Hanwei Energy Services Reports First Quarter Fiscal 2019 Financial and Operational Results
VANCOUVER, British Columbia, Aug. 08, 2018 (GLOBE NEWSWIRE) -- Hanwei Energy Services Corp. (TSX: HE) (“Hanwei” or the “Company”), today reported its financial results for the three months ended June 30, 2018. All amounts are in Canadian Dollars unless otherwise noted.
Hanwei's principal business operations are in two complementary segments of the oil and gas industry as an operator and developer of its own producing and exploratory oil and gas assets in Alberta and Manitoba and as a specialized pipe supplier to the industry, both in Canada and internationally.
Total Company revenues for the three months ended June 30, 2018 reduced to $1.6 million as compared to $3.5 million for the same period of the prior year. The $1.9 million decrease was primarily due to the timing of orders in the Company’s pipe business decreasing pipe business revenue to $1.0 million as compared to $2.8 million for the same period of the prior year.
Revenues net of royalties from the Company’s oil and gas business for the three months ended June 30, 2018 totaled approximately $0.6 million (equivalent to gross revenue of $62.49 per boe with a netback of $3.72 per boe) as compared to revenues net of royalties of approximately $0.8 million (equivalent to gross revenue of $37.09 per boe with a netback of $18.39 per boe) for the same period of the prior year. The Company produced approximately 104 boed for the three months ended June 30, 2018 as compared to 224 boed for the same period of the prior year. The Company completed a work over and drill program at its Leduc Lands with test production beginning on May 19, 2018. The decrease in production and revenues and increase in costs was due to the workover activities and costs associated with test production and commissioning. The Company expects that its field operating costs will reduce and its netback will improve once the facility upgrades are optimized. The Company has injected all produced gas at its Leduc Lands to a gas injection well such that there was no revenue for gas recorded for its Leduc Lands.
Adjusted EBITDA from continuing operations for the three months ended June 30, 2018 totalled negative $0.7 million as compared to Adjusted EBITDA of $7,000 for the same period of the prior year. The decrease in Adjusted EBITDA was due to the timing of sales in the FRP pipe business and production decreases in the oil and gas business due to the work over program at the Leduc Lands.
The Company had a loss from continuing operations of $1.0 million for the three months ended June 30, 2018 as compared to loss from continuing operations of $0.5 million for the same period of the prior year.
As of June 30, 2018 the Company had:
Cash and cash equivalents (inclusive of short term current investments) of $0.9 million representing a decrease of $0.1 million from a March 31, 2018 cash and cash equivalents balance of $1.0 million primarily due to investments in oil and gas assets in Canada;
Net Asset Value per share for the Company’s continuing operations of $0.13 (on 194,201,234 shares outstanding);
A total principal amount for all short-term loans of $6.4 million representing a 52% debt to equity ratio (total debt divided by total shareholders' equity) as compared to $5.1 million representing a 38% debt to equity ratio as at March 31, 2018.
In June 2018, the Company completed the acquisition of a further 3,120 net acres as part of its Nevis Lands for a cash consideration of some $1.1 million. The acquisition included 15 wells (100% working interest) with nominal oil production of some 20 bbld. Following this acquisition, the Nevis Lands totals some 4,800 net acres. As previously reported the Company is targeting the area for certain future work-over programs to exploit the remaining reserve to increase recovery and production.
About Hanwei Energy Services Corp.
Hanwei Energy Services Corp.’s principal business operations are in two complementary key segments of the oil and gas industry as both an equipment supplier to the industry (as a leading manufacturer of high pressure, fiberglass reinforced plastic (“FRP”) pipe products and associated technologies serving major energy customers in the global energy market) and as oil and gas producer with properties in Alberta and joint venture interests in Manitoba.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES
Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company’s Annual Information Form dated June 19, 2018 and Management Discussion and Analysis for the year ended March 31, 2018 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company’s expectations as of the date of this press release.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.
