(via Thenewswire.ca)
Edmonton, Canada / TheNewswire / August 19, 2015 - Intercept Energy Services Inc. ("IES" or the "Corporation") (TSX-V: IES / OTCBB: IESCF), a leading Oilfield Services Firm ("OSF") specializing in frac water heating, unconventional energy extraction, oilfield equipment, oilfield waste disposal and recovery of reusable products from waste, today reported financial results for the second quarter ended June 30, 2015.
Second Quarter Ended June 30, 2015 Highlights
-
-Gross revenues were higher by 114 percent to $1.1 million compared to $0.5 million for the same quarter last year and were higher by 19 percent to $2.2 million compared to $1.9 million on a year to date basis, due to increase in number of Heating Units in operation in 2015 and also additional revenues generated during the second quarter of 2015 on acquisition of 640 Energy by managing a water depot and a disposal well;
-The Company successfully completed the acquisition of 640 Energy Inc. on April 1, 2015 after receiving all necessary regulatory approvals in exchange for 13 million Common Shares of the Corporation. 640 Energy Inc, now operates as a fully owned subsidiary of the Corporation effective April 1, 2015;
-Net loss before other items for the quarter ended June 30, 2015 decreased to $0.5 million compared to a net loss before other items of $0.8 million for the same quarter last year due to increase in revenues during the quarter. Net loss before other items was $1.4 million compared to $1.1 million on a year to date basis compared to the same period last year, mainly due to increase in overall operation costs in first quarter of 2015.
Net loss for the quarter ended June 30, 2015 was $0.2 million compared to a net loss of $0.2 million for the same quarter last year and net loss was $1.9 million compared to $1.3 million on a year to date basis compared to the same period last year, mainly due to increase in overall operating costs in first quarter of 2015 and increase in finance expense on a year to date basis.
Commenting on second quarter ended June 30, 2015 results, Mr. Swapan Kakumanu, IES Chief Financial Officer stated, "Although our second quarter results showed continued growth, there is ongoing pressure on revenues and cost of operations, especially due to the continued slowdown in oil and gas activities in the regions we currently operate. The Company continues to explore and take necessary steps to generate alternate revenue streams in addition to the traditional Heating Unit operations. The recent acquisition of 640 Energy Inc. is a result of one of such initiatives to expand the revenue streams beyond Heating Units and generate revenues by managing a water depot and a disposal well in the USA under an agreement with 640 Energy Inc. We expect to see continued pressure on our charge out rates on our Heating Units during the remainder of 2015. Having closed a private placement of $1 million in the first quarter of 2015, and the acquisition of 640 Energy Inc. in the second quarter of 2015, the Corporation is working on a plan to sustain and grow over the remainder of 2015 and manage its working capital during this process."
The following pages are taken from the Completed Financial Statements and are available through SEDAR at http://sedar.com or on the Company's website.
page 2 of 6
June 30, 2015 condensed interim consolidated financial statements
INTERCEPT ENERGY SERVICES INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars - Unaudited)
| |
|
June 30
2015
Unaudited
|
December 31,
2014
Audited
|
| |
|
|
|
|
ASSETS
|
|
|
|
| |
|
|
|
|
Current assets
|
|
|
|
|
Cash
|
|
$ 2,036,172
|
$ 109,577
|
|
Trade and other receivables
|
|
1,641,308
|
3,251,976
|
|
Prepaids and deposits
|
|
170,136
|
37,113
|
|
Total current assets
|
|
3,847,616
|
3,398,666
|
| |
|
|
|
|
Non-current assets
|
|
|
|
|
Equipment
|
|
6,430,535
|
3,446,677
|
|
Goodwill
|
|
95,237
|
-
|
|
Total non-current assets
|
|
6,525,772
|
3,446,677
|
|
TOTAL ASSETS
|
|
$ 10,373,388
|
$ 6,845,343
|
| |
|
|
|
|
LIABILITIES
|
|
|
|
| |
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
$ 4,060,677
|
$ 2,922,406
|
|
Current portion of loans and borrowings
|
|
887,184
|
830,693
|
|
Current portion of finance lease obligations
|
|
710,832
|
346,465
|
|
Current portion of derivative liability
|
|
31,195
|
42,311
|
|
Total current liabilities
|
|
5,689,888
|
4,141,875
|
| |
|
|
|
|
Non-current liabilities
|
|
|
|
|
Loans and borrowings
|
|
353,163
|
340,702
|
|
Finance lease obligations
|
|
4,538,927
|
2,031,376
|
|
Derivative liability
|
|
52,405
|
38,460
|
|
Total long term liabilities
|
|
4,944,495
|
2,410,538
|
|
TOTAL LIABILITIES
|
|
10,634,383
|
6,552,413
|
| |
|
|
|
|
SHAREHOLDERS' (DEFICIENCY) EQUITY
|
|
|
|
|
Share capital
|
|
12,469,885
|
11,554,885
|
|
Contributed surplus
|
|
6,460,349
|
6,078,559
|
|
Deficit
|
|
(19,191,229)
|
(17,340,514)
|
|
TOTAL (DEFICIENCY) EQUITY
|
|
(260,995)
|
292,930
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$ 10,373,388
|
$ 6,845,343
|
page 3 of 6
INTERCEPT ENERGY SERVICES INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian dollars - Unaudited)
| |
|
Three months ended
June 30,
|
Three months ended
June 30,
|
Six months ended
June 30,
|
Six months ended
June 30,
|
| |
|
2015
|
2014
|
2015
|
2014
|
|
REVENUE
|
|
|
|
|
|
|
Rental and management fee income
|
|
$ 1,071,224
|
$ 501,190
|
$ 2,230,497
|
$ 1,866,536
|
|
EXPENSES
|
|
|
|
|
|
|
Consulting fees
|
|
116,857
|
68,817
|
319,308
|
196,058
|
|
Depreciation
|
|
190,164
|
198,987
|
366,221
|
343,281
|
|
Equipment maintenance and rental
|
|
162,645
|
132,737
|
301,124
|
182,779
|
|
Fuel and sundry direct operating costs
|
|
313,889
|
159,346
|
682,739
|
746,413
|
|
Occupancy costs
|
|
38,559
|
38,808
|
128,718
|
82,910
|
|
Office and sundry
|
|
125,835
|
53,846
|
267,679
|
103,155
|
|
Professional fees
|
|
59,730
|
143,802
|
140,301
|
210,816
|
|
Royalties
|
|
71,336
|
70,524
|
179,392
|
287,607
|
|
Salaries and wages
|
|
347,467
|
336,300
|
882,541
|
698,461
|
|
Share based compensation
|
|
13,357
|
10,465
|
21,790
|
43,654
|
|
Travel, marketing and conferences
|
|
43,926
|
35,962
|
82,690
|
69,129
|
|
Allowance for doubtful debts
|
|
69,337
|
-
|
416,518
|
-
|
|
Foreign exchange (gain) loss
|
|
26,999
|
8,614
|
(120,494)
|
8,614
|
| |
|
1,580,101
|
1,258,208
|
3,668,527
|
2,972,877
|
| |
|
|
|
|
|
|
Loss before other items
|
|
(508,877)
|
(757,018)
|
(1,438,030)
|
(1,106,341)
|
| |
|
|
|
|
|
|
OTHER ITEMS
|
|
|
|
|
|
|
Gain (loss) on derivative liability
|
|
2,070
|
(14,487)
|
(12,186)
|
(15,301)
|
|
Finance expense
|
|
(213,786)
|
(149,668)
|
(400,499)
|
(217,800)
|
| |
|
(211,716)
|
(164,155)
|
(412,685)
|
(233,101)
|
|
Net loss and total comprehensive loss for the period
|
|
$ (720,593)
|
$ (921,173)
|
$ (1,850,715)
|
$ (1,339,442)
|
|
Basic and diluted loss per common share
|
|
$ (0.00)
|
$ (0.01)
|
$ (0.01)
|
$ (0.01)
|
| |
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
141,478,579
|
109,873,310
|
149,323,882
|
109,583,164
|
page 4 of 6
INTERCEPT ENERGY SERVICES INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIENCY) EQUITY
(Expressed in Canadian dollars - Unaudited)
| |
Share Capital Number of shares
|
Share Capital
Amount
|
Contributed surplus
|
Deficit
|
Total
|
| |
|
|
|
|
|
|
Balance at December 31, 2013
|
109,289,794
|
$ 11,117,213
|
$ 5,646,571
|
$(18,398,509)
|
$ (1,634,725)
|
| |
|
|
|
|
|
|
Bonus shares issued
|
900,000
|
30,490
|
-
|
-
|
30,490
|
|
Share based compensation
|
-
|
-
|
43,654
|
-
|
43,654
|
|
Net income and comprehensive income for the period
|
-
|
-
|
-
|
(1,339,442)
|
(1,339,442)
|
| |
|
|
|
|
|
|
Balance at June 30, 2014
|
110,189,794
|
$11,147,703
|
$5,690,225
|
$(19,737,951)
|
$(2,900,023)
|
| |
|
|
|
|
|
|
Balance at December 31, 2014
|
122,859,794
|
$ 11,554,885
|
$ 6,078,559
|
$ (17,340,514)
|
$ 292,930
|
| |
|
|
|
|
|
|
Private placement (Note 11(v))
|
20,000,000
|
1,000,000
|
-
|
-
|
1,000,000
|
|
Warrants (Note 11(v))
|
-
|
(360,000)
|
360,000
|
-
|
-
|
|
Share issue costs (Note 11(v))
|
-
|
(50,000)
|
-
|
-
|
(50,000)
|
|
Issued on acquisition of 640 Energy Inc. (Note 4)
|
13,000,000
|
325,000
|
-
|
-
|
325,000
|
|
Share based compensation
|
-
|
-
|
21,790
|
-
|
21,790
|
|
Net income and comprehensive income for the period
|
-
|
-
|
-
|
(1,850,715)
|
(1,850,715)
|
| |
|
|
|
|
|
|
Balance at June 30, 2015
|
155,859,794
|
$ 12,469,885
|
$ 6,460,349
|
$ (19,191,229)
|
$ (260,995)
|
| |
|
|
|
|
|
| |
|
|
|
|
|
page 5 of 6
INTERCEPT ENERGY SERVICES INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars - Unaudited)
| |
|
Three months ended
|
Three months ended
|
Six months ended
|
Six months ended
|
| |
June 30, 2015
|
June 30, 2014
|
June 30, 2015
|
June 30, 2014
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income (loss) and comprehensive income (loss)
|
|
$ (720,593)
|
$ (921,173)
|
$ (1,850,715)
|
$ (1,339,442)
|
|
Add back (deduct) items not involving cash
|
|
|
|
|
|
|
Accretion
|
|
6,444
|
5,562
|
12,461
|
15,419
|
|
Depreciation
|
|
190,164
|
198,987
|
366,221
|
343,281
|
|
Non cash portion of (gain) loss on derivative
liability
|
|
(2,070)
|
16,115
|
12,186
|
15,301
|
|
Share based compensation
|
|
13,357
|
10,465
|
21,790
|
43,654
|
| |
|
(512,698)
|
(690,044)
|
(1,438,057)
|
(921,787)
|
|
Changes in non-cash working capital items:
|
|
|
|
|
|
|
Trade and other receivables
|
|
4,196,222
|
421,046
|
4,998,754
|
(122,217)
|
|
Prepaids and deposits
|
|
23,469
|
(9,115)
|
31,830
|
(17,456)
|
|
Inventory
|
|
-
|
-
|
-
|
(11,816)
|
|
Trade and other payables
|
|
(3,121,456)
|
143,684
|
(2,555,516)
|
944,109
|
| |
|
1,098,235
|
555,615
|
2,475,068
|
792,620
|
|
Net cash generated (used) in operating activities
|
|
585,537
|
(134,429)
|
1,037,011
|
(129,167)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
Acquisition of equipment
|
|
(533,940)
|
(11,120)
|
(533,940)
|
(30,002)
|
|
Net cash generated (used) in investing activities
|
|
(533,940)
|
(11,120)
|
(533,940)
|
(30,002)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
Proceeds from issuance of shares
|
|
-
|
-
|
1,000,000
|
-
|
|
Share issue costs
|
|
-
|
-
|
(50,000)
|
-
|
|
Cash received on acquisition of 640 Energy
|
|
188,973
|
-
|
188,973
|
-
|
|
Loans and borrowings
|
|
28,380
|
201,066
|
56,491
|
448,631
|
|
Loans and borrowings repayments
|
|
-
|
2,571
|
-
|
-
|
|
Derivative liability
|
|
(5,238)
|
(21,628)
|
(9,357)
|
(31,118)
|
|
Finance leases
|
|
395,000
|
-
|
395,000
|
-
|
|
Finance leases repayments
|
|
(80,591)
|
(93,996)
|
(157,583)
|
(266,228)
|
|
Net cash generated (used) in financing activities
|
|
526,524
|
88,013
|
1,423,524
|
151,285
|
|
Net increase in cash for the period
|
|
578,121
|
(57,536)
|
1,926,595
|
(7,884)
|
|
Cash, beginning of period
|
|
1,458,051
|
58,497
|
109,577
|
8,845
|
|
Cash, end of period
|
|
$ 2,036,172
|
$ 961
|
$ 2,036,172
|
$ 961
|
page 6 of 6
About Intercept Energy Services Inc. ("IES")
Intercept Energy Services Inc. employs innovative and proprietary technology to provide the highest efficiency heated water, used by oil and gas exploration and production companies in the fracturing process in Canada and the United States. Through the utilization of HE Heaters(TM), IES is able to reduce fuel consumption and emissions, enhance safety and productivity and enable extreme cold weather operations with significantly lower operating costs that result in a direct competitive advantage for its customers. For more information, visit http://InterceptES.com
IES is based in Edmonton, Alberta, Canada.
For more information, visit the IES website: www.InterceptES.com
Contacts:
Mr. Keith Morlock Mr. Swapan Kakumanu
President & Chief Operating Officer Chief Financial Officer
1.877.975.0558 1.877.975.0558
kmorlock@Interceptes.com skakumanu@Interceptes.com
Media:
Ms. Julie Shepherd
Accentuate PR
1.973.331.9063
julie@accentuatepr.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.
Forward-looking statements
Certain information regarding IES in this news release, including management's assessment of its future development plans and access to various external sources of capital, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with heating technology and oilfield services operations, general risks associated with oil and gas exploration, development, production, marketing and disposal of waste, loss of markets, environmental risks, competition from other service providers, delays resulting from inability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect IES's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements or information contained in this news release are made as of the date hereof and IES does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Copyright (c) 2015 TheNewswire - All rights reserved.