Divestco Inc. (TSX VENTURE:DVT) ("Divestco" or the "Company") announces its
operating results for the three months and year ended December 31, 2012.
Three months ended December 31, 2012
Divestco generated a net loss for the fourth quarter of 2012 of $1.2 million
($0.02 per share - basic and diluted) compared to a net loss of $0.8 million
($0.01 per share - basic and diluted) for the same period in 2011. EBITDA was
$0.3 million in Q4 2012, a $3 million (91%) decrease from $3.3 million for the
same period in 2011. The Company generated funds from operations of $10,000
($nil per share - basic and diluted) for the fourth quarter of 2012, compared to
$2.9 million ($0.05 per share - basic and diluted) for the same period in 2011.
EBITDA and funds from operations do not include capital expenditures of $3.2
million, mainly comprised of the cost related to a new seismic program that
commenced in Q4 2012.
During Q4 2012, Divestco generated revenue of $7.3 million compared to $11.4
million in Q4 2011, a decrease of $4.1 million (36%). Revenue in the Software
and Data segment increased by $1.8 million (68%) due to a large data transaction
completed during Q4 2012. Revenue in the Seismic Data segment decreased by $3.9
million (82%) attributable to the timing of multi- client surveys. In Q4 2012,
the Company incurred $3.5 million in costs on a 3D seismic survey that was
completed in Q1 2013. However there were a number of seismic data sales that did
not close until Q1 2013. Revenue in the Services segment decreased by $2.1
million (49%) as demand for seismic processing and land management services was
weaker, while demand for geomatics was slightly stronger.
Operating expenses decreased by $1.2 million (16%) to $7 million in Q4 2012 from
$8.2 million in Q4 2011. Salaries and wages were up $101,000 (2%). G&A expenses
were down $1.4 million (35%) as occupancy costs decreased by $1 million (45%)
due to the Company surrendering a portion of its office space lease in 2011 and
2012. Professional fees decreased by $882,000 (61%), bad debt expense increased
by $807,000 and direct selling costs decreased by $246,000 (80%). Depreciation
and amortization decreased by $2.5 million (66%) mainly due to lower
depreciation on seismic data as we completed a survey in Q4 2011 and did not
complete any surveys in Q4 2012.
Year ended December 31, 2012
Divestco generated net income for year ended December 31, 2012 of $1.3 million
($0.02 per share - basic and diluted) compared to a net loss of $4.6 million
($0.08 per share - basic and diluted) for 2011. EBITDA was $12.4 million, a $6.3
million (102%) increase from $6.1 million for 2011. The Company generated funds
from operations of $11.7 million ($0.17 per share - basic and diluted) for 2012,
an increase of $6 million (103%) as compared to $5.7 million ($0.10 per share -
basic and diluted) for 2011. EBITDA and funds from operations do not include
capital expenditures of $12.6 million, mainly comprised of the cost of acquiring
new seismic surveys data during 2012.
During the year ended December 31, 2012, Divestco generated revenue of $39.6
million compared to $40.5 million for 2011, a decrease of $0.9 million (2%).
Revenue in the Software and Data segment increased by $3.3 million (35%)
primarily due to two significant data transactions completed in 2012. Revenue in
the Seismic Data segment decreased by $466,000 (3%) due to lower seismic
brokerage revenue. However, the Company completed three seismic participation
surveys, signed a large data library sale and reached a settlement agreement
concerning one of its legal actions in 2012 related to seismic data revenues
that were due to the Company. Revenue in the Services segment decreased by $3.7
million (21%) since demand for seismic processing and land management services
was weaker and only partially offset by stronger demand for geomatics services.
Operating expenses decreased by $7.3 million (21%) to $27.2 million in 2012 from
$34.5 million in 2011. Salaries and wages were down $1.1 million (6%) due to
lower severance costs. G&A expenses were down $6.2 million (39%) as occupancy
costs decreased by $4.8 million (51%) due to the Company surrendering a portion
of its office space lease in 2011. Communication expenses were down $182,000
(40%), professional fees decreased by $1.3 million (42%) and direct selling
costs decreased by $993,000 (73%), partially offset by an increase in bad debt
expense by $918,000. Depreciation and amortization increased by $742,000 (7%)
mainly due to the completion of three seismic participation surveys during 2012,
partially offset by lower depreciation on property and equipment and deferred
development costs.
Working Capital
Divestco ended fiscal 2012 with a working capital deficit of $7.5 million
(December 31, 2011: $0.3 million surplus), excluding deferred revenue of $2.4
million (December 31, 2011 - $4.6 million). The decline in working capital from
the end of 2011 was primarily due to an unpredictably slow Q3 and Q4 that
directly impacted the Services segment and delayed the signing and delivery of
several seismic data contracts. While the Company significantly reduced its
payables since the end of 2011, receivables fell sharply as well. In addition,
$843,000 of the subordinated loan was reclassified from long-term to current
liabilities as compared to December 31, 2011 as the loan matures in May 2013.
The Company's funded debt to equity ratio remained unchanged at 0.64:1 at
December 31, 2012 from December 31, 2011 (0.64:1) as higher equity was offset by
higher funded debt levels ($10.6 million at the end of 2012 compared to $9.4
million at the end of 2011).
Seismic Update
During 2012, Divestco completed three 3D seismic participation surveys (Brazeau,
Big Valley and Ante Creek), covering an area of approximately 389 square
kilometers. Total cost for the three seismic surveys was $14.3 million, with
$5.1 million incurred in 2011. The Company also commenced another survey in Q4
2012 (Alder Flats) which was completed in Q1 2013.
Mr. Stephen Popadynetz, CEO, President and CFO: "Over the last two years
Divestco has made great strides to improve its efficiencies and cut costs.
Unfortunately, in the third quarter of 2012, we saw an unexpected slowdown in
the industry which resulted in a net loss. This carried over initially into Q4
2012, but by the end of the quarter we were witnessing activity levels returning
to normal. As such, we are confident that the Company will return to
profitability. As well, Divestco remains committed to strengthening its
financial position and balance sheet and we have continued to optimize our all
aspects of our G&A (including excess office space). We are also pleased with the
progress we have made towards rebuilding our seismic data library. To date, we
have added more than 860 square kilometers of seismic to our library. Overall
demand for seismic data and general activity levels in the industry is trending
positively and Divestco is currently reviewing a number of new seismic programs
for the coming year. With the strong cost cutting measures taken over the last
two years in place, Divestco is on a well-positioned path for sustained
profitability and growth. We look forward to delivering positive earnings and
improved results for our shareholders."
Non-GAAP Measures
The Company's condensed consolidated interim financial statements have been
prepared in accordance with IFRS. Certain measures in this document do not have
any standardized meaning as prescribed by IFRS and are considered additional
GAAP measures. While these measures may not be comparable to similar measures
presented by other issuers, they are described and presented in this MD&A to
provide shareholders and potential investors with additional information
regarding the Company's results, liquidity, and its ability to generate funds to
finance its operations. These measures include:
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
Divestco uses EBITDA as a key measure to evaluate the performance of its
segments and divisions as well as the Company overall, with the closest IFRS
measure being net income or loss. EBITDA is a measure commonly reported and
widely used by investors as indicators of the Company's operating performance
and ability to incur and service debt, and as a valuation metric. The Company
believes EBITDA assists investors in comparing the Company's performance on a
consistent basis without regard to financing decisions and depreciation and
amortization, which are non-cash in nature and can vary significantly depending
upon accounting methods or non-operating factors such as historical cost.
EBITDA is not a calculation based on IFRS and should not be considered an
alternative to net income or loss in measuring the Company's performance. As
well, EBITDA should not be used as an exclusive measure of cash flow, because it
does not consider the impact of working capital growth, capital expenditures,
debt principal reductions and other sources and uses of cash, which are
disclosed in the consolidated statements of cash flows. While EBITDA has been
disclosed herein to permit a more complete comparative analysis of the Company's
operating performance and debt servicing ability relative to other companies,
investors should be cautioned that EBITDA as reported by Divestco may not be
comparable in all instances to EBITDA as reported by other companies. Investors
should also carefully consider the specific items included in Divestco's
computation of EBITDA.
The following is a reconciliation of EBITDA with net income (loss):
Three months ended Year ended
December 31 December 31
----------------------------------------------------------------------------
(Thousands) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net Income (Loss) $ (1,232) $ (768) $ 1,273 $ (4,610)
Income Tax Expense - 25 (51) 86
Finance Costs 251 252 531 759
Depreciation and
Amortization 1,292 3,823 10,646 9,904
----------------------------------------------------------------------------
EBITDA $ 311 $ 3,332 $ 12,399 $ 6,139
----------------------------------------------------------------------------
Working capital
Working Capital is calculated as current assets minus current liabilities
(excluding deferred revenue). Working capital provides a measure that can be
used to gauge Divestco's ability to meet its current obligations.
Additional GAAP Measure
Funds from operations
Divestco reports funds from operations because it is a key measure used by
management to evaluate its performance and to assess the ability of the Company
to finance operating and investing activities. Funds from operations excludes
certain working capital changes and other sources and uses of cash, which are
disclosed in the consolidated statements of cash flows.
Funds from operations is not a calculation based on IFRS and should not be
considered an alternative to the consolidated statements of cash flows. Funds
from operations is a measure that can be used to gauge Divestco's capacity to
generate discretionary cash flow. Investors should be cautioned that funds from
operations as reported by Divestco may not be comparable in all instances to
funds from operations as reported by other companies. While the closest IFRS
measure is cash from operating activities, funds from operations is considered
relevant because it provides an indication of how much cash generated by
operations is available before proceeds from divested assets and changes in
certain working capital items.
The following reconciles funds from operations with cash from operating activities:
Three months ended Year ended
December 31 December 31
----------------------------------------------------------------------------
(Thousands) 2012 2011 2012 2011
----------------------------------------------------------------------------
Cash from (used in )
Operating Activities $ (155) $ 3 $ 14,892 $ 5,093
Changes in Non-Cash Working
Capital Balances Related to
Operating Activities (85) 2,703 (3,408) 411
Interest Paid 219 202 374 593
Income Taxes Paid (Refunded) 31 - (184) (352)
----------------------------------------------------------------------------
Funds from Operations $ 10 $ 2,908 $ 11,674 $ 5,745
----------------------------------------------------------------------------
Financial Highlights
Financial Results (Thousands, Except Per Share Amounts)
----------------------------------------------------------------------------
Three months ended December 31
----------------------------------------------------------------------------
2012 2011 $ Change % Change
----------------------------------------------------------------------------
Revenue $ 7,270 $ 11,447 $ (4,177) -36%
Operating Expenses 6,960 8,248 (1,288) -16%
Other Loss (Income) (1) (133) 132 N/A
----------------------------------------------------------------------------
EBITDA 311 3,332 (3,021) -91%
Finance Costs 251 252 (1) 0%
Depreciation and
Amortization 1,292 3,823 (2,531) -66%
----------------------------------------------------------------------------
Income (Loss) before Income
Taxes (1,232) (743) (489) N/A
Income Tax Expense - 25 (25) -100%
----------------------------------------------------------------------------
Net Income (Loss) $ (1,232) $ (768) $ (464) N/A
Per Share - Basic and
Diluted (0.02) (0.01) (0.01) N/A
----------------------------------------------------------------------------
Funds from Operations $ 10 $ 2,908 $ (2,898) -100%
Per Share - Basic and
Diluted - 0.05 (0.05) -100%
----------------------------------------------------------------------------
Shares Outstanding 66,758 66,610 N/A N/A
Weighted Average Shares
Outstanding
Basic 66,738 60,575 N/A N/A
Diluted 66,738 60,575 N/A N/A
----------------------------------------------------------------------------
Year ended December 31
----------------------------------------------------------------------------
2012 2011 $ Change % Change
----------------------------------------------------------------------------
Revenue $ 39,628 $ 40,464 $ (836) -2%
Operating Expenses 27,189 34,485 (7,296) -21%
Other Loss (Income) 40 (160) 200 N/A
----------------------------------------------------------------------------
EBITDA 12,399 6,139 6,260 102%
Finance Costs 531 759 (228) -30%
Depreciation and
Amortization 10,646 9,904 742 7%
----------------------------------------------------------------------------
Income (Loss) before Income
Taxes 1,222 (4,524) 5,746 N/A
Income Tax Expense (51) 86 (137) N/A
----------------------------------------------------------------------------
Net Income (Loss) $ 1,273 $ (4,610) $ 5,883 N/A
Per Share - Basic and
Diluted 0.02 (0.08) 0.10 N/A
----------------------------------------------------------------------------
Funds from Operations $ 11,674 $ 5,745 $ 5,929 103%
Per Share - Basic and
Diluted 0.17 0.10 0.07 70%
----------------------------------------------------------------------------
Shares Outstanding 66,758 66,610 N/A N/A
Weighted Average Shares
Outstanding
Basic 66,679 59,797 N/A N/A
Diluted 66,679 59,797 N/A N/A
----------------------------------------------------------------------------
Financial Position (Thousands)
----------------------------------------------------------------------------
Balance at Balance at Balance at
Dec 31 Dec 31 Dec 31
----------------------------------------------------------------------------
2012 2011 2010
----------------------------------------------------------------------------
Total Assets $ 41,945 $ 43,761 $ 34,984
Working Capital (Deficit) (1) (7,483) 297 3,599
Long-Term Financial Liabilities
(2) 7,622 8,610 3,907
----------------------------------------------------------------------------
(1) Excludes the current portion of deferred revenue of $2.4 million
(December 31, 2011: $4.6 million; December 31, 2010: $3.9 million)
(2) Includes long-term debt obligations, deferred rent obligations, sublease
loss provision and other long-term liabilities. The long-term debt
obligations are comprised of the Company's subordinated debt,
shareholder loans and finance leases
Segment Review Summary
Three months ended December 31, 2012 (Thousands)
Software
and Seismic Corporate &
Data Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 4,319 $ 2,121 $ 830 $ - $ 7,270
EBITDA 2,523 (761) (165) (1,286) 311
Finance costs
(income) - - - 251 251
Depreciation and
Amortization 788 221 156 127 1,292
Income (loss)
before income
taxes 1,735 (982) (321) (1,664) (1,232)
----------------------------------------------------------------------------
Three months ended December 31, 2011 (Thousands)
----------------------------------------------------------------------------
Corporate &
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 2,566 $ 4,195 $ 4,686 $ - $ 11,447
EBITDA 1,142 1,186 3,966 (2,962) 3,332
Finance costs
(income) - (1) (1) 254 252
Depreciation and
Amortization 706 294 2,631 192 3,823
Income (loss)
before income
taxes 436 893 1,336 (3,408) (743)
----------------------------------------------------------------------------
Year ended December 31, 2012 (Thousands)
----------------------------------------------------------------------------
Corporate &
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 12,742 $ 13,568 $ 13,318 $ - $ 39,628
EBITDA 6,047 1,129 9,637 (4,414) 12,399
Finance costs
(income) - (1) (9) 541 531
Depreciation and
Amortization 3,150 893 6,034 569 10,646
Income (loss)
before income
taxes 2,897 237 3,612 (5,524) 1,222
----------------------------------------------------------------------------
Year ended December 31, 2011 (Thousands)
----------------------------------------------------------------------------
Corporate &
Software Services Data Other Total
----------------------------------------------------------------------------
Revenue $ 9,414 $ 17,266 $ 13,784 $ - $ 40,464
EBITDA 3,541 3,620 10,651 (11,673) 6,139
Finance costs
(income) - (3) (6) 768 759
Depreciation and
Amortization 3,453 1,098 3,632 1,721 9,904
Income (loss)
before income
taxes 88 2,525 7,025 (14,162) (4,524)
----------------------------------------------------------------------------
Divestco Inc.
Condensed Consolidated Interim Statements of Financial Position
At December 31
----------------------------------------------------------------------------
(Thousands - Unaudited) 2012 2011
----------------------------------------------------------------------------
Assets
Current Assets
Cash $ 1,320 $ 1,547
Funds held in trust 18 40
Accounts receivable 7,134 11,810
Prepaid expenses, supplies and deposits 357 235
Income taxes receivable 196 110
Asset held for sale - 2,500
----------------------------------------------------------------------------
Total current assets 9,025 16,242
Investment in affiliated company 137 141
Participation surveys in progress 3,508 5,108
Property and equipment 4,607 4,147
Intangible assets 24,668 18,123
----------------------------------------------------------------------------
Total assets $ 41,945 $ 43,761
----------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Bank indebtedness $ 4,450 $ 3,700
Accounts payable and accrued liabilities 9,624 10,669
Deferred revenue 2,420 4,561
Current loss on sublease loss provision 326 320
Current portion of long-term debt
obligations 1,986 1,143
Current portion of tenant inducement 122 113
----------------------------------------------------------------------------
Total current liabilities 18,928 20,506
Deferred rent obligations 189 1,124
Long-term debt obligations 4,115 4,591
Sublease loss provision 1,006 1,332
Tenant Inducements 1,389 1,397
Other long-term liabilities - 100
----------------------------------------------------------------------------
Total liabilities 25,627 29,050
----------------------------------------------------------------------------
Shareholders' Equity
Equity instruments 7,216 76,431
Contributed surplus 7,829 5,663
Retained earnings (deficit) 1,273 (67,383)
----------------------------------------------------------------------------
Total shareholders' equity 16,318 14,711
----------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 41,945 $ 43,761
----------------------------------------------------------------------------
Divestco Inc.
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive
Income (Loss)
Year ended December 31
----------------------------------------------------------------------------
(Thousands, Except Per Share Amounts -
Unaudited) 2012 2011
----------------------------------------------------------------------------
Revenue $ 39,628 $ 40,464
----------------------------------------------------------------------------
Operating expenses
Salaries and benefits 17,667 18,748
General and administrative 9,213 15,664
Depreciation and amortization 10,646 9,904
Stock compensation expense 309 73
----------------------------------------------------------------------------
Total operating expenses 37,835 44,389
----------------------------------------------------------------------------
Finance costs 531 759
Other loss (income) 40 (160)
----------------------------------------------------------------------------
Income (loss) before income taxes 1,222 (4,524)
----------------------------------------------------------------------------
Income taxes
Current (51) 86
----------------------------------------------------------------------------
Net income (loss) and comprehensive income
(loss) for the year $ 1,273 $ (4,610)
----------------------------------------------------------------------------
Net income (loss) per share
Basic and Diluted $ 0.02 $ (0.08)
Weighted average number of shares
Basic and Diluted 66,679 59,797
----------------------------------------------------------------------------
Divestco Inc.
Condensed Consolidated Interim Statements of Changes in Equity
Number of
(Thousands - Number of Share Warrants
Unaudited) Shares Issued Capital Issued Warrants
----------------------------------------------------------------------------
Balance as at January
1, 2011 58,938 $ 73,445 15,825 $ 1,808
Net loss and
comprehensive loss
for the year
Transactions with
owners, recorded in
equity contributions
by and distributions
to owners:
Issue of Class A
common shares 7,672 1,133 455 52
Share-based payment
transactions
Share issue costs (7)
----------------------------------------------------------------------------
Balance as at December
31, 2011 66,610 $ 74,571 16,280 $ 1,860
Balance as at January
1, 2012 66,610 $ 74,571 16,280 $ 1,860
Reduction of stated
capital and deficit (67,383)
Net income and
comprehensive income
for the year
Transactions with
owners, recorded in
equity contributions
by and distributions
to owners:
Issue of Class A
common shares 128 25
Issue on exercise of
PSUs 20 3
Reclassification on
exercise of PSUs
Reclassification on
expiry of warrants (16,280) (1,860)
Share-based payment
transactions
----------------------------------------------------------------------------
Balance as at December
31, 2012 66,758 $ 7,216 - $ -
----------------------------------------------------------------------------
Retained
(Thousands - Equity Contributed Earnings Total
Unaudited) Instruments Surplus (Deficit) Equity
----------------------------------------------------------------------------
Balance as at January
1, 2011 $ 75,253 $ 5,590 $ (62,773) $ 18,070
Net loss and
comprehensive loss
for the year (4,610) (4,610)
Transactions with
owners, recorded in
equity contributions
by and distributions
to owners:
Issue of Class A
common shares 1,185 1,185
Share-based payment
transactions 73 73
Share issue costs (7) (7)
----------------------------------------------------------------------------
Balance as at December
31, 2011 $ 76,431 $ 5,663 $ (67,383) $ 14,711
Balance as at January
1, 2012 $ 76,431 $ 5,663 $ (67,383) $ 14,711
Reduction of stated
capital and deficit (67,383) 67,383
Net income and
comprehensive income
for the year 1,273 1,273
Transactions with
owners, recorded in
equity contributions
by and distributions
to owners:
Issue of Class A
common shares 25 25
Issue on exercise of
PSUs 3 3
Reclassification on
exercise of PSUs (3) (3)
Reclassification on
expiry of warrants (1,860) 1,860
Share-based payment
transactions 309 309
----------------------------------------------------------------------------
Balance as at December
31, 2012 $ 7,216 $ 7,829 $ 1,273 $ 16,318
----------------------------------------------------------------------------
Divestco Inc.
Condensed Consolidated Interim Statements of Cash Flows
Year ended
December 31
----------------------------------------------------------------------------
(Thousands - Unaudited) 2012 2011
----------------------------------------------------------------------------
Cash from (used in) operating activities
Net income (loss) for the year $ 1,273 $ (4,610)
Items not affecting cash:
Equity investment income (10) (12)
Depreciation and amortization 10,646 9,904
Sublease loss - (839)
Amortization of tenant inducements (117) (109)
Deferred rent obligations (936) 557
Income taxes (51) 86
Unrealized foreign exchange loss 4 (3)
Non-cash employment benefits 25 85
Share-based payments 309 73
Finance costs (income) 531 759
----------------------------------------------------------------------------
Funds from operations 11,674 5,745
Changes in non-cash working capital balances 3,408 (411)
Interest received (paid) (374) (593)
Income taxes refunded (paid) 184 352
----------------------------------------------------------------------------
Net cash from operating activities 14,892 5,093
----------------------------------------------------------------------------
Cash from (used in) financing activities
Bank indebtedness 750 1,650
Advances to affiliated company 14 -
Issue of common shares (net of related costs) - 1,093
Repayment of long-term debt obligations (1,965) (406)
Deferred financing costs - (153)
Proceeds received from long-term debt
obligations (net of committed
revolver repayments) 2,210 5,500
----------------------------------------------------------------------------
Net cash from (used in) financing activities 1,009 7,684
----------------------------------------------------------------------------
Cash from (used in) investing activities
Additions to intangible assets (14,197) (9,012)
Decrease (increase) in participation surveys
in progress 1,600 (3,855)
Purchase of property and equipment (1,320) (5,907)
Additions to tenant inducements 118 3,596
Payments towards sublease loss provision (357) (922)
Investment in affiliates - (29)
Deferred development costs (2,353) (2,475)
Changes in non-cash working capital balances 381 2,678
----------------------------------------------------------------------------
Net cash from (used in) investing activities (16,128) (14,926)
----------------------------------------------------------------------------
Increase (decrease) in cash (227) (2,149)
Cash, beginning of year 1,547 3,696
----------------------------------------------------------------------------
Cash, end of year $ 1,320 $ 1,547
----------------------------------------------------------------------------
About the Company
Divestco is an exploration services company that provides a comprehensive and
integrated portfolio of data, software, and services to the oil and gas
industry. Through continued commitment to align and bundle products and services
to generate value for customers, Divestco is creating an unparalleled set of
integrated solutions and unique benefits for the marketplace. Divestco's breadth
of data, software and services offers customers the ability to access and
analyze the information required to make business decisions and to optimize
their success in the upstream oil and gas industry. Divestco is headquartered in
Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol
"DVT".
This press release contains forward-looking information related to the Company's
capital expenditures, projected growth, view and outlook with respect to future
oil and gas prices and market conditions, and demand for its products and
services. Statements that contain words such as "could', "should", "can",
"anticipate", "expect", "believe", "will", "may" an d similar expressions and
statements relating to matters that are not historical facts constitute
"forward-looking information" within the meaning applicable by Canadian
securities legislation. Although management of the Company believes that the
expectations reflected in such forward-looking information are reasonable, there
can be no assurance that such expectations will prove to have been correct
because, should one or more of the risks materialize, or should the assumptions
underlying forward-looking statements or forward-looking information prove
incorrect, actual results may vary materially from those described in this press
release as intended, planned, anticipated, believed, estimated or expected.
Readers should not place undue reliance on forward-looking statements or
forward-looking information. All of the forward-looking statements and
forward-looking information of the Company contained in this press release are
expressly qualified, in their entirety, by this cautionary statement. Except
where required by law, the Company does not assume any obligation to update
these forward-looking statements or forward-looking information if conditions or
opinions should change.
In particular, this press release contains forward-looking statements pertaining
to the following: Company's ability to keep debt and liquidity at acceptable
levels, improve/maintain its working capital position and maintain profitability
in the current economy; availability of external and internal funding for future
operations; relative future competitive position of the Company; nature and
timing of growth; oil and natural gas production levels; planned capital
expenditure programs; supply and demand for oil and natural gas; future demand
for products/services; commodity prices; impact of Canadian federal and
provincial governmental regulation on the Company; expected levels of operating
costs, finance costs and other costs and expenses; future ability to execute
acquisitions and dispositions of assets or businesses; expectations regarding
the Company's ability to raise capital and to add to seismic data through new
seismic shoots and acquisition of existing seismic data; treatment under tax
laws; and new accounting pronouncements.
These forward-looking statements are based upon assumptions including: future
prices for crude oil and natural gas; future interest rates and future
availability of debt and equity financing will be at levels and costs that allow
the Company to manage, operate and finance its business and develop its software
products and various oil and gas datasets including its seismic data library,
and meet its future obligations; the regulatory framework in respect of
royalties, taxes and environmental matters applicable to the Company and its
customers will not become so onerous on both the Company and its customers as to
preclude the Company and its customers from viably managing, operating and
financing its business and the development of its software and data; and that
the Company will continue to be able to identify, attract and employ qualified
staff and obtain the outside expertise as well as specialized and other
equipment it requires to manage, operate and finance its business and develop
its properties.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Company's control, including:
general economic, market and business conditions; volatility in market prices
for crude oil and natural gas; ability of Divestco's clients to explore for,
develop and produce oil and gas; availability of financing and capital;
fluctuations in interest rates; demand for the Company's product and services;
weather and climate conditions; competitive actions by other companies;
availability of skilled labour; failure to obtain regulatory approvals in a
timely manner; adverse conditions in the debt and equity markets; and government
actions including changes in environment and other regulation.
FOR FURTHER INFORMATION PLEASE CONTACT:
Divestco Inc.
Mr. Stephen Popadynetz
CEO, President and CFO
587-952-8152
Divestco Inc.
Mr. Danny Chiarastella
Vice President, Finance
587-952-8027
www.divestco.com
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