Total Energy Services Inc. Announces Q4 2023 Results

- TSX News
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CALGARY, Alberta, March 07, 2024 (GLOBE NEWSWIRE) — Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months and year ended December 31, 2023.

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

  Three months ended
December 31		   Year ended
December 31
    2023     2022 Change       2023   2022 Change  
Revenue $ 213,758   $ 211,479 1 %   $ 892,396 $ 759,813 17 %
Operating income   23,510     15,605 51 %     84,622   49,343 71 %
EBITDA(1)   45,276     35,872 26 %     168,961   131,320 29 %
Cashflow   44,457     38,590 15 %     163,321   130,795 25 %
Net income (loss)   (7,861 )   12,264 nm     41,594   37,999 9 %
Attributable to shareholders   (7,847 )   12,244 nm     41,625   38,008 10 %
                       
Per Share Data (Diluted)                      
EBITDA(1) $ 1.11   $ 0.84 32 %   $ 4.11 $ 3.06 34 %
Cashflow $ 1.09   $ 0.91 20 %   $ 3.97 $ 3.04 31 %
                       
Attributable to shareholders:                      
Net income (loss) $ (0.19 ) $ 0.29 nm   $ 1.01 $ 0.88 15 %
                       
Common shares (000’s)(4)                      
Basic   39,975     41,652 (4 %)     40,409   42,216 (4 %)
Diluted   40,623     42,524 (4 %)     41,147   42,980 (4 %)
                       
                December 31   December 31  
Financial Position at               2023   2022 Change
Total Assets             $ 861,658 $ 878,615 (2 %)
Long-Term Debt and Lease Liabilities (excluding current portion) 100,834   127,628 (21 %)
Working Capital(2)               123,439   112,154 10 %
Net Debt(3)               –   15,474 (100 %)
Shareholders’ Equity               530,758   522,023 2 %
                       

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 fourth quarter and year ended December 31, 2023 reflect continued stable industry conditions. North American market share gains resulting from equipment upgrades and modestly improved pricing contributed to improved fourth quarter results in 2023 as compared to 2022. Fourth quarter Australian revenue was lower compared to the prior year due to lower service rig activity. $16.2 million of non-recurring income tax expense and $10.6 million of related interest and penalties were recorded in the fourth quarter of 2023 as a result of a Tax Court of Canada ruling upholding Canada Revenue Agency reassessments related to the Company’s 2009 income trust conversion. Despite the $26.8 million reduction in net income resulting from this reassessment, Total Energy achieved record consolidated financial results for 2023.

Contract Drilling Services (“CDS”)

    Three months ended
December 31		   Year ended
December 31
    2023     2022   Change     2023     2022   Change  
Revenue $ 74,700   $ 69,185   8 % $ 287,333   $ 252,663   14 %
EBITDA(1) $ 23,880   $ 17,976   33 % $ 75,710   $ 60,002   26 %
EBITDA(1) as a % of revenue   32 %   26 % 23 %   26 %   24 % 8 %
Operating days(2)   2,588     2,600   –     10,311     10,485   (2 %)
Canada   1,890     1,588   19 %   6,913     6,263   10 %
United States   356     689   (48 %)   2,052     2,734   (25 %)
Australia   342     323   6 %   1,346     1,488   (10 %)
Revenue per operating day(2), dollars $ 28,864   $ 26,610   8 % $ 27,867   $ 24,098   16 %
Canada   27,162     24,751   10 %   26,076     22,369   17 %
United States   30,483     28,270   8 %   28,700     25,126   14 %
Australia   36,582     32,207   14 %   35,791     29,484   21 %
Utilization   30 %   30 % –     30 %   30 % –  
Canada   27 %   22 % 23 %   25 %   22 % 14 %
United States   32 %   58 % (45 %)   47 %   58 % (19 %)
Australia   74 %   70 % 6 %   74 %   82 % (10 %)
Rigs, average for period   94     94   –     94     94   –  
Canada   77     76   1 %   77     76   1 %
United States   12     13   (8 %)   12     13   (8 %)
Australia   5     5   –     5     5   –  
(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.
   

CDS segment revenue during the fourth quarter of 2023 was higher compared with the previous year quarter due to increased revenue per operating day arising from the deployment of upgraded equipment. Negatively impacting utilization in the United States was the transfer of a triple drilling rig to Canada during the second quarter of 2023 and a general slowdown in industry activity, which was partially offset by higher pricing due in part to the mix of equipment operating. Higher utilization following the return to service of an upgraded drilling rig combined with higher revenue per operating day due to rate increases arising from rig upgrades and fewer standby days due to wet weather in 2023 compared to 2022 contributed to improved year over year fourth quarter results in Australia.

Rentals and Transportation Services (“RTS”)

    Three months ended
December 31		   Year ended
December 31
    2023       2022     Change       2023       2022     Change  
Revenue $ 19,544     $ 20,043     (2 %)   $ 84,906     $ 66,954     27 %
EBITDA(1) $ 6,927     $ 6,171     12 %   $ 30,904     $ 23,361     32 %
EBITDA(1) as a % of revenue   35 %     31 %   13 %     36 %     35 %   3 %
Revenue per utilized piece of equipment, dollars $ 14,139     $ 12,483     13 %   $ 55,041     $ 44,376     24 %
Pieces of rental equipment   7,700       9,440     (18 %)     7,700       9,440     (18 %)
Canada   6,790       8,540     (20 %)     6,790       8,540     (20 %)
United States   910       900     1 %     910       900     1 %
Rental equipment utilization   18 %     18 %   –      18 %     16 %   13 %
Canada   16 %     16 %   –      16 %     15 %   7 %
United States   33 %     33 %   –      35 %     29 %   21 %
Heavy trucks   67       71     (6 %)     67       71     (6 %)
Canada   46       48     (4 %)     46       48     (4 %)
United States   21       23     (9 %)     21       23     (9 %)
(1) See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
   

Fourth quarter revenue in the RTS segment decreased marginally as compared to the same period in 2022 due to the deferral of certain projects in Canada that was partially offset by market share gains in the United States. Higher year over year fourth quarter EBITDA and EBITDA margin was due to improved revenue per utilized piece of equipment. A significant number of underutilized rental pieces were disposed of in Canada during 2023.

Compression and Process Services (“CPS”)

    Three months ended
December 31		   Year ended
December 31
    2023       2022     Change       2023       2022     Change  
Revenue $ 95,439     $ 93,668     2 %   $ 417,646     $ 331,669     26 %
EBITDA(1) $ 14,074     $ 10,771     31 %   $ 53,817     $ 36,933     46 %
EBITDA(1) as a % of revenue   15 %     11 %   36 %     13 %     11 %   18 %
Horsepower of equipment on rent at period end   39,496       41,243     (4 %)     39,496       41,243     (4 %)
Canada   13,856       18,768     (26 %)     13,856       18,768     (26 %)
United States   25,640       22,475     14 %     25,640       22,475     14 %
Rental equipment utilization during the period (HP)(2)   67 %     75 %   (11 %)     73 %     61 %   20 %
Canada   76 %     66 %   15 %     77 %     47 %   64 %
United States   61 %     84 %   (27 %)     70 %     79 %   (11 %)
Sales backlog at period end, $ million $ 162.8     $ 219.5     (26 %)   $ 162.8     $ 219.5     (26 %)
(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.
   

The year over year increase in the CPS segment’s fourth quarter revenue was due primarily to higher United States fabrication sales, increased equipment overhaul activity and improved utilization of the Canadian compression rental fleet. EBITDA and EBITDA margin increased due to improved fabrication sales margins and a greater relative revenue contribution from the higher margin parts and service business. The fabrication sales backlog decreased to $162.8 million compared to the $219.5 million backlog at December 31, 2022. Sequentially, the quarter end backlog increased by $9.9 million from September 30, 2023.

Well Servicing (“WS”)

    Three months ended
December 31		   Year ended
December 31
    2023       2022     Change       2023       2022     Change  
Revenue $ 24,075     $ 28,583     (16 %)   $ 102,511     $ 108,527     (6 %)
EBITDA (1) $ 3,997     $ 6,222     (36 %)   $ 19,833     $ 23,395     (15 %)
EBITDA (1) as a % of revenue   17 %     22 %   (23 %)     19 %     22 %   (14 %)
Service hours(2)   24,631       29,566     (17 %)     106,551       117,306     (9 %)
Canada   13,293       14,460     (8 %)     52,281       57,123     (8 %)
United States   4,707       5,374     (12 %)     23,488       19,157     23 %
Australia   6,631       9,732     (32 %)     30,782       41,026     (25 %)
Revenue per service hour(2), dollars $ 977     $ 967     1 %   $ 962     $ 925     4 %
Canada   931       960     (3 %)     949       918     3 %
United States   924       955     (3 %)     969       899     8 %
Australia   1,109       983     13 %     980       948     3 %
Utilization(3)   29 %     33 %   (13 %)     31 %     32 %   (3 %)
Canada   26 %     28 %   (7 %)     26 %     27 %   (4 %)
United States   47 %     53 %   (11 %)     59 %     48 %   23 %
Australia   25 %     37 %   (32 %)     29 %     39 %   (26 %)
Rigs, average for period   79       79     –       79       79     –  
Canada   56       56     –       56       56     –  
United States   11       11     –       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.
   

Fourth quarter Canadian activity in the WS segment was negatively impacted by reduced well abandonment activity following the conclusion of government incentive programs. Segment EBITDA for the fourth quarter decreased as compared to 2022 due to lower activity in all jurisdictions and competitive North American pricing that was partially offset by increased pricing in Australia.

Corporate

During the fourth quarter of 2023, Total Energy remained focused on the safe and efficient operation of its business and the execution of its 2023 capital expenditure program in preparation for the upcoming North American winter drilling season. $75.2 million of capital expenditures were made to December 31, 2023, with $14.2 million of 2023 capital expenditure commitments carried forward into 2024.

Total Energy exited the fourth quarter of 2023 with $123.4 million of positive working capital, including $47.9 million of cash, and $125 million of available credit under its $175 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at December 31, 2023 was 5.25%.

Outlook

Industry conditions remain relatively stable. Oil and natural gas producers continue to be measured in their drilling and completion programs as they pursue acquisition opportunities and execute shareholder return strategies. While recent North American natural gas spot market price weakness may adversely impact near term natural gas drilling activity, the pending completion of several LNG export facilities is expected to provide relief to the North American natural gas market.

Total Energy’s previously announced 2024 preliminary capital expenditure budget of $46.5 million includes $22.4 million of growth capital. Included in 2024 growth capital is the recertification and upgrade of three Australian service rigs that are being reactivated under long term contracts. The first rig was completed and commenced operations in late February and the remaining two rigs are expected to be completed and commence operations during the second and third quarters of 2024, respectively. Included in 2023 capital expenditure commitments carried into 2024 is the completion of an Australian drilling rig that is expected to commence operations in July 2024 under a long term contract as well as several natural gas compression rental units being constructed for deployment in the United States under long term contracts.

Total Energy’s wholly owned subsidiary, Savanna Energy Services Australia Pty Ltd. (“Savanna Australia”) today completed the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”). US $34.8 million cash was paid at closing, with an additional US $2.0 million less any applicable post-closing deductions to be paid on the first anniversary of closing. Concurrent with the acquisition of Saxon, Muhammad Yasir Nisar was appointed Assistant Vice President, Drilling Services of Total Energy.

Dividend Increase

The Board of Directors of Total Energy has declared a dividend of $0.09 per common share for the quarter ended March 31, 2024, a 13% increase from the fourth quarter 2023 dividend. The dividend is payable on April 15, 2024 to shareholders of record at the close of business on March 29, 2024. The ex-dividend date is March 28, 2024. Unless otherwise indicated, all dividends declared by the Company are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).

Conference Call

At 9:00 a.m. (Mountain Time) on March 8, 2024 Total Energy will conduct a conference call and webcast to discuss its fourth 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 (800) 319-4610 or (416) 915-3239. 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 April 8, 2024 by dialing (855) 669-9658 (passcode 0705).

Selected Financial Information

Selected financial information relating to the three months and year ended December 31, 2023 and 2022 is included in this news release. This information should be read in conjunction with the 2023 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)
(audited)

    December 31   December 31
      2023       2022  
         
Assets        
Current assets:        
Cash and cash equivalents   $ 47,935     $ 34,061  
Accounts receivable     137,604       154,581  
Inventory     98,179       91,614  
Prepaid expenses and deposits     16,735       18,847  
Income taxes receivable     –       496  
Current portion of lease asset     –       378  
      300,453       299,977  
         
Property, plant and equipment     557,152       567,515  
Income taxes receivable     –       7,070  
Goodwill     4,053       4,053  
    $ 861,658     $ 878,615  
         
Liabilities & Shareholders’ Equity        
Current liabilities:        
Accounts payable and accrued liabilities   $ 116,794     $ 114,274  
Deferred revenue     39,321       63,895  
Income taxes payable     9,771       –  
Dividends payable     3,198       2,490  
Current portion of lease liabilities     5,880       5,173  
Current portion of long-term debt     2,050       1,991  
      177,014       187,823  
         
Long-term debt     90,947       117,997  
         
Lease liabilities     9,887       9,631  
         
Deferred income tax liability     53,052       41,141  
         
Shareholders’ equity:        
Share capital     251,283       261,109  
Contributed surplus     4,805       3,590  
Accumulated other comprehensive loss     (25,506 )     (17,032 )
Non-controlling interest     521       552  
Retained earnings     299,655       273,804  
      530,758       522,023  
         
    $ 861,658     $ 878,615  

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

    Three months ended
December 31		 Year ended
December 31
      2023     2022     2023     2022  
    (unaudited) (unaudited) (audited) (audited)
           
Revenue   $ 213,758     $ 211,479     $ 892,396     $ 759,813  
           
Cost of services     155,976       162,291       678,246       589,809  
Selling, general and administration     13,242       11,082       46,828       39,671  
Other expense (income)     (92 )     2,115       (300 )     1,035  
Share-based compensation     729       351       2,186       1,142  
Depreciation     20,393       20,035       80,814       78,813  
Operating income     23,510       15,605       84,622       49,343  
           
Gain on sale of property, plant and equipment     1,373       232       3,525       3,164  
Finance costs, net     (12,235 )     (2,094 )     (17,425 )     (7,374 )
Net income before income taxes     12,648       13,743       70,722       45,133  
           
Current income tax expense     17,077       1,289       17,217       1,250  
Deferred income tax expense     3,432       190       11,911       5,884  
Total income tax expense     20,509       1,479       29,128       7,134  
           
Net income (loss)   $ (7,861 )   $ 12,264     $ 41,594     $ 37,999  
           
Net income (loss) attributable to:          
Shareholders of the Company   $ (7,847 )   $ 12,244     $ 41,625     $ 30,008  
Non-controlling interest     (14 )     20       (31 )     (9 )
           
Income (loss) per share          
Basic   $ (0.20 )   $ 0.29     $ 1.03     $ 0.90  
Diluted   $ (0.19 )   $ 0.29     $ 1.01     $ 0.88  
           


Consolidated Statements of Comprehensive Income (Loss)

    Three months ended
December 31		 Year ended
December 31
      2023     2022     2023     2022  
    (unaudited) (unaudited) (audited) (audited)
           
Net income (loss)   $ (7,861 )   $ 12,264     $ 41,594     $ 37,999  
           
Foreign currency translation     (1,440 )     965       (8,474 )     9,672  
           
Total other comprehensive income (loss) for the period     (1,440 )     965       (8,474 )     9,672  
           
Total comprehensive income (loss)   $ (9,301 )   $ 13,229     $ 33,120     $ 47,671  
           
Total comprehensive income (loss) attributable to:          
           
Shareholders of the Company   $ (9,287 )   $ 13,209     $ 33,151     $ 47,680  
Non-controlling interest     (14 )     20       (31 )     (9 )

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

    Three months ended
December 31		 Year ended
December 31
      2023     2022     2023     2022  
    (unaudited) (unaudited) (audited) (audited)
Cash provided by (used in):          
           
Operations:          
Net income (loss) for the period   $ (7,861 )   $ 12,264     $ 41,594     $ 37,999  
Add (deduct) items not affecting cash:          
Depreciation     20,393       20,035       80,814       78,813  
Share-based compensation     729       351       2,186       1,142  
Gain on sale of property, plant and equipment     (1,373 )     (232 )     (3,525 )     (3,164 )
Finance costs, net     12,235       2,094       17,425       7,374  
Foreign currency translation     (136 )     2,115       (4,420 )     1,035  
Current income tax expense     17,077       1,289       17,217       1,250  
Deferred income tax expense     3,432       190       11,911       5,884  
Income taxes recovered (paid)     (39 )     484       119       462  
Cashflow     44,457       38,590       163,321       130,795  
Changes in non-cash working capital items:          
Accounts receivable     25,373       9,564       16,977       (64,103 )
Inventory     3,285       1,777       (6,565 )     (1,690 )
Prepaid expenses and deposits     7,319       466       2,112       (9,639 )
Accounts payable and accrued liabilities     (15,805 )     (4,543 )     (5,325 )     40,417  
Deferred revenue     (14,265 )     8,755       (24,574 )     47,621  
Cash provided by operating activities     50,364       54,609       145,946       143,401  
Investing:          
Purchase of property, plant and equipment     (15,611 )     (14,713 )     (75,242 )     (56,735 )
Proceeds on disposal of property, plant and equipment     5,106       332       11,516       6,292  
Changes in non-cash working capital items     (5,599 )     (1,373 )     (3,107 )     8,181  
Cash used in investing activities     (16,104 )     (15,754 )     (66,833 )     (42,262 )
Financing:          
Repayment of long-term debt     (10,500 )     (28,574 )     (26,991 )     (70,529 )
Repayment of lease liabilities     (1,198 )     (1,359 )     (5,912 )     (4,966 )
Dividends to shareholders     (3,198 )     (2,517 )     (12,142 )     (4,999 )
Repurchase of common shares     –       (4,491 )     (13,587 )     (12,638 )
Shares issued on exercise of share options     –       42       42       158  
Interest paid     (1,314 )     (2,198 )     (6,649 )     (7,469 )
           
Cash used in financing activities     (16,210 )     (39,097 )     (65,239 )     (100,443 )
           
Change in cash and cash equivalents     18,050       (242 )     13,874       696  
           
Cash and cash equivalents, beginning of period     29,885       34,303       34,061       33,365  
           
Cash and cash equivalents, end of period   $ 47,935     $ 34,061     $ 47,935     $ 34,061  
           


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 December 31, 2023 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate(1) Total
  Drilling Transportation and Process Servicing    
  Services Services Services      
             
Revenue $ 74,700     $ 19,544     $ 95,439     $ 24,075     $ –     $ 213,758  
             
Cost of services   47,897       10,485       78,813       18,781       –       155,976  
Selling, general and administration   3,436       2,260       3,294       1,324       2,928       13,242  
Other (income) loss   (85 )     (35 )     113       –       (85 )     (92 )
Share-based compensation   –       –       –       –       729       729  
Depreciation   9,668       5,111       2,528       2,853       233       20,393  
Operating income (loss)   13,784       1,723       10,691       1,117       (3,805 )     23,510  
             
Gain on sale of property, plant and equipment   428       93       855       27       (30 )     1,373  
Finance costs, net   (21 )     (50 )     (110 )     (23 )     (12,031 )     (12,235 )
             
Net income (loss) before income taxes   14,191       1,766       11,436       1,121       (15,866 )     12,648  
             
Goodwill   –       2,514       1,539       –       –       4,053  
Total assets   364,968       169,847       255,055       69,398       2,390       861,658  
Total liabilities   64,810       29,502       93,980       6,383       136,225       330,900  
Capital expenditures   6,282       1,446       7,669       208       6       15,611  
  Canada United States Australia Total
         
Revenue $ 116,289 $ 77,779 $ 19,690 $ 213,758
Non-current assets(2)   384,448   129,817   46,940   561,205

As at and for the three months ended December 31, 2022 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate(1) Total
  Drilling Transportation and Process Servicing    
  Services Services Services      
             
Revenue $ 69,185     $ 20,043     $ 93,668     $ 28,583     $ –     $ 211,479  
             
Cost of services   49,225       12,152       79,703       21,211       –       162,291  
Selling, general and administration   2,007       1,912       3,208       1,153       2,802       11,082  
Other income   –       –       –       –       2,115       2,115  
Share-based compensation   –       –       –       –       351       351  
Depreciation   9,138       4,868       2,618       3,165       246       20,035  
Operating income (loss)   8,815       1,111       8,139       3,054       (5,514 )     15,605  
             
Gain on sale of property, plant and equipment   23       192       14       3       –       232  
Finance costs, net   (9 )     (16 )     (124 )     (9 )     (1,936 )     (2,094 )
             
Net income (loss) before income taxes   8,829       1,287       8,029       3,048       (7,450 )     13,743  
             
Goodwill   –       2,514       1,539       –       –       4,053  
Total assets   346,870       182,095       260,019       83,628       6,003       878,615  
Total liabilities   62,545       20,292       122,320       6,003       145,432       356,592  
Capital expenditures   6,865       3,490       3,928       400       30       14,713  
  Canada United States Australia Total
         
Revenue $ 89,191 $ 97,228 $ 25,060 $ 211,479
Non-current assets(2)   373,637   146,886   51,045   571,568
(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 year ended December 31, 2023 (audited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate(1) Total
  Drilling Transportation and Process Servicing    
  Services Services Services      
             
Revenue $ 287,333     $ 84,906     $ 417,646     $ 102,511     $ –     $ 892,396  
             
Cost of services   201,363       46,210       352,079       78,594       –       678,246  
Selling, general and administration   10,988       8,634       13,416       4,448       9,342       46,828  
Other income   (65 )     (35 )     25       –       (225 )     (300 )
Share-based compensation   –       –       –       –       2,186       2,186  
Depreciation   37,775       19,731       10,350       11,944       1,014       80,814  
Operating income (loss)   37,272       10,366       41,776       7,525       (12,317 )     84,622  
             
Gain on sale of property, plant and equipment   663       807       1,691       364       –       3,525  
Finance costs, net   (65 )     (113 )     (463 )     (74 )     (16,710 )     (17,425 )
             
Net income (loss) before income taxes   37,870       11,060       43,004       7,815       (29,027 )     70,722  
             
Goodwill   –       2,514       1,539       –       –       4,053  
Total assets   364,968       169,847       255,055       69,398       2,390       861,658  
Total liabilities   64,810       29,502       93,980       6,383       136,225       330,900  
Capital expenditures   46,810       7,223       14,452       6,516       241       75,242  
  Canada United States Australia Total
         
Revenue $ 419,618 $ 381,396 $ 91,382 $ 892,396
Non-current assets(2)   384,448   129,817   46,940   561,205

As at and for the year ended December 31, 2022 (audited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing   (1)      
  Services Services Services      
             
Revenue $ 252,663     $ 66,954     $ 331,669     $ 108,527     $ –     $ 759,813  
             
Cost of services   185,579       37,713       286,259       80,258       –       589,809  
Selling, general and administration   7,374       6,902       10,071       5,130       10,194       39,671  
Other expense   –       –       –       –       1,035       1,035  
Share-based compensation   –       –       –       –       1,142       1,142  
Depreciation   35,785       19,518       9,725       12,832       953       78,813  
Operating income (loss)   23,925       2,821       25,614       10,307       (13,324 )     49,343  
             
Gain on sale of property, plant and equipment   292       1,022       1,594       256       –       3,164  
Finance costs, net   (23 )     (75 )     (412 )     (26 )     (6,838 )     (7,374 )
             
Net income (loss) before income taxes   24,194       3,768       26,796       10,537       (20,162 )     45,133  
             
Goodwill   –       2,514       1,539       –       –       4,053  
Total assets   346,870       182,095       260,019       83,628       6,003       878,615  
Total liabilities   62,545       20,292       122,320       6,003       145,432       356,592  
Capital expenditures   34,835       8,508       9,490       3,792       110       56,735  
  Canada United States Australia Total
         
Revenue $ 371,478 $ 263,751 $ 124,584 $ 759,813
Non-current assets(2)   373,637   146,886   51,045   571,568
(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: [email protected] 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 15 to the Company’s 2023 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 www.sedar.com) for a discussion of such risks and uncertainties.

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


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