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, 2021.

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

  Three months ended December 31   Year ended December 31
  2021 2020 Change   2021 2020 Change
Revenue $ 134,629   $ 83,472   61 %   $ 431,576   $ 365,750   18 %
Operating income (loss)   1,680     (4,013 ) nm       (1,413 )   (36,539 ) (96 %)
EBITDA (1)   22,567     19,546   15 %     86,015     81,204   6 %
Cashflow   22,144     18,431   20 %     80,191     73,437   9 %
Net income (loss)   1,036     (1,732 ) nm       (428 )   (30,455 ) (99 %)
Attributable to shareholders   1,049     (1,739 ) nm       (360 )   (30,450 ) (99 %)
                         
Per Share Data (Diluted)                        
EBITDA (1) $ 0.52   $ 0.43   21 %   $ 1.93   $ 1.80   7 %
Cashflow $ 0.51   $ 0.41   24 %   $ 1.80   $ 1.63   10 %
                         
Attributable to shareholders:                        
Net income (loss) $ 0.02   $ (0.04 ) nm     $ (0.01 ) $ (0.68 ) (99 %)
                         
Common shares (000’s)(4)                        
Basic   43,341     45,081   (4 %)     44,384     45,083   (2 %)
Diluted   43,818     45,081   (3 %)     44,673     45,083   (1 %)
                         
                December 31 December 31  
Financial Position at               2021 2020 Change
Total Assets               $ 813,522   $ 849,579   (4 %)
Long-Term Debt and Lease Liabilities (excluding current portion) 196,007     238,937   (18 %)
Working Capital (2)                 137,304     138,940   (1 %)
Net Debt (3)                 58,703     99,997   (41 %)
Shareholders’ Equity                 493,437     510,987   (3 %)
                         

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

“nm” – calculation not meaningful

Total Energy’s results for the three months ended December 31, 2021 reflect improving industry conditions in North America and Australia as compared to the fourth quarter of 2020. $1.4 million was recognized during the fourth quarter of 2021 under various COVID-19 relief programs, an 85% decrease from the $9.1 million of COVID-19 relief received in the fourth quarter of 2020.

Contract Drilling Services (“CDS”)

  Three months ended December 31   Year ended December 31
    2021     2020   Change     2021     2020   Change
Revenue $ 48,766   $ 23,288   109 %   $ 146,411   $ 96,661   51 %
EBITDA (1) $ 12,700   $ 6,275   102 %   $ 35,068   $ 19,499   80 %
EBITDA (1) as a % of revenue   26 %   27 % (4 %)     24 %   20 % 20 %
Operating days(2)   2,340     1,210   93 %     7,334     4,533   62 %
Canada   1,342     747   80 %     4,307     2,648   63 %
United States   663     286   132 %     2,041     781   161 %
Australia   335     177   89 %     986     1,104   (11 %)
Revenue per operating day(2), dollars $ 20,840   $ 19,246   8 %   $ 19,963   $ 21,324   (6 %)
Canada   18,632     15,511   20 %     16,944     16,094   5 %
United States   20,979     17,804   18 %     19,740     19,504   1 %
Australia   29,412     37,339   (21 %)     33,613     35,154   (4 %)
Utilization   27 %   13 % 108 %     21 %   12 % 75 %
Canada   19 %   10 % 90 %     15 %   9 % 67 %
United States   55 %   24 % 129 %     43 %   13 % 231 %
Australia   73 %   38 % 92 %     54 %   60 % (10 %)
Rigs, average for period   95     98   (3 %)     97     102   (5 %)
Canada   77     80   (4 %)     79     81   (2 %)
United States   13     13   -       13     16   (19 %)
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 stand-by days.

Fourth quarter 2021 drilling activity in North America and Australia continued to improve with rising oil and natural gas prices. Continued recovery of Canadian industry activity levels from the historic lows of 2020 and market share gains in the United States drove a significant year over year increase in North American operating days and increased revenue per operating day. In Australia, activity and results improved in the fourth quarter of 2021 compared to the fourth quarter of 2020 as two drilling rigs returned to service following the completion of recertifications and upgrades. Negatively impacting fourth quarter 2021 CDS segment results was $0.3 million of non-recurring equipment reactivation costs as several idle drilling rigs were put back into service. The fourth quarter EBITDA margin was slightly lower on a year over year basis primarily as a result of pricing gains not fully offsetting the impact of a significant decrease in COVID-19 relief funds and operating cost inflation.

Rentals and Transportation Services (“RTS”)

  Three months ended December 31   Year ended December 31
    2021     2020   Change     2021     2020   Change
Revenue $ 10,873   $ 6,975   56 %   $ 36,974   $ 34,529   7 %
EBITDA (1) $ 2,712   $ 2,198   23 %   $ 12,640   $ 9,473   33 %
EBITDA (1) as a % of revenue   25 %   32 % (22 %)     34 %   27 % 26 %
Revenue per utilized piece of equipment, dollars $ 8,249   $ 9,361   (12 %)   $ 33,500   $ 40,642   (18 %)
Pieces of rental equipment   9,420     10,650   (12 %)     9,420     10,650   (12 %)
Canada   8,540     9,710   (12 %)     8,540     9,710   (12 %)
United States   880     940   (6 %)     880     940   (6 %)
Rental equipment utilization   14 %   7 % 100 %     11 %   8 % 38 %
Canada   12 %   6 % 100 %     10 %   7 % 43 %
United States   30 %   13 % 131 %     19 %   19 % -  
Heavy trucks   79     87   (9 %)     79     87   (9 %)
Canada   56     62   (10 %)     56     62   (10 %)
United States   23     25   (8 %)     23     25   (8 %)

(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 increased as compared to the same period in 2020 due to higher equipment utilization in both Canada and the United States. Increased equipment utilization offset lower revenue per utilized piece and contributed to an increase in EBITDA during the fourth quarter of 2021 as compared to 2020 despite a year over year decrease in fourth quarter EBITDA margin. The year over year decrease in fourth quarter EBITDA margin was due primarily to the mix of equipment operating and equipment reactivation expenses as well as realized price increases not fully offsetting the significant year over year decrease in COVID-19 relief funds and operating cost inflation.

Compression and Process Services (“CPS”)

  Three months ended December 31   Year ended December 31
  2021   2020   Change   2021    2020   Change
Revenue $ 49,314   $ 32,767   50 %   $ 155,315   $ 136,005   14 %
EBITDA (1) $ 3,513   $ 5,068   (31 %)   $ 20,613   $ 21,906   (6 %)
EBITDA (1) as a % of revenue   7 %   15 % (53 %)     13 %   16 % (19 %)
Horsepower of equipment on rent at period end   25,755     23,700   9 %     25,755     23,700   9 %
Canada   10,930     11,150   (2 %)     10,930     11,150   (2 %)
United States   14,825     12,550   18 %     14,825     12,550   18 %
Rental equipment utilization during the period (HP)(2)   50 %   45 % 11 %     48 %   61 % (21 %)
Canada   33 %   39 % (15 %)     33 %   50 % (34 %)
United States   75 %   62 % 21 %     72 %   86 % (16 %)
Sales backlog at period end, $ million $ 147.5   $ 43.9   236 %   $ 147.5   $ 43.9   236 %

(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 fabrication sales and increased equipment overhaul activity. Compression rental fleet utilization continued to recover in the United States during the fourth quarter of 2021 but remained slightly lower in Canada on a year over year basis. Lower utilization of the rental fleet, a substantial decrease in COVID-19 relief fund receipts, costs incurred to prepare for substantially higher fabrication activity levels in 2022 and general operating cost inflation contributed to a lower EBITDA margin during the fourth quarter of 2021 as compared to 2020. The fabrication sales backlog continued to grow during the fourth quarter of 2021, increasing by another $52.0 million, or 54%, compared to the $95.5 million backlog at September 30, 2021.

Well Servicing (“WS”)

  Three months ended December 31   Year ended December 31
  2021   2020   Change   2021    2020   Change
Revenue $ 25,676   $ 20,422   26 %   $ 92,876   $ 98,555   (6 %)
EBITDA (1) $ 6,551   $ 7,055   (7 %)   $ 22,964   $ 28,126   (18 %)
EBITDA (1) as a % of revenue   26 %   35 % (26 %)     25 %   29 % (14 %)
Service hours(2)   30,525     24,333   25 %     111,585     113,428   (2 %)
Canada   16,061     13,042   23 %     56,562     42,011   35 %
United States   3,559     1,837   94 %     13,765     10,734   28 %
Australia   10,906     9,454   15 %     41,259     60,683   (32 %)
Revenue per service hour(2), dollars $ 841   $ 840   -     $ 832   $ 869   (4 %)
Canada   774     623   24 %     708     637   11 %
United States   709     695   2 %     696     727   (4 %)
Australia   983     1,167   (16 %)     1,049     1,055   (1 %)
Utilization(3)   33 %   25 % 32 %     29 %   26 % 12 %
Canada   31 %   25 % 24 %     27 %   20 % 35 %
United States   32 %   14 % 129 %     27 %   21 % 29 %
Australia   41 %   36 % 14 %     39 %   58 % (33 %)
Rigs, average for period   83     83   -       83     83   -  
Canada   57     57   -       57     57   -  
United States   12     14   (14 %)     14     14   -  
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 WS segment revenue increased in 2021 as compared to 2020 due primarily to higher activity levels in North America. Underpinning this increase was higher North American oil production activity and significant well abandonment activity in Canada. The year over year decrease in EBITDA and EBITDA margin for the three months and year ended December 31, 2021 was primarily due to a significant year over year decrease in COVID-19 relief funds, lower pricing in Australia and increased North American operating costs that were not fully offset by price increases.

Corporate

Total Energy continued to focus on the safe and efficient operation of its business and the preservation of its balance sheet strength and financial liquidity during the fourth quarter of 2021. Despite the additional health and safety challenges presented by the COVID-19 pandemic, during 2021 Total Energy recorded its lowest annual consolidated total recordable injury frequency rate since the Company began measuring consolidated performance in 2008.

During the fourth quarter of 2021 bank debt was reduced by $5.6 million, or 3%, and 987,634 common shares were repurchased under the Company’s normal course issuer bid at an average price of $5.32 (including commissions). The Company exited 2021 with $137.3 million of positive working capital, including $33.4 million of cash, and $125 million of available credit under its $255 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at December 31, 2021 was 2.68%.

Outlook

Total Energy’s diversified geographic and business exposure provided a measure of stability following the outbreak of the COVID-19 pandemic in March of 2020 and contributed to the generation of significant free cash flow during very difficult industry conditions. A substantial portion of the Company’s cash flow generated since the beginning of 2020 has been directed towards debt repayment, with bank debt (net of cash) being reduced from January 1, 2020 to December 31, 2021 by $100.8 million, or 39%. Total Energy also returned $10.0 million to shareholders during 2021 with the repurchase and cancellation of 2.1 million common shares under the Company’s normal course issuer bid.

Total Energy’s diversified business platform and efficient cost structure also provides the Company with significant leverage to recovering global energy industry activity levels, as evidenced by the Company’s return to profitability during the second half of 2021 despite only modest increases in industry activity levels. Demand for Total Energy’s products and services has continued to strengthen thus far in 2022 and at current commodity prices the Company expects activity levels will continue to improve in all business segments on a seasonally adjusted basis.

Total Energy previously announced a preliminary 2022 capital expenditure budget of $26.1 million that will be directed towards the continued expansion of the CPS segment’s parts and service and compression rental business lines as well as the maintenance and upgrade of equipment in all business segments in direct response to increasing customer demand. Total Energy expects to fund its current 2022 capital budget with cash on hand and cash flow.

On January 12, 2022 Total Energy extended the maturity of its primary bank credit facility to November 10, 2024. Given the Company’s strong liquidity position, significant reduction in bank debt since the previous extension and desire to reduce standby charges, Total Energy requested that its primary credit facility be reduced by $30 million to $220.0 million. Following an additional $20.0 million of voluntary debt repayment thus far in 2022, $115.0 million of credit is currently available on the Company’s existing $225.0 million of revolving bank credit facilities.

While commodity prices are strong, oil and gas producers have generally restrained their exploration and development activities as compared to previous periods of similar high oil and natural gas prices. In such environment, Total Energy remains focused on the safe and efficient operation of its business, debt repayment, disciplined capital deployment and improving shareholder returns, including through share repurchases under its normal course issuer bid. Subsequent to December 31, 2021 the Company has repurchased and cancelled an additional 290,000 common shares at a total cost of $1.8 million, resulting in a current outstanding share count of 42.71 million. Total Energy continues to identify and explore opportunities to leverage its equipment, technologies and expertise to pursue new business opportunities, including in the areas of alternative resource extraction, emerging energy technologies and emissions reduction and sequestration.

Conference Call

At 9:00 a.m. (Mountain Time) on March 11, 2022 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 11, 2022 by dialing (855) 669-9658 (passcode 8481).

Selected Financial Information

Selected financial information relating to the three months and year ended December 31, 2021 and 2020 is included in this news release. This information should be read in conjunction with the 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 reproduced in the Company’s 2021 Annual report.

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

      December 31,   December 31,
        2021       2020  
           
Assets          
Current assets:          
Cash and cash equivalents     $ 33,365     $ 22,996  
Accounts receivable       90,543       73,373  
Inventory       89,921       95,586  
Prepaid expenses and deposits       9,208       6,876  
Income taxes receivable       2,208       1,287  
Current portion of finance lease asset       487       566  
        225,732       200,684  
           
Property, plant and equipment       575,913       636,996  
Income taxes receivable       7,070       7,070  
Deferred income tax asset       393       57  
Lease asset       361       719  
Goodwill       4,053       4,053  
      $ 813,522     $ 849,579  
           
Liabilities & Shareholders' Equity          
Current liabilities:          
Accounts payable and accrued liabilities     $ 65,513     $ 46,410  
Deferred revenue       16,274       6,365  
Current portion of lease liabilities       4,030       6,417  
Current portion of long-term debt       2,611       2,552  
        88,428       61,744  
           
Long-term debt       187,906       230,517  
           
Lease liabilities       8,101       8,420  
           
Deferred income tax liability       35,650       37,911  
           
Shareholders' equity:          
Share capital       270,905       284,077  
Contributed surplus       5,757       4,966  
Accumulated other comprehensive loss       (26,704 )     (18,736 )
Non-controlling interest       561       629  
Retained earnings       242,918       240,051  
        493,437       510,987  
           
      $ 813,522     $ 849,579  

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

  Three months ended December 31   Year endedDecember 31
    2021     2020       2021     2020  
  (unaudited) (unaudited)   (audited) (audited)
           
Revenue $ 134,629   $ 83,472     $ 431,576   $ 365,750  
           
Cost of services   103,657     59,107       323,092     266,720  
Selling, general and administration   8,372     5,277       28,234     27,309  
Other expense (income)   448     844       (2,206 )   (5,969 )
Share-based compensation   228     176       804     866  
Depreciation   20,244     22,081       83,065     113,363  
Operating income (loss)   1,680     (4,013 )     (1,413 )   (36,539 )
           
Gain on sale of property, plant and equipment   643     1,478       4,363     4,380  
Finance costs, net   (1,583 )   (2,283 )     (6,837 )   (10,346 )
Net income (loss) before income taxes   740     (4,818 )     (3,887 )   (42,505 )
           
Current income tax (recovery) expense   (285 )   768       (862 )   3,075  
Deferred income tax recovery   (11 )   (3,854 )     (2,597 )   (15,125 )
Total income tax recovery   (296 )   (3,086 )     (3,459 )   (12,050 )
           
Net income (loss) $ 1,036   $ (1,732 )   $ (428 ) $ (30,455 )
           
Net income (loss) attributable to:          
Shareholders of the Company $ 1,049   $ (1,739 )   $ (360 ) $ (30,450 )
Non-controlling interest   (13 )   7       (68 )   (5 )
           
Income (loss) per share:          
Basic and diluted earnings per share $ 0.02   $ (0.04 )   $ (0.01 ) $ (0.68 )

Consolidated Statements of Comprehensive Income (Loss)

  Three months ended December 31   Year endedDecember 31
    2021     2020       2021     2020  
  (unaudited) (unaudited)   (audited) (audited)
           
Net income (loss) for the year $ 1,036   $ (1,732 )   $ (428 ) $ (30,455 )
           
Other Comprehensive Loss (OCI):          
           
Foreign currency translation adjustment   33     (5,052 )     (7,968 )   (2,416 )
Deferred tax effect   -     528       -     402  
Total other comprehensive income (loss) for the year   33     (4,524 )     (7,968 )   (2,014 )
           
Total comprehensive income (loss) $ 1,069   $ (6,256 )   $ (8,396 ) $ (32,469 )
           
Total comprehensive income (loss) attributable to:          
           
Shareholders of the Company $ 1,082   $ (6,263 )   $ (8,328 ) $ (32,464 )
Non-controlling interest   (13 )   7       (68 )   (5 )

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

  Three months ended December 31   Year endedDecember 31
    2021     2020       2021     2020  
  (unaudited) (unaudited)   (audited) (audited)
           
Cash provided by (used in):          
           
Operations:          
Net income (loss) for the year $ 1,036   $ (1,732 )   $ (428 ) $ (30,455 )
Add (deduct) items not affecting cash:          
Depreciation   20,244     22,081       83,065     113,363  
Share-based compensation   228     176       804     866  
Gain on sale of property, plant and equipment   (643 )   (1,478 )     (4,363 )   (4,380 )
Finance costs, net   1,583     2,283       6,837     10,346  
Unrealized loss (gain) on foreign currencies translation   448     903       (2,206 )   (5,910 )
Current income tax expense (recovery)   (285 )   768       (862 )   3,075  
Deferred income tax recovery   (11 )   (3,854 )     (2,597 )   (15,125 )
Income taxes recovered (paid)   (456 )   (716 )     (59 )   1,657  
Cashflow   22,144     18,431       80,191     73,437  
Changes in non-cash working capital items:          
Accounts receivable   (346 )   (3,569 )     (17,637 )   41,129  
Inventory   9,409     6,522       5,107     10,086  
Prepaid expenses and deposits   (462 )   (3,506 )     (2,332 )   2,386  
Accounts payable and accrued liabilities   (1,638 )   3,192       14,337     (43,398 )
Deferred revenue   (1,314 )   (1,844 )     9,909     2,482  
    27,793     19,226       89,575     86,122  
Investing:          
Purchase of property, plant and equipment   (11,753 )   (4,606 )     (28,983 )   (16,904 )
Proceeds on disposal of property, plant and equipment   1,351     468       10,507     5,936  
Changes in non-cash working capital items   3,881     238       4,223     (2,570 )
    (6,521 )   (3,900 )     (14,253 )   (13,538 )
Financing:          
Advances under long-term debt   -     -       -     29,796  
Repayment of long-term debt   (5,641 )   (10,626 )     (42,552 )   (74,590 )
Repayment of lease liabilities   (1,093 )   (1,912 )     (5,803 )   (8,266 )
Partnership distributions to non-controlling interests   -     -       -     (125 )
Payment of dividends   -     -       -     (2,710 )
Repurchase of common shares   (5,258 )   -       (10,000 )   (427 )
Shares issued on exercise of options   42     -       42     -  
Interest paid   (1,526 )   (4,645 )     (6,640 )   (13,139 )
           
    (13,476 )   (17,183 )     (64,953 )   (69,461 )
           
Change in cash and cash equivalents   7,796     (1,857 )     10,369     3,123  
           
Cash and cash equivalents, beginning of period   25,569     24,853       22,996     19,873  
           
Cash and cash equivalents, end of period $ 33,365   $ 22,996     $ 33,365   $ 22,996  

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 labour 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 labour 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, 2021 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing (1)  
  Services Services Services      
             
Revenue $ 48,766   $ 10,873   $ 49,314   $ 25,676   $ -   $ 134,629  
             
Cost of services   34,748     6,790     44,054     18,065     -     103,657  
Selling, general and administration   1,528     1,491     1,797     1,231     2,325     8,372  
Other expense   -     -     -     -     448     448  
Share-based compensation   -     -     -     -     228     228  
Depreciation (2)   9,143     5,070     2,200     3,585     246     20,244  
Operating income (loss)   3,347     (2,478 )   1,263     2,795     (3,247 )   1,680  
             
Gain (loss) on sale of property, plant and equipment   210     120     50     271     (8 )   643  
Finance costs, net   (2 )   (12 )   (65 )   (4 )   (1,500 )   (1,583 )
             
Net income (loss) before income taxes   3,555     (2,370 )   1,248     3,062     (4,755 )   740  
             
Goodwill   -     2,514     1,539     -     -     4,053  
Total assets   325,143     180,188     206,278     93,274     8,639     813,522  
Total liabilities   60,691     10,316     45,721     4,058     199,299     320,085  
Capital expenditures   7,934     883     2,714     213     9     11,753  
  Canada United States Australia Other Total
           
Revenue $ 69,488   $ 37,610   $ 27,531   $ -   $ 134,629  
Non-current assets (3)   378,519     141,552     60,256     -     580,327  

As at and for the three months ended December 31, 2020 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing   (1)    
  Services Services Services      
             
Revenue $ 23,288   $ 6,975   $ 32,767   $ 20,442   $ -   $ 83,472  
             
Cost of services   16,006     4,062     26,516     12,523     -     59,107  
Selling, general and administration   1,068     868     1,263     875     1,203     5,277  
Other expense   -     -     -     -     844     844  
Share-based compensation   -     -     -     -     176     176  
Depreciation (2)   9,822     5,651     2,481     3,957     170     22,081  
Operating income (loss)   (3,608 )   (3,606 )   2,507     3,087     (2,393 )   (4,013 )
             
Gain on sale of property, plant and equipment   61     153     80     11     1,173     1,478  
Finance costs, net   (32 )   (36 )   (85 )   (6 )   (2,124 )   (2,283 )
             
Net income (loss) before income taxes   (3,579 )   (3,489 )   2,502     3,092     (3,344 )   (4,818 )
             
Goodwill   -     2,514     1,539     -     -     4,053  
Total assets   319,075     199,793     215,533     104,743     10,435     849,579  
Total liabilities   56,557     11,022     29,229     5,899     235,885     338,592  
Capital expenditures   2,163     167     988     1,288     -     4,606  
  Canada United States Australia Other Total
           
Revenue $ 46,821   $ 18,896   $ 17,755   $ -   $ 83,472  
Non-current assets (3)   419,332     155,175     67,261     -     641,768  

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2021 Financial Statements for further details.(3) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

As at and for the year ended December 31, 2021 (audited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing   (1)    
  Services Services Services      
             
Revenue $ 146,411   $ 36,974   $ 155,315   $ 92,876   $ -   $ 431,576  
             
Cost of services   107,107     20,779     129,685     65,521     -     323,092  
Selling, general and administration   4,729     5,506     6,550     4,701     6,748     28,234  
Other income   -     -     -     -     (2,206 )   (2,206 )
Share-based compensation   -     -     -     -     804     804  
Depreciation(2)   37,507     20,547     9,225     14,844     942     83,065  
Operating income (loss)   (2,932 )   (9,858 )   9,855     7,810     (6,288 )   (1,413 )
             
Gain on sale of property, plant and equipment   493     1,951     1,533     310     76     4,363  
Finance costs, net   (12 )   (71 )   (286 )   (20 )   (6,448 )   (6,837 )
             
Net income (loss) before income taxes   (2,451 )   (7,978 )   11,102     8,100     (12,660 )   (3,887 )
             
Goodwill   -     2,514     1,539     -     -     4,053  
Total assets   325,143     180,188     206,278     93,274     8,639     813,522  
Total liabilities   60,691     10,316     45,721     4,058     199,299     320,085  
Capital expenditures   20,491     1,224     6,205     1,054     9     28,983  
  Canada United States Australia Other Total
           
Revenue $ 242,613   $ 105,305   $ 83,656   $ 2   $ 431,576  
Non-current assets (3)   378,519     141,552     60,256     -     580,327  

As at and for the year ended December 31, 2020 (audited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing   (1)    
  Services Services Services      
             
Revenue $ 96,661   $ 34,529   $ 136,005   $ 98,555   $ -   $ 365,750  
             
Cost of services   72,388     20,429     108,197     65,706     -     266,720  
Selling, general and administration   5,900     5,692     6,474     4,750     4,493     27,309  
Other income   -     -     -     -     (5,969 )   (5,969 )
Share-based compensation   -     -     -     -     866     866  
Depreciation (2)   64,297     23,493     9,603     15,241     729     113,363  
Operating income (loss)   (45,924 )   (15,085 )   11,731     12,858     (119 )   (36,539 )
             
Gain on sale of property, plant and equipment   1,126     1,065     572     27     1,590     4,380  
Finance costs, net   (161 )   (93 )   (374 )   (31 )   (9,687 )   (10,346 )
             
Net income (loss) before income taxes   (44,959 )   (14,113 )   11,929     12,854     (8,216 )   (42,505 )
             
Goodwill   -     2,514     1,539     -     -     4,053  
Total assets   319,075     199,793     215,533     104,743     10,435     849,579  
Total liabilities   56,557     11,022     29,229     5,899     235,885     338,592  
Capital expenditures   4,703     1,024     7,922     3,243     12     16,904  
  Canada United States Australia Other Total
           
Revenue $ 177,519   $ 84,294   $ 103,884   $ 53   $ 365,750  
Non-current assets (3)   419,332     155,175     67,261     -     641,768  

(1) Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities. (2) Effective April 1, 2020 the Company changed certain estimates relating to the useful life and residual value of equipment in the Contract Drilling Services segment. See note 10 to the 2021 Financial Statements for further details. (3) Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

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

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

Notes to the Financial Highlights

  (1) EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions as well as the cash generated by the Company’s primary business activities without consideration of the timing of the monetization of non-cash working capital items. Readers should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly, EBITDA may not be comparable to measures used by other organizations.
     
  (2) Working capital equals current assets minus current liabilities.
     
  (3) Net Debt equals long-term debt plus lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.
     
  (4) Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 16 to the Company’s 2021 Annual 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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