing for and Managing Performance in the New Frontier of Rich Internet Applications
GOLD SPONSORS:
ICEsoft
How Can AJAX Improve Homeland Security?
Isomorphic
Beyond Widgets: What a RIA Platform Should Offer
Oracle
REAs: Rich Enterprise Applications
Click For 2008 Event Webcasts
Essential Energy Services Announces Third Quarter Results and Quarterly Dividend

CALGARY, ALBERTA -- (Marketwire) -- 11/08/12 -- Essential Energy Services Ltd. (TSX:ESN) ("Essential" or the "Company") announces third quarter results with EBITDA(1) of $19.1 million compared to $27.3 million in the third quarter of 2011. On a year-to-date basis, EBITDA(1) was $50.9 million compared to $40.6 million in the same period of 2011.

SELECTED FINANCIAL INFORMATION


                                 Three months ended       Nine months ended 
(Thousands, except per share          September 30,           September 30, 
 amounts)                          2012        2011        2012        2011 
----------------------------------------------------------------------------
                                                                            
Revenue                       $  84,896   $  99,416   $ 256,809   $ 206,311 
                                                                            
Gross margin                  $  22,979   $  31,100   $  63,150   $  50,829 
  Gross margin %(1)                  27%         31%         25%         25%
EBITDA(1)                     $  19,062   $  27,293   $  50,935   $  40,557 
  EBITDA %(1)                        22%         27%         20%         20%
Funds flow from operations                                                  
 (1)                          $  17,466   $  23,857   $  47,212   $  34,584 
  Per share - basic and                                                     
   diluted (1)                $    0.14   $    0.19   $    0.38   $    0.36 
                                                                            
Net income attributable to                                                  
 shareholders of Essential    $   8,660   $  13,678   $  21,631   $  13,563 
  Per share - basic and                                                     
   diluted                    $    0.07   $    0.11   $    0.17   $    0.14 
                                                                            
Total assets                  $ 415,653   $ 411,204   $ 415,653   $ 411,204 
Total long-term debt          $  50,474   $  79,230   $  50,474   $  79,230 
Equity attributed to                                                        
 shareholders of Essential    $ 304,312   $ 271,681   $ 304,312   $ 271,681 
----------------------------------------------------------------------------
(1) Refer to Non-IFRS measures.                                             

Completion of the acquisition of Technicoil Corporation ("Technicoil" or the "Technicoil Acquisition") on May 31, 2011 impacts the results for the nine months ended September 30, 2012 compared to the same period in 2011. The results for Technicoil are not included for January to May of 2011.

INDUSTRY OVERVIEW

At the start of the third quarter the Canadian oilfield services industry faced wet weather conditions and exploration and production ("E&P") companies were dealing with various uncertainties including pipeline limitations, volatile crude oil prices and unpredictable capital markets. These factors contributed to E&P companies curtailing or delaying capital spending. As a result, the drilling rig count was down 25% in the Western Canadian Sedimentary Basin ("WCSB") during the third quarter 2012 compared to the third quarter of 2011. The drop in drilling rig count also reduced well completion activity, including deep coil well service completion work.

Well service activity in the WCSB continues to be driven by horizontal drilling, stimulation and completion of oil and liquids-rich natural gas plays. The industry continues to focus on horizontal wells which typically require more investment capital and increased rig time per well due to their depth and complexity compared to conventional vertical wells.

OPERATING HIGHLIGHTS - ESSENTIAL

Results for the third quarter 2012 reflect a year-over-year decline in activity across all of Essential's operations. During the quarter:


--  Coil well service - The coil well service fleet performed relatively
    well in the quarter despite a slowdown in industry activity with deep
    utilization of 79%, compared to 104% in the third quarter 2011. 
--  Service rigs - Completion and workover activity was sporadic during the
    quarter as customers managed spending levels. Service rig utilization
    was 45% in the third quarter 2012 compared to 54% in the third quarter
    2011. 
--  Downhole tools & rentals - The downhole tools business reported strong
    performance in both the Tryton multi-stage fracturing system ("Tryton
    MSFS") and conventional tools. 

Essential continued to execute its 2012 capital program but some spending has been deferred to 2013 by manufacturing delays during the year. Year-to-date capital expenditures were $34 million, consisting of $22 million in growth capital, $11 million in maintenance capital and $1 million in infrastructure. Essential continues to focus on investing in high-demand assets in addition to maintaining and enhancing its existing fleet. During the third quarter, Essential converted one intermediate coil tubing rig to a deep coil tubing rig and added two custom built, mobile free standing, all period double service rigs. One of these service rigs was purpose-built to work on steam-assisted gravity drainage ("SAGD") wells.

SEGMENT RESULTS - WELL SERVICING - CANADA


                                   Three months ended     Nine months ended 
                                        September 30,         September 30, 
(Thousands)                           2012       2011       2012       2011 
----------------------------------------------------------------------------
                                                                            
Revenue                                                                     
  Coil well service(i)            $ 33,857   $ 36,349   $ 94,968   $ 60,351 
  Service rigs                      17,465     20,969     60,218     54,448 
  Other                              5,849      7,148     20,246     12,880 
----------------------------------------------------------------------------
Total revenue                       57,171     64,466    175,432    127,679 
                                                                            
Operating expenses                  41,537     41,481    134,091     94,165 
----------------------------------------------------------------------------
                                                                            
Gross margin                      $ 15,634   $ 22,985   $ 41,341   $ 33,514 
  Gross margin %(1)                     27%        36%        24%        26%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Utilization(ii)                                                             
---------------------------------                                           
  Deep coil tubing rigs                                                     
    Utilization                         79%       104%        71%        90%
    Operating hours                 18,301     21,938     48,799     30,151 
  Service rigs                                                              
    Utilization                         45%        54%        49%        49%
    Operating hours                 22,632     28,201     74,003     70,140 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Includes revenue from coil tubing rigs, nitrogen and fluid pumpers and  
 other ancillary equipment.                                                 
(ii) Utilization is calculated on a 10 hour day.                            

Completion of the acquisition of Technicoil on May 31, 2011 impacts the results for the nine months ended September 30, 2012 compared to the same period in 2011. The results for Technicoil for January to May 2011 are not included in the prior year comparatives.

Coil well service revenue decreased during the third quarter 2012 as a result of a year-over-year decrease in the number of new wells drilled and the number of wells completed. Deep coil tubing utilization was 79% during the third quarter 2012 compared to 104% for the same period in 2011. Overall, conventional deep coil tubing utilization decreased due to a decline in stimulation work in southern Alberta. Strong demand for masted deep coil tubing rigs generated similar revenue in the third quarter of 2012 compared to 2011. Essential's larger nitrogen and fluid pumper fleet generated increased revenue during the third quarter 2012 compared to 2011. The 2012 year-to-date increase in coil well service revenue reflects the timing of the Technicoil Acquisition. The current year impact of price increases introduced during the second half of 2011, and an increase in nitrogen and pumper revenue, has increased the rate per hour.

Service rig revenue decreased from the same quarter in the prior year due to wet weather conditions in July and uncertain customer spending plans. While Essential continued to see strong utilization from its service rigs in the Slave Lake region and on SAGD wells, this was offset by decreased activity across the remainder of Essential's fleet. Service rig revenue increased for the year-to-date over the same period in the prior year due to the service rigs added through the Technicoil Acquisition. Service rig pricing remained relatively stable for both the quarter and on a year-to-date basis.

During the third quarter, other revenue, which includes hybrid drilling rigs and rod rigs, decreased compared to the prior year. Utilization of the hybrid drilling rigs was adversely impacted by weather delays which resulted in utilization of 33% during the third quarter of 2012 compared to 48% in 2011.

Gross margin was lower in the third quarter of 2012 compared to the same period in the prior year. The year-over-year change was a result of lower utilization, the costs associated with increasing coil well service personnel, write-off of exhausted coil inventory, and higher repair and maintenance costs in a few locations. During the quarter, Essential also began hiring and training additional coil well service staff to ensure it has qualified personnel available to staff the new equipment that Essential is building under its 2012 capital program. Lower than anticipated utilization and delays in new equipment deliveries resulted in Essential incurring additional labour costs. It is anticipated that these costs will continue to impact the fourth quarter, but should be mostly absorbed in the first quarter of 2013 once the new equipment starts to arrive. During the nine months ended September 30, 2012, operating expenses were higher than in 2011 due to Technicoil's annual maintenance programs in the second quarter that are included in the current year results but not in the comparable information for the prior year as the costs were incurred prior to the completion of the Technicoil Acquisition.

SEGMENT RESULTS - DOWNHOLE TOOLS & RENTALS - CANADA


                                   Three months ended     Nine months ended 
                                        September 30,         September 30, 
(Thousands)                            2012      2011        2012      2011 
----------------------------------------------------------------------------
                                                                            
Revenue                            $ 26,342  $ 33,316    $ 77,133  $ 76,637 
                                                                            
Operating expenses                   17,587    23,428      51,602    54,857 
----------------------------------------------------------------------------
                                                                            
Gross margin                       $  8,755  $  9,888    $ 25,531  $ 21,780 
  Gross margin %(1)                      33%       30%         33%       28%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Number of Tryton MSFS jobs               89        85         210       167 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The downhole tools & rentals segment focuses on oil and liquids-rich natural gas plays by providing production and completion tools for horizontal and vertical wells. Operations for this segment are well placed geographically across many of the active oil plays in the WCSB.

During the third quarter of 2012, demand for the Tryton MSFS remained relatively unchanged compared to the same quarter in the prior year. The average revenue per MSFS job decreased as customers reduced the number of stages per MSFS job as part of their efforts to minimize horizontal well completion costs. In the third quarter of 2012, activity levels for Essential's conventional downhole tools business remained consistent with 2011. Segment revenue also decreased in the third quarter due to a reduction in activity of the rental operations and the disposal of the wireline business in February 2012.

During the nine months ended September 30, 2012, Essential's downhole tools & rentals segment continued to grow compared to the same period in 2011. The industry continued using multi-stage fracturing services for completions on horizontal wells, and Essential realized continued growth in its conventional downhole tools operations. During the first nine months of 2012, Essential completed 210 Tryton MSFS jobs compared to 167 jobs over the same period in 2011.

The gross margin percentage for this segment improved over the prior year as a result of tool procurement efficiencies and the disposition of the wireline business. Wireline historically generated lower margins compared to the ongoing operations of this segment.

COLOMBIA

Essential services producing wells from its operating base in Barrancabermeja, Colombia. The Colombian operations were slightly cash flow negative during the quarter and revenue was below management expectations due to periods of inactivity largely related to the service rig operations. The Colombian operations continued to experience inconsistent activity. Essential is pursuing opportunities to stabilize activity and improve these operations. Management believes that there is significant demand for the services Essential provides and is continuing to pursue reliable work arrangements with a broader customer base.

GENERAL AND ADMINISTRATIVE


                                     Three months ended   Nine months ended 
                                          September 30,       September 30, 
(Thousands)                              2012      2011      2012      2011 
----------------------------------------------------------------------------
                                                                            
General and administrative expenses  $  3,917  $  3,807  $ 12,215  $ 10,272 
  As a % of revenue                         5%        4%        5%        5%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

General and administrative expenses are comprised of wages, professional fees, office space and other administrative costs incurred at the corporate and operational level. General and administrative expenses as a percentage of revenue increased in the third quarter of 2012 due to the impact of lower revenue. General and administrative expenses increased on a year-to-date basis in 2012 primarily due to additional administrative costs associated with Technicoil field operations which are only included in the 2011 comparative information for four months following completion of the Technicoil Acquisition.

WORKING CAPITAL


                                               September 30,  September 30, 
(Thousands)                                             2012           2011 
----------------------------------------------------------------------------
                                                                            
Current assets                                     $  92,937      $  98,314 
Current liabilities, excluding current portion                              
 of long-term debt                                   (33,180)       (39,166)
----------------------------------------------------------------------------
Working capital                                    $  59,757      $  59,148 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Working capital ratio                                2.8 : 1        2.5 : 1 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The increase in working capital is a result of Essential's operating results compared to the prior year.

CREDIT FACILITY

Essential's Credit Facility with its banking syndicate is comprised of a $100 million revolving term loan facility with a $35 million accordion feature available on lender's consent. The revolving term loan facility matures on May 30, 2014, is renewable at the lender's consent and is secured by a general security agreement over the Company's assets. To the extent the revolving term loan facility is not renewed, debt payments would be required over a two year period based on a three year amortization schedule. At September 30, 2012, the maximum of $100 million was available to Essential.

As at September 30, 2012, all financial debt covenants were satisfied and all banking requirements were up to date. Essential does not anticipate any financial resource or liquidity issues to restrict its future operating, investing or financing activities. On November 7, 2012, Essential had long-term debt outstanding of $51 million.

EQUIPMENT EXPENDITURES


                                   Three months ended     Nine months ended 
                                        September 30,         September 30, 
(Thousands)                           2012       2011       2012       2011 
----------------------------------------------------------------------------
                                                                            
  Well Servicing                 $  10,480  $  14,245  $  31,568  $  28,167 
  Downhole Tools & Rentals             168      1,534      1,381      4,663 
  Corporate                            115        246        825        671 
----------------------------------------------------------------------------
Total equipment expenditures        10,763     16,025     33,774     33,501 
----------------------------------------------------------------------------
                                                                            
Less: proceeds on disposal of                                               
 property and equipment               (169)      (578)    (8,284)    (2,929)
----------------------------------------------------------------------------
Net equipment expenditures(1)    $  10,594  $  15,447  $  25,490  $  30,572 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Essential continues to execute its 2012 capital program. The delivery of certain equipment has been delayed due to equipment manufacturers encountering manpower shortages and procurement delays. 2012 capital spending is expected to decrease from the previous expectation of $57 million to $51 million due to these delays and is now expected to consist of $36 million in growth capital and $15 million in maintenance and infrastructure capital. The program continues to focus on increasing the depth capacity of the coil tubing fleet, expanding the pumping fleet to support deeper horizontal well activity and enhancing the service rig fleet.

During the first nine months of 2012, Essential added the following assets to its fleet:


--  One intermediate coil tubing rig was converted to a deep coil tubing
    rig. 
--  One 1,000 HP quintiplex fluid pumper. 
--  Three custom built, mobile free standing, all-period double service
    rigs. One of these service rigs was purpose-built to work on SAGD wells.

Essential expects to add the following assets to its fleet through the remainder of 2012 and into 2013:


                                                        Expected In-Service 
                                                               Date         
                                             Quantity       2012       2013 
----------------------------------------------------------------------------
                                                                            
Deep masted coil tubing rigs                        5          -     Q1(2), 
                                                                   Q2, Q3(2)
Conventional deep coil tubing rig                   1         Q4          - 
Intermediate to deep coil tubing rig                                        
 conversion                                         1          -         Q2 
Fluid pumpers - 1,000 HP quintiplex                 2       Q4(2)         - 
Nitrogen pumpers - Low-rate                         4       Q4(4)         - 
Double service rigs - Custom built, mobile                                  
 free standing, all-period (purpose-built                                   
 for SAGD wells)                                    2          -       Q1(2)
----------------------------------------------------------------------------

Essential classifies its equipment expenditures as growth capital(1), maintenance capital(1), and infrastructure capital(1). The latter category includes information systems, operational facilities and leasehold improvements. Comparative equipment expenditures are as follows:


                                     Three months ended    Nine months ended
                                          September 30,        September 30,
(Thousands)                              2012      2011       2012      2011
----------------------------------------------------------------------------
  Growth capital(1)                 $   6,285 $   8,717  $  21,918 $  20,982
  Maintenance capital(1)                4,271     7,194     10,823    11,325
  Infrastructure capital(1)               207       114      1,033     1,194
----------------------------------------------------------------------------
Total equipment expenditures        $  10,763 $  16,025  $  33,774 $  33,501
----------------------------------------------------------------------------

OUTLOOK

So far in the fourth quarter, there has been some improvement in activity and there is an expectation of continued improvement heading into the winter drilling season. However, oil prices continue to be volatile and there is still uncertainty in the market. Management expects greater clarity as E&P companies begin to set their 2013 capital budgets, which typically occurs in the latter part of the fourth quarter.

Essential is a leading well service provider in the WCSB with a strong balance sheet and high demand services which are focused on meeting its customers' needs. With an expectation of ongoing increases in horizontal well completions, there is a growing need for horizontal workovers and production work. Essential's fleet and expertise in providing these services gives it a strong position for the future.

QUARTERLY DIVIDEND

The cash dividend for the period October 1, 2012 to December 31, 2012 has been set at $0.025 per share. The dividend will be paid on January 15, 2013 to shareholders of record on December 31, 2012. The ex-dividend date is December 27, 2012.

The third quarter Management's Discussion and Analysis and Financial Statements are available on Essential's website at www.essentialenergy.ca and on SEDAR at www.sedar.com.

SUMMARY OF QUARTERLY DATA


($Thousands, except per           Sep 30,   June 30,     Mar 31,    Dec 31, 
share amounts)                       2012       2012        2012       2011 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Well servicing:                                                             
  Coil well service                33,857     18,697      42,414     43,945 
  Service rigs                     17,465     12,815      29,938     25,060 
  Other                             5,849      3,818      10,579      7,735 
----------------------------------------------------------------------------
Total well servicing               57,171     35,330      82,931     76,740 
                                                                            
Downhole tools & rentals(i)        26,342     15,540      35,251     32,115 
                                                                            
Colombia                            1,383      1,463       1,398      2,048 
----------------------------------------------------------------------------
Total revenue                      84,896     52,333     119,580    110,903 
----------------------------------------------------------------------------
Gross margin(1)                    22,979      3,667      36,504     35,758 
  Gross margin %(1)                    27%         7%         31%        32%
                                                                            
EBITDA(1)                          19,062       (479)     32,352     31,829 
  EBITDA %(1)                          22%        (1)%        27%        29%
                                                                            
Net income (loss) attributable                                              
 to shareholders of Essential       8,660     (5,923)     18,893     17,559 
  Per share - basic and diluted $    0.07  $   (0.05)  $    0.15  $    0.14 
                                                                            
Total assets                      415,653    393,377     430,674    421,500 
Total long-term debt               50,474     41,198      57,238     63,486 
Equity attributable to                                                      
 shareholders of Essential        304,312    297,937     306,372    288,828 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Utilization (ii)                                                            
  Coil tubing rigs - deep              79%        32%        102%       111%
  Coil tubing rigs - other             15%         7%         25%        30%
  Service rigs                         45%        34%         68%        59%
  Hybrid drilling rigs                 33%        11%         60%        47%
                                                                            
Operating Hours                                                             
  Coil tubing rigs - deep          18,301      7,262      23,236     23,524 
  Coil tubing rigs - other          2,819      1,596       5,494      6,778 
  Service rigs                     22,632     16,183      35,188     31,005 
  Hybrid drilling rigs              3,620      1,230       6,581      5,192 
                                                                            
Number of Tryton MSFS jobs             89         35          86         69 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Equipment fleet (iii)                                                       
Canada                                                                      
-------------------------------                                             
  Coil tubing rigs - deep              26         25          25         25 
  Coil tubing rigs - other             19         20          24         24 
  Service rigs                         55         53          58         57 
  Nitrogen pumpers                     10         10          10         10 
  Fluid pumpers                        16         16          15         15 
  Hybrid drilling rigs                  5          5           5          5 
  Rod rigs                             14         14          14         14 
Colombia                                                                    
-------------------------------                                             
  Coil tubing rigs                      2          2           2          2 
  Service rigs                          2          2           2          2 
  Nitrogen pumpers                      2          2           2          2 
  Rod rigs                              2          3           3          3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Revenue for Downhole Tools & Rentals included revenue from Essential's  
 wireline fleet until it was disposed of on February 2, 2012.               
(ii) Utilization is calculated using a 10 hour day for the entire fleet     
 except for hybrid drilling rigs which is calculated using a 24 hour day.   
(iii) Fleet data represents the number of units at the end of the period.   

($Thousands, except per            Sep 30,    Jun 30,    Mar 31,    Dec 31, 
share amounts)                        2011       2011       2011       2010 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Well servicing:                                                             
  Coil well service                 36,349      9,871     14,131     11,373 
  Service rigs                      20,969      9,606     23,873     17,747 
  Other                              7,148      3,526      2,206      2,457 
----------------------------------------------------------------------------
Total well servicing                64,466     23,003     40,210     31,577 
                                                                            
Downhole tools & rentals(i)         33,316     17,115     26,206     22,366 
                                                                            
Colombia                             1,634        361          -          - 
----------------------------------------------------------------------------
Total revenue                       99,416     40,479     66,416     53,943 
----------------------------------------------------------------------------
Gross margin(1)                     31,100      3,077     16,652     14,636 
  Gross margin %(1)                     31%         8%        25%        27%
                                                                            
EBITDA(1)                           27,293       (137)    13,401     11,293 
  EBITDA %(1)                           27%         0%        20%        21%
                                                                            
Net income (loss) attributable                                              
 to shareholders of Essential       13,678     (6,364)     6,248      6,121 
  Per share - basic and diluted  $    0.11  $   (0.07) $    0.09  $    0.09 
                                                                            
Total assets                       411,204    371,017    191,046    173,803 
Total long-term debt                79,230     63,459      7,392        396 
Equity attributable to                                                      
 shareholders of Essential         271,681    257,119    156,408    149,660 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Utilization (ii)                                                            
  Coil tubing rigs - deep              104%        37%        85%        81%
  Coil tubing rigs - other              25%        18%        34%        35%
  Service rigs                          54%        27%        64%        51%
  Hybrid drilling rigs                  48%        47%         -          - 
                                                                            
Operating Hours                                                             
  Coil tubing rigs - deep           21,938      3,638      4,575      3,740 
  Coil tubing rigs - other           5,813      3,805      7,033      8,704 
  Service rigs                      28,201     13,229     28,710     24,072 
  Hybrid drilling rigs               5,337      1,696          -          - 
                                                                            
Number of Tryton MSFS jobs              85         36         46         41 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Equipment fleet (iii)                                                       
Canada                                                                      
-------------------------------                                             
  Coil tubing rigs - deep               23         23          6          5 
  Coil tubing rigs - other              25         25         26         27 
  Service rigs                          57         58         52         51 
  Nitrogen pumpers                       9          8          8          9 
  Fluid pumpers                         12          6          -          - 
  Hybrid drilling rigs                   5          5          -          - 
  Rod rigs                              14         14         20         20 
Colombia                                                                    
-------------------------------                                             
  Coil tubing rigs                       2          2          2          1 
  Service rigs                           1          1          1          1 
  Nitrogen pumpers                       2          2          2          1 
  Rod rigs                               3          3          3          3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Revenue for Downhole Tools & Rentals included revenue from Essential's  
 wireline fleet until it was disposed of on February 2, 2012.               
(ii) Utilization is calculated using a 10 hour day for the entire fleet     
 except for hybrid drilling rigs which is calculated using a 24 hour day.   
(iii) Fleet data represents the number of units at the end of the period.   

ESSENTIAL ENERGY SERVICES LTD.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited)


                                                       As at           As at
                                               September 30,    December 31,
(Thousands)                                             2012            2011
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
Current                                                                     
  Cash                                             $       -       $     164
  Trade and other receivables                         69,362          85,013
  Inventories                                         19,673          17,819
  Prepayments                                          3,902           2,929
----------------------------------------------------------------------------
                                                      92,937         105,925
----------------------------------------------------------------------------
                                                                            
Non-current                                                                 
  Property and equipment                             222,970         211,764
  Intangible assets                                   40,530          44,750
  Goodwill                                            57,425          57,425
  Deferred tax assets                                  1,791           1,636
----------------------------------------------------------------------------
                                                     322,716         315,575
----------------------------------------------------------------------------
                                                                            
Total assets                                       $ 415,653       $ 421,500
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities                                                                 
Current                                                                     
  Bank indebtedness                                $   1,457       $       -
  Trade and other payables                            28,513          39,913
  Dividends payable                                    3,100               -
  Income taxes payable                                     -           5,234
  Current portion of long-term debt                        -          14,513
  Current portion of equity taxes                        110             117
----------------------------------------------------------------------------
                                                      33,180          59,777
----------------------------------------------------------------------------
                                                                            
Non-current                                                                 
  Long-term debt                                      50,474          48,973
  Equity taxes                                           110             232
  Deferred tax liabilities                            27,525          23,615
----------------------------------------------------------------------------
                                                      78,109          72,820
----------------------------------------------------------------------------
                                                                            
Total liabilities                                    111,289         132,597
----------------------------------------------------------------------------
                                                                            
Equity                                                                      
  Share capital                                      258,749         257,775
  Retained earnings                                   40,987          28,651
  Other reserves                                       4,576           2,402
----------------------------------------------------------------------------
  Equity attributable to shareholders of                                    
   Essential                                         304,312         288,828
                                                                            
Non-controlling interest                                  52              75
----------------------------------------------------------------------------
Total equity                                         304,364         288,903
----------------------------------------------------------------------------
                                                                            
Total liabilities and equity                       $ 415,653       $ 421,500
----------------------------------------------------------------------------
----------------------------------------------------------------------------

ESSENTIAL ENERGY SERVICES LTD.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(unaudited)


                                        For the three          For the nine 
                                         months ended          months ended 
                                        September 30,         September 30, 
(Thousands, except per share                                                
 amounts)                              2012      2011       2012       2011 
----------------------------------------------------------------------------
                                                                            
Revenue                           $  84,896 $  99,416  $ 256,809  $ 206,311 
Operating expenses                   61,917    68,316    193,659    155,482 
----------------------------------------------------------------------------
Gross margin                         22,979    31,100     63,150     50,829 
General and administrative                                                  
 expenses                             3,917     3,807     12,215     10,272 
----------------------------------------------------------------------------
                                     19,062    27,293     50,935     40,557 
                                                                            
Depreciation and amortization         6,451     6,492     19,845     14,047 
Share-based compensation                492       374      1,427      1,088 
Equity taxes                              -         -          -        478 
Other (income) expense                  123       266     (1,020)     1,494 
----------------------------------------------------------------------------
Operating profit                     11,996    20,161     30,683     23,450 
                                                                            
Transaction costs                         -       608          -      3,004 
Finance costs                           497       822      1,702      1,314 
----------------------------------------------------------------------------
Earnings before income taxes         11,499    18,731     28,981     19,132 
----------------------------------------------------------------------------
                                                                            
Income taxes                                                                
  Current expense                     1,624     3,012      4,092      3,251 
  Deferred expense                    1,159     2,102      3,449      2,619 
----------------------------------------------------------------------------
Total income tax expense              2,783     5,114      7,541      5,870 
----------------------------------------------------------------------------
                                                                            
Net income                            8,716    13,617     21,440     13,262 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Other comprehensive income:                                                 
  Unrealized foreign exchange                                               
   gain on foreign operations           197       316      1,204        660 
----------------------------------------------------------------------------
                                                                            
Comprehensive income              $   8,913 $  13,933  $  22,644  $  13,922 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Net income (loss) attributable                                              
 to:                                                                        
  Shareholders of Essential       $   8,660 $  13,678  $  21,631  $  13,563 
  Non-controlling interest               56       (61)      (191)      (301)
----------------------------------------------------------------------------
                                  $   8,716 $  13,617  $  21,440  $  13,262 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Comprehensive income (loss)                                                 
 attributable to:                                                           
  Shareholders of Essential       $   8,826 $  13,930  $  22,672  $  14,124 
  Non-controlling interest               87         3        (28)      (202)
----------------------------------------------------------------------------
                                  $   8,913 $  13,933  $  22,644  $  13,922 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share                                                          
  Basic and diluted, attributable                                           
   to shareholders of Essential   $    0.07 $    0.11  $    0.17  $    0.14 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

ESSENTIAL ENERGY SERVICES LTD.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)


                                                  For the nine months ended 
                                                              September 30, 
(Thousands)                                             2012           2011 
----------------------------------------------------------------------------
                                                                            
Operating activities:                                                       
Net income                                        $   21,440     $   13,262 
                                                                            
Non-cash adjustments to reconcile                                           
net income to net cash flow:                                                
  Depreciation and amortization                       19,845         14,047 
  Deferred income tax expense                          3,449          2,619 
  Share-based compensation                             1,427          1,088 
  Provision for (recovery of) impairment of trade                           
   receivables                                          (237)           341 
  Finance costs                                        1,702          1,314 
  (Gain) loss on disposal of assets                     (414)         1,913 
----------------------------------------------------------------------------
Operating cash flow before changes in working                               
 capital                                              47,212         34,584 
Changes in working capital:                                                 
  (Increase) decrease in trade and other                                    
   receivables before provision                       18,063        (26,221)
  (Increase) in inventories                           (1,854)        (1,840)
  (Increase) in prepayments                             (973)          (963)
  Increase (decrease) in income taxes payable         (6,804)         2,856 
  (Decrease) in trade and other accounts payables    (11,400)        (4,532)
  Increase (decrease) in equity taxes payable           (129)           402 
----------------------------------------------------------------------------
Net cash flows from operating activities              44,115          4,286 
----------------------------------------------------------------------------
                                                                            
Investing activities:                                                       
  Purchase of property and equipment                 (33,774)       (33,501)
  Business acquisition                                     -        (56,582)
  Proceeds on disposal of equipment                    8,284          2,929 
----------------------------------------------------------------------------
Net cash flows used in investing activities          (25,490)       (87,154)
----------------------------------------------------------------------------
                                                                            
Financing activities:                                                       
  Increase (decrease) in long-term debt              (13,012)        78,608 
  Dividends paid                                      (6,190)             - 
  Issuance of share capital, net of costs                685            261 
  Finance costs                                       (1,702)        (1,314)
----------------------------------------------------------------------------
Net cash flows from (used in) financing                                     
 activities                                          (20,219)        77,555 
----------------------------------------------------------------------------
                                                                            
Foreign exchange gain on cash held in a foreign                             
 currency                                                (27)           (11)
----------------------------------------------------------------------------
                                                                            
Change in cash                                        (1,621)        (5,324)
Cash, beginning of period                                164          2,392 
----------------------------------------------------------------------------
Bank indebtedness, end of period                  $   (1,457)    $   (2,932)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Supplemental cash flow information                                          
  Cash taxes paid                                 $   10,906     $      395 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) Non-IFRS Measures

Throughout this news release, certain terms that are not specifically defined in IFRS are used to analyze Essential's operations. In addition to the primary measures of net earnings and net earnings per share in accordance with IFRS, Essential believes that certain measures not recognized under IFRS assist both Essential and the reader in assessing performance and understanding Essential's results. Each of these measures provides the reader with additional insight into Essential's ability to fund principal debt repayments and capital programs. As a result, the method of calculation may not be comparable with other companies. These measures should not be considered alternatives to net earnings and net earnings per share as calculated in accordance with IFRS.

Gross margin % - This measure is considered a primary indicator of operating performance as calculated by gross margin divided by revenue.

EBITDA (Earnings before finance costs, income taxes, equity taxes, depreciation, amortization, transaction costs, non-controlling interest earnings, losses or gains on disposal of equipment and share-based compensation) - This measure is considered an indicator of Essential's ability to generate funds flow in order to fund required working capital, service debt and fund capital programs.

EBITDA % - This measure is considered an indicator of Essential's ability to generate funds flow as calculated by EBITDA divided by revenue.

Funds flow or funds flow from operations - This measure is an indicator of Essential's ability to generate funds flow in order to fund working capital, principal debt repayments and capital programs. Funds flow or funds flow from operations is defined as cash flow from operations before changes in non-cash operating working capital. This measure is useful in assessing Essential's operational cash flow as it provides cash generated in the period excluding the timing of non-cash operating working capital. This reflects the ability of the operations of Essential to meet the above noted funding requirements.

Growth capital - Growth capital is capital spending which is intended to result in incremental increases in revenue. Growth capital is considered to be a key measure as it represents the total expenditures on equipment expected to add incremental revenues and funds flow to Essential.

Maintenance capital - Equipment additions that are incurred in order to refurbish or replace previously acquired equipment less proceeds on the disposal of retired equipment. Such additions do not provide incremental increases in revenue. Maintenance capital is a key component in understanding the sustainability of Essential's business as cash resources retained within Essential must be sufficient to meet maintenance capital needs to replenish the assets for future cash generation.

Infrastructure capital - Additions that are incurred in order to maintain the Company's business systems and operating facilities. Such additions do not provide incremental increases in revenue.

Net equipment expenditures - This measure is equipment expenditures less proceeds on the disposal of equipment. Essential uses net equipment expenditures to assess net cash flows related to the financing of Essential's oilfield services equipment.

ABOUT ESSENTIAL

Essential is a growth-oriented, dividend paying corporation that provides oilfield services to oil and gas producers in western Canada for servicing producing wells and new drilling activity. Essential operates the largest coil tubing well service fleet in Canada with 47 coil tubing rigs and a fleet of 57 service rigs. Essential also sells, rents and services downhole tools and equipment including the Tryton Multi-Stage Fracturing System. Further information can be found at www.essentialenergy.ca.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. 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. In particular, this news release contains forward-looking statements including expectations regarding capital spending, in-service timing of new equipment, expectations regarding the impact of recent equipment purchases, expectations of future cash flow and earnings, expectations with respect to the demand for and price of oil and liquids-rich natural gas, expectations regarding the level and type of drilling activity, completion activity, workover activity, production activity and required oilfield services in the WCSB, expectations for continued improvement in activity heading into the winter drilling season, expectations regarding the demand for Essential's services, expectations regarding the ability to absorb labour costs in the first quarter of 2013, expectations regarding the business, operations and revenues of the Company in addition to general economic conditions, expectations regarding Essential's ability to meet the changing needs of the WCSB market, expectations regarding the capital spending plans of E&P companies, expectations for Essential's positioning for the future and expectations regarding demand for Essential's services in Colombia.

Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that such statements and information 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. These include, but are not limited to: the risks associated with the oilfield services sector (e.g. demand, pricing and terms for oilfield services; current and expected oil and natural gas prices; exploration and development costs and delays; reserves discovery and decline rates; pipeline and transportation capacity; weather, health, safety and environmental risks); integration of acquisitions, competition, and uncertainties resulting from potential delays or changes in plans with respect to acquisitions, development projects or capital expenditures and changes in legislation, including but not limited to tax laws, royalties, incentive programs and environmental regulations; stock market volatility and the inability to access sufficient capital from external and internal sources; the ability of the Company's subsidiaries to enforce legal rights in foreign jurisdictions; general economic, market or business conditions; global economic events; changes to Essential's financial position and cash flow; the availability of qualified personnel, management or other key inputs; currency exchange fluctuations; changes in political and security stability; risks associated with government regulations and environmental health and safety matters and other unforeseen conditions which could impact the use of equipment and services supplied by Essential in Colombia; and other unforeseen conditions which could impact the use of services supplied by the Company. Accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive.

Additional information on these and other factors that could affect the Company's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) for the Company. The forward-looking statements and information contained in this news release are made as of the date hereof and the Company 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.

THIRD QUARTER 2012 EARNINGS CONFERENCE CALL AND WEBCAST

Essential has scheduled a conference call and webcast to begin at 10:00 am MT (12:00 pm ET) on Thursday, November 8, 2012.

The conference call dial in numbers are 416-340-8061 or 866-225-0198

A live webcast of the conference call will be accessible on Essential's website at www.essentialenergy.ca by selecting "Investors", then "Events and Presentations". Shortly after the live webcast, an archived version will be available for approximately 30 days. An archived recording of the conference call will be available approximately one hour after the completion of the call until December 8, 2012 by dialing 905-694-9451 or 800-408-3053, passcode 9994629.

The TSX has neither approved nor disapproved the contents of this news release.

Contacts:
Essential Energy Services Ltd.
Garnet K. Amundson
President and CEO
(403) 513-7272
service@essentialenergy.ca

Essential Energy Services Ltd.
Jeff B. Newman
Chief Financial Officer
(403) 513-7272
service@essentialenergy.ca

Essential Energy Services Ltd.
Karen Perasalo
Investor Relations
(403) 513-7272
service@essentialenergy.ca
www.essentialenergy.ca

About Marketwired .
Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest AJAXWorld RIA Stories
SYS-CON Events announced today that AgilePoint, the leading provider of Microsoft-centric Business Process Management software, will exhibit at SYS-CON's 2nd International @ThingsExpo which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, will describe an IoT-spe...
SYS-CON Events announces a new pavilion on the Cloud Expo floor where WebRTC converges with the Internet of Things. Pavilion will showcase WebRTC and the Internet of Things. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation ...
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups ...
DevOps, Cloud and Your SDLC Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading i...
Subscribe to the World's Most Powerful Newsletters
Subscribe to Our Rss Feeds & Get Your SYS-CON News Live!
Click to Add our RSS Feeds to the Service of Your Choice:
Google Reader or Homepage Add to My Yahoo! Subscribe with Bloglines Subscribe in NewsGator Online
myFeedster Add to My AOL Subscribe in Rojo Add 'Hugg' to Newsburst from CNET News.com Kinja Digest View Additional SYS-CON Feeds
Publish Your Article! Please send it to editorial(at)sys-con.com!

Advertise on this site! Contact advertising(at)sys-con.com! 201 802-3021


SYS-CON Featured Whitepapers
ADS BY GOOGLE