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Total Energy Services Inc. Announces Q2 2024 Results

GlobeNewswire - Thu Aug 8, 4:00PM CDT

CALGARY, Alberta, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three and six months ended June 30, 2024.

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

 Three months ended
June 30
 Six months ended
June 30
  2024  2023Change  2024  2023Change
Revenue$ 213,334  $208,8452% $418,020 $446,622(6%)
Operating income  14,612   9,40155%  36,642  37,421(2%)
EBITDA (1)   37,447   30,25524%  80,737  78,7303%
Cashflow  38,094   29,40830%  70,931  78,080(9%)
Net income  15,454   6,180150%  30,917  30,2182%
Attributable to shareholders  15,472   6,201150%  30,954  30,2412%
              
Per Share Data (Diluted)             
EBITDA (1)$ 0.93  $0.7426% $ 2.00  $1.896%
Cashflow$ 0.95  $0.7232% $ 1.75  $1.88(7%)
              
Attributable to shareholders:             
Net income$ 0.39  $0.15160% $ 0.77  $0.735%
              
Common shares (000’s)(4)             
Basic 39,329  40,325(2%)  39,740  40,821(3%)
Diluted 40,060  41,048(2%)  40,453  41,568(3%)
              
         June 30  December 31 
Financial Position at        2024  2023Change
Total Assets $936,356 $861,6589%
Long-Term Debt and Lease Liabilities (excluding current portion)100,983  100,834-
Working Capital (2)  71,816  123,439(42%)
Net Debt (3)  29,167  -nm
Shareholders’ Equity  549,999  530,7584%
              

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 June 30, 2024 represent record second quarter financial results. Relatively stable industry conditions in Canada and Australia, the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”) on March 7, 2024 and continued strong North American demand for compression and process equipment more than offset a year over year decline in drilling and completion activity in the United States.  


Contract Drilling Services (“CDS”)

  Three months ended
June 30
 Six months ended
June 30
  2024  2023Change 2024  2023Change
Revenue$67,889 $54,28225% $149,100 $136,8189%
EBITDA (1)$14,505 $9,89147% $36,851 $30,16022%
EBITDA (1) as a % of revenue 21%  18%17%  25%  22%14%
Operating days(2)  2,075   1,9745%   4,851   4,843-
Canada  1,082   1,094(1%)   3,093   3,0143%
United States  346   571(39%)   705   1,161(39%)
Australia  647   309109%   1,053   66858%
Revenue per operating day(2), dollars$ 32,718  $27,49819% $ 30,736  $28,2519%
Canada  25,563   25,3961%   26,805   26,4311%
United States  28,905   27,3196%   28,909   28,2272%
Australia  46,722   35,27532%   43,506   36,50019%
Utilization 22%  23%(4%)  26%  29%(10%)
Canada 15%  16%(6%)  22%  22%-
United States 32%  52%(38%)  32%  51%(37%)
Australia 44%  68%(35%)  48%  74%(35%)
Rigs, average for period 105  9412%  101  947%
Canada 77  761%  77  761%
United States 12  12-  12  13(8%)
Australia 16  5220%  12  5140%

(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.

Canadian drilling activity during the second quarter of 2024 was consistent with 2023. The decline in United States drilling activity that began in the third quarter of 2023 continued into the second quarter of 2024. In Australia, Saxon contributed $19.2 million of revenue during the second quarter of 2024. The substantial year over year increase in second quarter Australian revenue per operating day reflects the addition of Saxon’s deeper drilling rig fleet which receives higher day rates.   


Rentals and Transportation Services (“RTS”)

  Three months ended
June 30
 Six months ended
June 30
  2024  2023Change 2024  2023Change
Revenue$17,798 $19,812(10%) $40,177 $44,225(9%)
EBITDA (1)$6,064 $7,064(14%) $15,779 $16,714(6%)
EBITDA (1) as a % of revenue 34%  36%(6%)  39%  38%3%
Revenue per utilized piece of equipment, dollars$16,257 $15,4285% $28,543 $22,29128%
Pieces of rental equipment 7,940  7,6674%  7,940  7,6674%
Canada 7,030  6,7794%  7,030  6,7794%
United States 910  8882%  910  8882%
Rental equipment utilization 14%  15%(7%)  18%  21%(14%)
Canada 12%  14%(14%)  15%  18%(17%)
United States 32%  34%(6%)  35%  40%(13%)
Heavy trucks 66  69(4%)  66  69(4%)
Canada 45  48(6%)  45  48(6%)
United States 21  21-  21  21-

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.

Second quarter revenue in the RTS segment decreased as compared to 2023 due to lower industry activity in the United States. The year-over-year decline in second-quarter EBITDA and EBITDA margin was a result of lower equipment utilization given this segment’s relatively high fixed cost structure. Partially offsetting the impact of lower equipment utilization on revenue and EBITDA was a modest increase in revenue per utilized piece of equipment.


Compression and Process Services (“CPS”)

  Three months ended
June 30
 Six months ended
June 30
  2024  2023Change 2024  2023Change
Revenue$109,454 $113,130(3%) $186,980 $211,248(11%)
EBITDA (1)$17,559 $12,39942% $28,459 $24,99814%
EBITDA (1) as a % of revenue 16%  11%45%  15%  12%25%
Horsepower of equipment on rent at period end 54,476  41,84230%  54,476  41,84230%
Canada 16,156  19,202(16%)  16,156  19,202(16%)
United States 38,320  22,64069%  38,320  22,64069%
Rental equipment utilization during the period (HP)(2) 80%  78%3%  77%  78%(1%)
Canada 70%  84%(17%)  69%  78%(12%)
United States 84%  73%15%  80%  77%4%
Sales backlog at period end, $ million$204.6  $185.610% $204.6  $185.610%

(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 decrease in the CPS segment’s second quarter revenue was due primarily to lower fabrication sales resulting from a shift in customer preference towards renting compression units in the United States. The resulting increase in horsepower on rent contributed to improved second quarter EBITDA and EBITDA margins for 2024 as compared to 2023. The fabrication sales backlog strengthened during the second quarter of 2024, increasing by $18.9 million from the $185.7 million sales backlog at March 31, 2024.


Well Servicing (“WS”)

  Three months ended
June 30
 Six months ended
June 30
  2024  2023Change 2024  2023Change
Revenue$18,193 $21,621(16%) $41,763 $54,331(23%)
EBITDA (1)$2,087 $2,854(27%) $6,401 $11,133(43%)
EBITDA (1) as a % of revenue 11%  13%(15%)  15%  20%(25%)
Service hours(2) 18,063  22,630(20%)  42,627  55,876(24%)
Canada 8,410  9,357(10%)  23,817  26,848(11%)
United States 3,115  5,767(46%)  6,630  12,411(47%)
Australia 6,538  7,506(13%)  12,180  16,617(27%)
Revenue per service hour(2), dollars$1,007 $9555% $980 $9721%
Canada 945  941-  963  969(1%)
United States 937  993(6%)  891  998(11%)
Australia 1,121  94519%  1,060  95911%
Utilization(3) 20%  25%(20%)  25%  32%(22%)
Canada 17%  18%(6%)  24%  26%(8%)
United States 29%  58%(50%)  30%  62%(52%)
Australia 25%  29%(14%)  23%  32%(28%)
Rigs, average for period 79  79-  79  79-
Canada 55  56(2%)  55  56(2%)
United States 12  119%  12  119%
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.

Second quarter WS segment revenue and EBITDA decreased as compared to 2024 due to lower activity in all jurisdictions. Canadian activity was negatively impacted by lower well abandonment activity. Activity levels in the United States were significantly lower due to reduced industry activity levels, due in part to significant customer consolidation. Field activity in Australia was somewhat restricted during the second quarter of 2024 due to periods of wet weather although price increases following certain rig upgrades mitigated the impact of lower service hours on revenue.


Corporate

During the second quarter of 2024, Total Energy remained focused on the safe and efficient operation of its business, execution of its 2024 capital expenditure program and the integration of the Saxon acquisition. $20.7 million of capital expenditures were made during the second quarter of 2024.

Total Energy exited the second quarter of 2024 with $71.8 million of positive working capital, including $24.8 million of cash, and $85 million of available credit under its $175 million of revolving bank credit facilities. Included in working capital at June 30, 2024 is a $42.0 million mortgage loan that became current debt as it matures in April of 2025. Total Energy expects to repay this debt (which bears interest at a fixed rate of 3.10%) at maturity when approximately $40.2 million of principal will be outstanding. The weighted average interest rate on the Company’s outstanding debt at June 30, 2024 was 5.62%.

Outlook

Industry conditions remain stable. While North American natural gas spot market price weakness has negatively impacted North American gas drilling activity, particularly in the United States, relatively strong oil prices and the pending completion of several LNG export facilities have provided tailwinds for the North American energy services industry, particularly in Canada.

The significant investment in Total Energy’s Australian business, including the acquisition of Saxon in March, began to pay dividends in the second quarter of 2024. Synergies arising from the ongoing integration of Saxon with Savanna Australia and the completion of several capital projects during the third quarter of 2024 will see this momentum continue. In late July, a Saxon drilling rig was reactivated and in early August a service rig returned to service following its recertification and upgrade. Both rigs are operating under long term contracts. In addition, a newly constructed drilling rig is scheduled to commence operations by September under a long term contract.

Despite weak near term North American natural gas prices, demand for compression and processing equipment remains steady, driven by continued infrastructure investment to support expansion of North American LNG export capacity. The Company’s significant investment in growing the CPS segment’s compression rental fleet during the first half of 2024 was reflected in that segment’s second quarter results. This investment will continue to benefit the CPS segment going forward as it was supported by long term contracts.

Conference Call

At 9:00 a.m. (Mountain Time) on August 9, 2024 Total Energy will conduct a conference call and webcast to discuss its second 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 (844) 763-8274 or (647) 484-8814. 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 September 9, 2024 by dialing (855) 669-9658 (passcode 7163493).


Selected Financial Information

Selected financial information relating to the three and six months ended June 30, 2024 and 2023 is included in this news release. This information should be read in conjunction with the condensed interim 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)

  June 30
December 31
   2024  2023 
  (unaudited)(audited)
Assets     
Current assets:     
Cash and cash equivalents $24,764 $47,935 
Accounts receivable  146,184  137,604 
Inventory  119,886  98,179 
Prepaid expenses and deposits  14,126  16,735 
   304,960  300,453 
      
Property, plant and equipment  624,058  557,152 
Deferred income tax asset  3,285  - 
Goodwill  4,053  4,053 
  $936,356 $861,658 
      
Liabilities & Shareholders' Equity     
Current liabilities:     
Accounts payable and accrued liabilities $124,314 $116,794 
Deferred revenue  50,025  39,321 
Contingent consideration on business acquisition  2,738  - 
Income taxes payable  3,898  9,771 
Dividends payable  3,496  3,198 
Current portion of lease liabilities  6,697  5,880 
Current portion of long-term debt  41,976  2,050 
   233,144  177,014 
      
Long-term debt  90,000  90,947 
      
Lease liabilities  10,983  9,887 
      
Deferred income tax liability  52,230  53,052 
      
Shareholders' equity:     
Share capital  244,223  251,283 
Contributed surplus  4,755  4,805 
Accumulated other comprehensive loss  (18,204)  (25,506) 
Non-controlling interest  284  521 
Retained earnings  318,941  299,655 
   549,999  530,758 
      
  $936,356 $861,658 
        


Consolidated Statements of Income

(in thousands of Canadian dollars except per share amounts)
(unaudited)

   Three months ended
June 30
 Six months ended
June 30
   2024  2023  2024  2023 
          
Revenue $213,334 $208,845 $418,020 $446,622 
          
Cost of services  164,333  169,049  312,562  347,035 
Selling, general and administration  11,441  10,126  24,175  21,559 
Other (income) expense  (196)  (440)  124  (446) 
Share-based compensation  713  367  1,422  756 
Depreciation  22,431  20,342  43,095  40,297 
Operating income  14,612  9,401  36,642  37,421 
          
Gain on sale of property, plant and equipment  404  512  1,000  1,012 
Finance costs, net  (2,156)  (1,796)  (3,988)  (3,499) 
Net income before income taxes  12,860  8,117  33,654  34,934 
          
Current income tax expense  1,046  47  5,018  371 
Deferred income tax (recovery) expense  (3,640)  1,890  (2,281)  4,345 
Total income tax (recovery) expense  (2,594)  1,937  2,737  4,716 
          
Net income  $15,454 $6,180 $30,917 $30,218 
          
Net income (loss) attributable to:         
Shareholders of the Company $15,472 $6,201 $30,954 $30,241 
Non-controlling interest  (18)  (21)  (37)  (23) 
          
Income per share         
Basic $0.39 $0.15 $0.78 $0.74 
Diluted $0.39 $0.15 $0.77 $0.73 
          


Consolidated Statements of Comprehensive Income

   Three months ended
June 30
 Six months ended
June 30
   2024  2023  2024  2023 
          
Net income $15,454 $6,180 $30,917 $30,218 
          
Foreign currency translation  5,667  (4,682)  7,302  (5,300) 
          
Total other comprehensive income (loss) for the period 5,667  (4,682)  7,302  (5,300) 
          
Total comprehensive income  $21,121 $1,498 $38,219 $24,918 
          
Total comprehensive income (loss) attributable to:         
          
Shareholders of the Company $21,139 $1,519 $38,256 $24,941 
Non-controlling interest  (18)  (21)  (37)  (23) 
              


Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)
(unaudited)

  Three months ended
June 30
Six months ended
June 30
  2024202320242023
          
Cash provided by (used in):         
          
Operations:         
Net income for the period $15,454 $6,180 $30,917 $30,218 
Add (deduct) items not affecting cash:         
Depreciation  22,431  20,342  43,095  40,297 
Share-based compensation  713  367  1,422  756 
Gain on sale of property, plant and equipment  (404)  (512)  (1,000)  (1,012) 
Finance costs, net  2,156  1,796  3,988  3,499 
Foreign currency translation  933  (702)  663  (350) 
Current income tax expense  1,046  47  5,018  371 
Deferred income tax (recovery) expense  (3,640)  1,890  (2,281)  4,345 
Income taxes paid  (595)  -  (10,891)  (44) 
Cashflow  38,094  29,408  70,931  78,080 
Changes in non-cash working capital items:         
Accounts receivable  (18)  22,124  (8,580)  5,120 
Inventory  (6,960)  (9,241)  (21,707)  (20,044) 
Prepaid expenses and deposits  (1,103)  (491)  2,609  146 
Accounts payable and accrued liabilities  (4,465)  14,534  12,867  18,546 
Deferred revenue  3,639  (12,432)  10,704  (8,205) 
Cash provided by operating activities  29,187  43,902  66,824  73,643 
Investing:         
Purchase of property, plant and equipment  (20,703)  (12,665)  (50,338)  (42,454) 
Cash paid on acquisition  -  -  (47,350)  - 
Proceeds on disposal of property, plant and equipment  922  741  1,549  1,504 
Changes in non-cash working capital items  (305)  (10,229)  3,701  2,504 
Cash used in investing activities  (20,086)  (22,153)  (92,438)  (38,446) 
Financing:         
Advancements of long-term debt  -  -  60,000  - 
Repayment of long-term debt  (10,513)  (10,496)  (21,021)  (15,993) 
Repayment of lease liabilities  (1,763)  (1,539)  (3,392)  (3,156) 
Dividends to shareholders  (3,596)  (3,242)  (6,794)  (5,732) 
Repurchase of common shares  (11,946)  (3,275)  (12,670)  (11,289) 
Shares issued on exercise of stock options  64  -  64  - 
Partnership distributions  -  -  (200)  - 
Interest paid  (1,622)  (1,559)  (13,544)  (3,222) 
          
Cash (used in) from financing activities  (29,376)  (20,111)  2,443  (39,392) 
          
Change in cash and cash equivalents  (20,275)  1,638  (23,171)  (4,195) 
          
Cash and cash equivalents, beginning of period  45,039  28,228  47,935  34,061 
          
Cash and cash equivalents, end of period $24,764 $29,866 $24,764 $29,866 
          


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 June 30, 2024 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate
 Total
  Drilling Transportation and Process Servicing (1)   
  Services Services Services      
             
Revenue$ 67,889  $ 17,798  $ 109,454  $ 18,193  $-  $ 213,334  
             
Cost of services  51,392    9,853    88,179    14,909    -    164,333  
Selling, general and administration  2,060    2,162    3,795    1,173    2,251    11,441  
Other income   -    -    -    -    (196)   (196) 
Share-based compensation  -    -    -    -    713    713  
Depreciation   12,039    5,019    2,622    2,424    327    22,431  
Operating income (loss)  2,398    764    14,858    (313)   (3,095)   14,612  
             
Gain (loss) on sale of property, plant and equipment  68    281    79    (24)   -    404  
Finance costs, net  (16)   (46)   (110)   (22)   (1,962)   (2,156) 
             
Net income (loss) before income taxes  2,450    999    14,827    (359)   (5,057)   12,860  
             
Goodwill  -    2,514    1,539    -    -    4,053  
Total assets  424,342    163,914    276,447    70,130    1,523    936,356  
Total liabilities  78,649    29,854    106,665    6,063    165,126    386,357  
Capital expenditures 8,777  2,388  3,732  5,806  -  20,703 


   Canada  United States  Australia  Total 
              
Revenue $ 76,906  $ 98,471  $ 37,957  $ 213,334  
Non-current assets (2)   368,701    137,395    122,015    628,111  


As at and for the three months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression Well Corporate Total
  Drilling Transportation and Process Servicing (1)   
  Services Services Services      
             
Revenue$54,282 $19,812 $113,130 $21,621 $- $208,845 
             
Cost of services 42,783  10,994  97,513  17,759  -  169,049 
Selling, general and administration 1,986  2,076  3,218  1,072  1,774  10,126 
Other (income) expense (288)  (7)  43  -  (188)  (440) 
Share-based compensation -  -  -  -  367  367 
Depreciation 9,479  4,845  2,614  3,142  262  20,342 
Operating income (loss) 322  1,904  9,742  (352)  (2,215)  9,401 
             
Gain on sale of property, plant and equipment 90  315  43  64  -  512 
Finance costs, net (15)  (17)  (111)  (17)  (1,636)  (1,796) 
             
Net income (loss) before income taxes 397  2,202  9,674  (305)  (3,851)  8,117 
             
Goodwill -  2,514  1,539  -  -  4,053 
Total assets 354,433  177,972  278,289  75,584  1,839  888,117 
Total liabilities 65,250  27,464  132,616  6,196  126,637  358,163 
Capital expenditures 7,614  2,596  542  1,913  -  12,665 


  Canada  United States  Australia  Total 
             
Revenue$83,257 $98,820 $26,768 $208,845 
Non-current assets (2) 395,421  128,222  47,394  571,037 

(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 six months ended June 30, 2024
(unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression WellCorporate
 Total
  Drilling Transportation and Process Servicing (1)   
  Services Services Services      
             
Revenue$ 149,100  $ 40,177  $ 186,980  $ 41,763  $-  $ 418,020  
             
Cost of services  107,284    20,768    151,730    32,780    -    312,562  
Selling, general and administration  5,066    4,423    6,921    2,558    5,207    24,175  
Other expense   -    -    -    -    124    124  
Share-based compensation  -    -    -    -    1,422    1,422  
Depreciation   22,382    10,083    5,211    4,823    596    43,095  
Operating income (loss)  14,368    4,903    23,118    1,602    (7,349)   36,642  
             
Gain (loss) on sale of property, plant and equipment  101    793    130    (24)   -    1,000  
Finance costs, net  (38)   (87)   (212)   (45)   (3,606)   (3,988) 
             
Net income (loss) before income taxes  14,431    5,609    23,036    1,533    (10,955)   33,654  
             
Goodwill  -    2,514    1,539    -    -    4,053  
Total assets  424,342    163,914    276,447    70,130    1,523   936,356 
Total liabilities  78,649    29,854    106,665    6,063    165,126    386,357  
Capital expenditures 21,578  5,173  14,187  9,400  -  50,338 


   Canada  United States  Australia  Total 
              
Revenue $ 179,970  $ 177,588  $ 60,462  $ 418,020  
Non-current assets (2)   368,701    137,395    122,015    628,111  


As at and for the six months ended June 30, 2023 (unaudited, in thousands of Canadian dollars)

  Contract Rentals and Compression WellCorporate Total
  Drilling Transportation and Process Servicing (1)   
  Services Services Services      
             
Revenue$136,818 $44,225 $211,248 $54,331 $- $446,622 
             
Cost of services 102,201  23,897  179,485  41,452  -  347,035 
Selling, general and administration 4,971  4,134  6,795  1,916  3,743  21,559 
Other (income) expense (288)  (7)  43  -  (194)  (446) 
Share-based compensation -  -  -  -  756  756 
Depreciation 18,527  9,717  5,237  6,289  527  40,297 
Operating income (loss) 11,407  6,484  19,688  4,674  (4,832)  37,421 
             
Gain on sale of property, plant and equipment 226  513  73  170  30  1,012 
Finance costs, net (30)  (35)  (232)  (33)  (3,169)  (3,499) 
             
Net income (loss) before income taxes 11,603  6,962  19,529  4,811  (7,971)  34,934 
             
Goodwill -  2,514  1,539  -  -  4,053 
Total assets 354,433  177,972  278,289  75,584  1,839  888,117 
Total liabilities 65,250  27,464  132,616  6,196  126,637  358,163 
Capital expenditures 31,434  4,134  2,515  4,371  -  42,454 


   Canada  United States  Australia  Total 
              
Revenue $191,384 $203,827 $51,411 $446,622 
Non-current assets (2)  395,421  128,222  47,394  571,037 

(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: 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 6 to the Company’s Condensed Interim 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 http://www.sedarplus.ca/) for a discussion of such risks and uncertainties.

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


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