Ensign Energy Services Inc. Reports 2009 Third Quarter Results
Overview
Revenue for the third quarter of 2009 was
Gross margin decreased in the third quarter of 2009 to 28.2 percent compared to 30.8 percent recorded in the third quarter of 2008. The gross margin for the nine months ended
Adjusted net income for the third quarter of 2009 was
-------------------------------------------------------------------------
FINANCIAL AND OPERATING HIGHLIGHTS
($ thousands, except per share data and operating information)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
% %
2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Revenue 232,463 435,186 (47) 858,893 1,245,144 (31)
-------------------------------------------------------------------------
EBITDA(1) 53,238 121,785 (56) 241,804 383,775 (37)
EBITDA per
share(1)
Basic $ 0.35 $ 0.80 (56) $ 1.58 $ 2.51 (37)
Diluted $ 0.35 $ 0.79 (56) $ 1.58 $ 2.48 (36)
-------------------------------------------------------------------------
Adjusted net
income(2) 16,444 61,025 (73) 109,677 192,926 (43)
Adjusted net
income per
share(2)
Basic $ 0.11 $ 0.40 (73) $ 0.72 $ 1.26 (43)
Diluted $ 0.11 $ 0.39 (72) $ 0.71 $ 1.25 (43)
-------------------------------------------------------------------------
Net income 16,900 72,071 (77) 102,798 186,129 (45)
Net income
per share
Basic $ 0.11 $ 0.47 (77) $ 0.67 $ 1.22 (45)
Diluted $ 0.11 $ 0.47 (77) $ 0.67 $ 1.20 (44)
-------------------------------------------------------------------------
Funds from
operations(3) 55,667 90,450 (38) 199,596 297,217 (33)
Funds from
operations per
share(3)
Basic $ 0.36 $ 0.59 (39) $ 1.30 $ 1.94 (33)
Diluted $ 0.36 $ 0.58 (38) $ 1.30 $ 1.92 (32)
-------------------------------------------------------------------------
Weighted average
shares - basic
(000s) 153,156 153,122 - 153,145 153,083 -
Weighted average
shares - diluted
(000s) 153,692 154,881 (1) 153,427 154,647 (1)
-------------------------------------------------------------------------
Drilling
Number of
marketed rigs
Canada
Conventional 157 169 (7) 157 169 (7)
Oil sands
coring/coal-
bed methane 28 28 - 28 28 -
United States 80 75 7 80 75 7
International(4) 49 44 11 49 44 11
Operating days
Canada 2,994 7,578 (60) 9,394 19,509 (52)
United States 2,251 5,289 (57) 7,247 15,316 (53)
International 1,567 2,458 (36) 5,391 7,421 (27)
-------------------------------------------------------------------------
Well Servicing
Number of marketed
rigs/units
Canada 112 118 (5) 112 118 (5)
United States 18 16 13 18 16 13
Operating hours
Canada 24,260 37,907 (36) 76,007 111,356 (32)
United States 8,275 10,481 (21) 24,654 27,912 (12)
-------------------------------------------------------------------------
(1) EBITDA is defined as "income before interest expense, income taxes,
depreciation and stock-based compensation expense". Management
believes that in addition to net income, EBITDA and EBITDA per share
are useful supplemental measures as they provide an indication of the
results generated by the Company's principal business activities
prior to consideration of how these activities are financed, how the
results are taxed in various jurisdictions or how the results are
impacted by the accounting standards associated with the Company's
stock-based compensation plan. EBITDA and EBITDA per share as defined
above are not recognized measures under Canadian generally accepted
accounting principles and accordingly may not be comparable to
measures used by other companies.
(2) Adjusted net income is defined as "net income before stock-based
compensation expense, tax-effected using an income tax rate of 35%".
Adjusted net income and adjusted net income per share are useful
supplemental measures as they provide an indication of the results
generated by the Company's principal business activities prior to
consideration of how the results are impacted by the accounting
standards associated with the Company's stock-based compensation
plan, net of income taxes. Adjusted net income and adjusted net
income per share as defined above are not recognized measures under
Canadian generally accepted accounting principles and accordingly
may not be comparable to measures used by other companies.
(3) Funds from operations is defined as "cash provided by operating
activities before the change in non-cash working capital". Funds from
operations and funds from operations per share are measures that
provide shareholders and potential investors with additional
information regarding the Company's liquidity and its ability to
generate funds to finance its operations. Management utilizes these
measures to assess the Company's ability to finance operating
activities and capital expenditures. Funds from operations and funds
from operations per share are not measures that have any standardized
meaning prescribed by Canadian generally accepted accounting
principles and accordingly may not be comparable to similar measures
used by other companies.
(4) Includes workover rigs.
Revenue and Oilfield Services Expense
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Revenue
Canada 80,217 193,939 (59) 313,439 562,767 (44)
United States 93,964 161,621 (42) 316,285 453,761 (30)
International 58,282 79,626 (27) 229,169 228,616 -
--------------------------------------------------------
232,463 435,186 (47) 858,893 1,245,144 (31)
Oilfield services
expense 166,884 301,233 (45) 582,674 821,412 (29)
--------------------------------------------------------
65,579 133,953 (51) 276,219 423,732 (35)
--------------------------------------------------------
Gross margin 28.2% 30.8% 32.2% 34.0%
-------------------------------------------------------------------------
Canada
------
The Company recorded revenue of
Drilling days recorded by the Canadian division in the third quarter of 2009 decreased by 60 percent from the comparable period of the prior year. During the nine months ended
United States
-------------
The Company's
The
International
-------------
The Company's international operations recorded revenue of
Drilling days recorded by the Company's international operations in the quarter ended
Depreciation
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Depreciation 24,364 33,987 (28) 76,158 89,705 (15)
-------------------------------------------------------------------------
Depreciation expense totalled
General and Administrative Expense
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
General and
administrative 12,504 13,371 (6) 39,821 42,514 (6)
% of revenue 5.4% 3.1% 4.6% 3.4%
-------------------------------------------------------------------------
General and administrative expense totaled
Stock-Based Compensation Expense
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Stock-based
compensation (701) (16,993) (96) 10,583 10,457 1
-------------------------------------------------------------------------
Stock-based compensation expense arises from the intrinsic value accounting associated with the Company's stock option plan, whereby the liability associated with stock-based compensation is adjusted for the effect of granting and vesting of employee stock options and changes in the underlying price of the Company's common shares. For the quarter-ended
Interest Expense
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Interest 138 1,458 (91) 1,064 5,402 (80)
-------------------------------------------------------------------------
Interest expense is incurred on the Company's operating lines of credit and promissory note payable, and is shown net of interest income earned on the Company's cash balances. The decrease in interest expense for the three and nine months ended
Income Taxes
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Current income
tax (5,334) 27,364 (119) 32,919 72,885 (55)
Future income tax 17,871 3,898 358 18,282 19,197 (5)
--------------------------------------------------------
12,537 31,262 (60) 51,201 92,082 (44)
--------------------------------------------------------
Effective income
tax rate (%) 42.6% 30.3% 33.2% 33.1%
-------------------------------------------------------------------------
The effective income tax rate for the third quarter of 2009 was 42.6 percent compared with 30.3 percent in the third quarter of 2008. For the nine months ended
The Company's effective income tax rate on a quarter-over-quarter basis increased due to an increase in the Canadian effective income tax rate arising from partnership timing differences and a greater proportion of taxable income being generated by the Company's
Financial Position
The following chart outlines significant changes in the consolidated balance sheet from
($ thousands) Change Explanation
-------------------------------------------------------------------------
Cash and cash equivalents 47,088 See consolidated statement of cash
flows.
Accounts receivable (161,064) Decrease due to a decrease in
operating activity levels in the
third quarter of 2009 compared with
the fourth quarter of 2008.
Inventory and other (3,665) Decrease due to normal course
consumption of operating supplies
and spare parts.
Property and equipment (63,340) Decrease due to increased
depreciation on higher-value
equipment.
Accounts payable and (108,373) Decrease due to a decrease in
accrued liabilities operating activity levels in the
third quarter of 2009 compared with
the fourth quarter of 2008.
Operating lines of credit (34,895) Decrease due to net repayments of
the operating lines of credit.
Promissory note payable (20,000) Decrease due to payment of the
promissory note in June 2009.
Stock-based compensation 2,208 Increase due to an increase in the
price of the Company's common
shares as at September 30, 2009
compared with December 31, 2008.
Income taxes payable 2,465 Increase due to the current income
tax provision for the period, net
of tax instalments.
Dividends payable 3 Increase due to a slight increase
in the number of outstanding common
shares compared with the fourth
quarter of 2008.
Future income taxes 12,100 Increase due to the current period
increase in the Canadian effective
income tax rate.
Shareholders' equity (34,489) Decrease due to the net income for
the period being offset by the
impact of foreign exchange rate
fluctuations on net assets of
foreign self-sustaining
subsidiaries and the amount of
dividends declared in the period.
-------------------------------------------------------------------------
Working Capital and Funds from Operations
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Funds from
operations 55,667 90,450 (38) 199,596 297,217 (33)
Funds from
operations per
share $ 0.36 $ 0.59 (38) $ 1.30 $ 1.94 (33)
Working
capital(1) 128,212 93,001 38 128,212 93,001 38
-------------------------------------------------------------------------
(1) Comparative figure as at December 31, 2008.
During the three months ended
The decrease in funds from operations in both the third quarter of 2009 and the nine months ended
During the third quarter of 2009, the Company increased its working capital to
Investing Activities
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Net purchase of
property and
equipment (44,870) (128,149) (65) (117,652) (206,672) (43)
Net change in
non-cash working
capital 16,306 48,845 (67) (2,558) 43,589 (106)
--------------------------------------------------------
Cash used in
investing
activities (28,564) (79,304) (64) (120,210) (163,083) (26)
-------------------------------------------------------------------------
Net purchases of property and equipment during the third quarter of 2009 totaled
Financing Activities
Three months ended Nine months ended
September 30 September 30
--------------------------------------------------------
% %
($ thousands) 2009 2008 change 2009 2008 change
-------------------------------------------------------------------------
Net increase
(decrease) in
operating lines
of credit 4,368 39,618 (89) (34,895) (3,155) 1,006
Net increase
(decrease) in
promissory note
payable - 20,000 (100) (20,000) 20,000 (200)
Issue of capital
stock 116 488 (76) 268 899 (70)
Dividends (13,019) (12,632) 3 (39,053) (37,889) 3
Net change in
non-cash working
capital 1 4 (75) 3 10 (70)
--------------------------------------------------------
Cash used in
financing
activities (8,534) 47,478 (118) (93,677) (20,135) 365
-------------------------------------------------------------------------
Net repayments of the operating lines of credit were the result of operating cash flows generated by the Company's Canadian and
Other financing activities during the third quarter of 2009 include the receipt of
The Board of Directors of the Company has declared a fourth quarter dividend of $0.0875 per common share, a three percent increase over the previous quarterly dividend rate of
New Builds
As of
The new-build delivery schedule, by geographic area, is as follows:
-------------------------------------------------------------------------
Actual Forecast
-----------------------------------------------------
Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Total
-----------------------------------------------------
ADRs
United States 1 1 1 3 2 8
International - 2 4 - - 6
-----------------------------------------------------
Total 1 3 5 3 2 14
-------------------------------------------------------------------------
Well Servicing Rigs
Canada - 1 2 1 - 4
United States 1 2 - - - 3
-----------------------------------------------------
Total 1 3 2 1 - 7
-------------------------------------------------------------------------
Outlook
The steady improvement in the price of crude oil since the start of the year and recent improvements in natural gas prices have created some sense of optimism within the industry that has been absent throughout most of 2009. However, it appears that many of the Company's customers share Ensign's skepticism with respect to the current level of commodity prices as there has not yet been a meaningful increase in demand for oilfield services. The North American oilfield services industry remains challenged by too much equipment chasing too little work. Even the international market is stagnant, at best, as various regions cope with specific geopolitical issues that are holding back levels of development of oil and natural gas resources. The Company does not expect demand for oilfield services to improve until global economic conditions improve in a way that meaningfully influences the underlying fundamentals of oil and natural gas supply and demand. There currently appears to be an ample supply of both commodities to meet expected short term demand and until that changes, the Company generally expects future activity levels to bump along at current historically low levels of activity.
The upcoming Canadian 2009/10 winter drilling season will, at best, meet the levels of the 2008/09 winter drilling season. Bookings are currently behind the levels of one year ago and although prices are expected to improve modestly for the winter drilling season, overall pricing will be lower than the rates of last winter. The bright spots for the Canadian market remain the Bakken play in southeast Saskatchewan, the Montney and Horn River shale plays in northeast British Columbia and the ongoing development in the various heavy oil markets of western
The land drilling rig count in the
International operations are expected to improve through 2010 as currently weak areas begin to turn around. Notably,
It is difficult to be optimistic given all of the uncertainty around the fundamentals influencing the supply and demand for crude oil and natural gas. While there have been some encouraging signs, the Company believes that a meaningful industry recovery is still a ways off. Accordingly, it remains prudent to continue to control costs and preserve cash. Ensign has a very strong balance sheet that will enable it to succeed and grow in this very challenging market. The Company's enviable financial position clearly puts it in control of its destiny. Not many others in the oilfield services industry can make that claim.
Risks and Uncertainties
This document contains forward-looking statements based upon current expectations that involve a number of business risks and uncertainties. The factors that could cause results to differ materially include, but are not limited to, political and economic conditions, crude oil and natural gas prices, foreign currency fluctuations, weather conditions and the ability of oil and natural gas companies to raise capital or other unforeseen conditions which could impact on the use of the services supplied by the Company.
Conference Call
A conference call will be held to discuss the Company's third quarter results at
CONSOLIDATED BALANCE SHEETS
As at September 30, 2009 and December 31, 2008
(Unaudited, in thousands of Canadian dollars)
September 30 December 31
2009 2008
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 142,993 $ 95,905
Accounts receivable 199,422 360,486
Inventory and other 57,159 60,824
Future income taxes 1,687 1,040
---------------------------
401,261 518,255
Property and equipment 1,647,241 1,710,581
---------------------------
$ 2,048,502 $ 2,228,836
---------------------------
---------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 127,711 $ 236,084
Operating lines of credit 134,548 169,443
Current portion of stock-based compensation 6,156 3,538
Income taxes payable (8,385) (10,850)
Dividends payable 13,019 13,016
---------------------------
273,049 411,231
Promissory note payable - 20,000
Stock-based compensation 693 1,103
Future income taxes 258,098 245,351
---------------------------
531,840 677,685
---------------------------
Shareholders' Equity
Capital stock (note 3) 169,903 169,485
Accumulated other comprehensive loss (100,235) (1,583)
Retained earnings 1,446,994 1,383,249
---------------------------
1,516,662 1,551,151
---------------------------
$ 2,048,502 $ 2,228,836
---------------------------
---------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the three and nine months ended September 30, 2009 and 2008
(Unaudited, in thousands of Canadian dollars - except per share data)
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------
Revenue
Oilfield services $ 232,463 $ 435,186 $ 858,893 $ 1,245,144
Expenses
Oilfield services 166,884 301,233 582,674 821,412
Depreciation 24,364 33,987 76,158 89,705
General and
administrative 12,504 13,371 39,821 42,514
Stock-based
compensation (701) (16,993) 10,583 10,457
Interest 138 1,458 1,064 5,402
Other (163) (1,203) (5,406) (2,557)
-------------------------------------------------------
203,026 331,853 704,894 966,933
-------------------------------------------------------
Income before
income taxes 29,437 103,333 153,999 278,211
Income taxes
Current (5,334) 27,364 32,919 72,885
Future 17,871 3,898 18,282 19,197
-------------------------------------------------------
12,537 31,262 51,201 92,082
-------------------------------------------------------
Net income for the
period 16,900 72,071 102,798 186,129
Retained earnings
- beginning of
period 1,443,113 1,262,996 1,383,249 1,174,195
Dividends (note 3) (13,019) (12,632) (39,053) (37,889)
-------------------------------------------------------
Retained earnings
- end of period $ 1,446,994 $ 1,322,435 $ 1,446,994 $ 1,322,435
-------------------------------------------------------
-------------------------------------------------------
Net income per
share (note 3)
Basic $ 0.11 $ 0.47 $ 0.67 $ 1.22
Diluted $ 0.11 $ 0.47 $ 0.67 $ 1.20
-------------------------------------------------------
-------------------------------------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and nine months ended September 30, 2009 and 2008
(Unaudited, in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------
Cash provided by
(used in)
Operating activities
Net income for
the period $ 16,900 $ 72,071 $ 102,798 $ 186,129
Items not
affecting cash:
Depreciation 24,364 33,987 76,158 89,705
Stock-based
compensation,
net of cash
paid (3,468) (19,506) 2,358 2,186
Future income taxes 17,871 3,898 18,282 19,197
-------------------------------------------------------
Cash provided by
operating
activities before
the change in
non-cash working
capital 55,667 90,450 199,596 297,217
Net change in
non-cash working
capital (note 5) (40,562) (67,669) 61,379 (91,254)
-------------------------------------------------------
15,105 22,781 260,975 205,963
-------------------------------------------------------
Investing activities
Net purchase of
property and
equipment (44,870) (128,149) (117,652) (206,672)
Net change in
non-cash working
capital (note 5) 16,306 48,845 (2,558) 43,589
-------------------------------------------------------
(28,564) (79,304) (120,210) (163,083)
-------------------------------------------------------
Financing activities
Net increase
(decrease) in
operating lines of
credit 4,368 39,618 (34,895) (3,155)
Net increase
(decrease) in
promissory note
payable - 20,000 (20,000) 20,000
Issue of capital stock 116 488 268 899
Dividends (note 3) (13,019) (12,632) (39,053) (37,889)
Net change in
non-cash working
capital (note 5) 1 4 3 10
-------------------------------------------------------
(8,534) 47,478 (93,677) (20,135)
-------------------------------------------------------
(Decrease) Increase
in cash and cash
equivalents during
the period (21,993) (9,045) 47,088 22,745
Cash and cash
equivalents -
beginning of period 164,986 33,730 95,905 1,940
-------------------------------------------------------
Cash and cash
equivalents - end
of period $ 142,993 $ 24,685 $ 142,993 $ 24,685
-------------------------------------------------------
-------------------------------------------------------
Supplemental
information
Interest paid $ 372 $ 1,521 $ 1,789 $ 5,585
Income taxes
paid $ 6,831 $ 17,794 $ 30,454 $ 93,027
-------------------------------------------------------
-------------------------------------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three and nine months ended September 30, 2009 and 2008
(Unaudited, in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------
Net income for
the period $ 16,900 $ 72,071 $ 102,798 $ 186,129
Other comprehensive
income (loss)
Foreign currency
translation
adjustment (61,719) (11,800) (98,652) 29,292
-------------------------------------------------------
Comprehensive (loss)
income for
the period $ (44,819) $ 60,271 $ 4,146 $ 215,421
-------------------------------------------------------
-------------------------------------------------------
See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE LOSS
For the three and nine months ended September 30, 2009 and 2008
(Unaudited, in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------
Accumulated other
comprehensive loss
- beginning of
period $ (38,516) $ (56,496) $ (1,583) $ (97,588)
Foreign currency
translation
adjustment (61,719) (11,800) (98,652) 29,292
-------------------------------------------------------
Accumulated other
comprehensive loss
- end of period $ (100,235) $ (68,296) $ (100,235) $ (68,296)
-------------------------------------------------------
-------------------------------------------------------
See accompanying notes to the consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2009 and 2008
(Unaudited, in thousands of Canadian dollars, except share and per share
data)
The interim consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles
("Canadian GAAP"), and include the accounts of Ensign Energy Services
Inc. and its subsidiaries and partnerships (the "Company"), substantially
all of which are wholly-owned. The interim consolidated financial
statements have been prepared following the same accounting policies and
methods of computation as the consolidated financial statements for the
year ended December 31, 2008. The disclosures provided below are
incremental to those included with the annual consolidated financial
statements. These interim consolidated financial statements should be
read in conjunction with the consolidated financial statements and the
notes thereto in the Company's annual report for the year ended
December 31, 2008.
1. Recent accounting pronouncements
The Canadian Institute of Chartered Accountants ("CICA") Accounting
Standards Board ("AcSB") confirmed in February 2008 that International
Financial Reporting Standards ("IFRS") will replace Canadian GAAP in
2011 for profit-oriented Canadian publicly accountable enterprises.
As the Company will be required to report its results in accordance
with IFRS starting in 2011, the Company is assessing the potential
impacts of this changeover and developing its plan accordingly. When
finalized, it will include project structure and governance,
resourcing and training, and an analysis of key differences between
IFRS and Canadian GAAP.
As of January 1, 2011, the Company will be required to adopt the
following CICA Handbook sections:
(a) CICA Handbook Section 1582 "Business Combinations" will replace
the existing business combinations standard. The new standard
requires assets and liabilities acquired in a business combination
and contingent consideration to be measured at fair value as at
the date of the acquisition. Acquisition costs that are currently
capitalized as part of the purchase price will be recognized in
the consolidated statement of income. The adoption of this
standard will impact the accounting treatment of future business
combinations.
(b) CICA Handbook Section 1601 "Consolidated Financial Statements"
and Section 1602 "Non-controlling Interests" will replace the
former consolidated financial statements standard. These standards
establish the requirements for the preparation of consolidated
financial statements and the accounting for a non-controlling
interest (previously referred to as minority interest) in a
subsidiary. The new standard requires non-controlling interest to
be presented as a separate component of equity and requires net
income and other comprehensive income to be attributed to both the
parent and non-controlling interest. The adoption of this standard
is not expected to have a material impact on the Company's
consolidated financial statements.
2. Seasonality of operations
The Company's Canadian oilfield services operations are seasonal in
nature and are impacted by weather conditions that may hinder the
Company's ability to access locations or move heavy equipment. The
lowest activity levels are experienced during the second quarter of
the year when road weight restrictions are in place and access to
wellsites in Canada is reduced.
3. Capital Stock
Authorized
Unlimited common shares
Unlimited preferred shares, issuable in series
Outstanding
Number of
Common Shares Amount
----------------------------------------------------------------------
Balance at January 1, 2009 153,135,006 $ 169,485
Issued under employee stock option plan 25,500 418
----------------------------------------------------------------------
Balance at September 30, 2009 153,160,506 $ 169,903
----------------------------------------------------------------------
Options
A summary of the status of the Company's stock option plan as of
September 30, 2009, and the changes during the nine-month period then
ended, is presented below:
Number of Weighted Average
Options Exercise Price
----------------------------------------------------------------------
Outstanding at January 1, 2009 10,445,962 $ 18.09
Granted 11,000 11.33
Exercised for shares (25,500) (10.50)
Exercised for cash (1,361,572) (10.69)
Forfeited (117,600) (21.45)
----------------------------------------------------------------------
Outstanding at September 30, 2009 8,952,290 $ 19.19
----------------------------------------------------------------------
Exercisable at September 30, 2009 4,417,790 $ 17.83
----------------------------------------------------------------------
Options Outstanding Options Exercisable
----------------------------------------------------------------------
Average Weighted Weighted
Vesting Average Average
Options Remaining Exercise Options Exercise
Exercise Price Outstanding (in years) Price Exercisable Price
----------------------------------------------------------------------
$9.45 to $11.33 723,590 0.06 $ 10.52 712,590 $ 10.51
$13.50 to $18.85 1,792,100 0.86 14.17 1,174,600 13.89
$19.88 to $23.33 6,436,600 1.90 21.56 2,530,600 21.72
----------------------------------------------------------------------
8,952,290 1.54 $ 19.19 4,417,790 $ 17.83
----------------------------------------------------------------------
Common share dividends
During the nine months ended September 30, 2009, the Company declared
dividends of $39,053 (2008 - $37,889), being $0.2550 per common share
(2008 - $0.2475 per common share).
Net income per share
Net income per share is calculated by dividing net income by the
weighted average number of common shares outstanding during the
period. Diluted net income per share is calculated using the treasury
stock method, which assumes that all outstanding stock options are
exercised, if dilutive, and the assumed proceeds are used to purchase
the Company's common shares at the average market price during the
period.
The weighted average number of common shares outstanding for the nine
months ended September 30, 2009 and 2008 are as follows:
2009 2008
------------ ------------
Weighted average number of common
shares outstanding - basic 153,145,021 153,083,329
Weighted average number of common
shares outstanding - diluted 153,426,523 154,646,906
------------ ------------
Stock options of 6,735,100 (2008 - 4,390,000) were excluded from the
calculation of diluted weighted average number of common shares
outstanding, as the options' exercise price was greater than the
average market price of the common shares for the period.
4. Segmented information
The Company operates in three geographic areas within one industry
segment. Oilfield services are provided in Canada, the United States
and internationally. The amounts related to each geographic area are
as follows:
Three months ended September 30, 2009
----------------------------------------------------------------------
Canada United States International Total
----------------------------------------------------------------------
Revenue $80,217 $93,964 $58,282 $232,463
Property and
equipment, net $806,058 $500,551 $340,632 $1,647,241
Capital
expenditures, net $6,563 $28,081 $10,226 $44,870
Depreciation $11,801 $7,563 $5,000 $24,364
----------------------------------------------------------------------
Three months ended September 30, 2008
----------------------------------------------------------------------
Canada United States International Total
----------------------------------------------------------------------
Revenue $193,939 $161,621 $79,626 $435,186
Property and
equipment, net $765,665 $453,479 $356,763 $1,575,907
Capital
expenditures, net $3,980 $56,526 $67,643 $128,149
Depreciation $18,348 $8,109 $7,530 $33,987
----------------------------------------------------------------------
Nine months ended September 30, 2009
----------------------------------------------------------------------
Canada United States International Total
----------------------------------------------------------------------
Revenue $313,439 $316,285 $229,169 $858,893
Property and
equipment, net $806,058 $500,551 $340,632 $1,647,241
Capital
expenditures, net $7,774 $74,110 $35,768 $117,652
Depreciation $35,637 $24,170 $16,351 $76,158
----------------------------------------------------------------------
Nine months ended September 30, 2008
----------------------------------------------------------------------
Canada United States International Total
----------------------------------------------------------------------
Revenue $562,767 $453,761 $228,616 $1,245,144
Property and
equipment, net $765,665 $453,479 $356,763 $1,575,907
Capital
expenditures, net $9,489 $85,706 $111,477 $206,672
Depreciation $46,176 $22,035 $21,494 $89,705
----------------------------------------------------------------------
5. Supplemental disclosure of cash flow information
The net change in non-cash working capital for the three and nine
months ended September 30, 2009 and 2008 is determined as follows:
Three months ended Nine months ended
September 30 September 30
-------------------------------------------
2009 2008 2009 2008
-------------------------------------------
Net change in non-cash
working capital
Accounts receivable $(8,440) $(63,440) $161,064 $(45,216)
Inventory and other 2,827 1,576 3,665 (649)
Accounts payable and
accrued liabilities (6,478) 33,469 (108,373) 18,342
Income taxes payable (12,165) 9,571 2,465 (20,142)
Dividends payable 1 4 3 10
-------------------------------------------
$(24,255) $(18,820) $ 58,824 $(47,655)
-------------------------------------------
Relating to
Operating activities $(40,562) $(67,669) $61,379 $(91,254)
Investing activities 16,306 48,845 (2,558) 43,589
Financing activities 1 4 3 10
-------------------------------------------
$(24,255) $(18,820) $58,824 $(47,655)
-------------------------------------------
6. Prior period amounts
Certain prior period amounts have been reclassified to conform to the
current period's presentation.
%SEDAR: 00001999E
For further information: Glenn Dagenais, Executive Vice President Finance and Chief Financial Officer, (403) 262-1361
Share this article