Pacific Oil & Gas Limited wholly-owned subsidiary Woodfibre LNG has signed a binding LNG Sales and Purchase Agreement (SPA) with BP Gas Marketing Limited, a wholly-owned indirect subsidiary of BP Plc, for the delivery of liquefied natural gas (LNG) from PO&G's Woodfibre LNG export facility in Squamish, British Columbia.
Vertex Resource Group Ltd. reports its financial and operational results for the fourth quarter and year ending December 31, 2018. The results for the three months and year ending December 31, 2018 were highlighted by improvements in revenue, gross profit, EBITDA and net income as compared to the corresponding periods of 2017. Net income increased as a result of improved EBITDA and the bargain purchase gain from the three acquisitions completed in 2018 (which are discussed in more details in the MD&A and the Company's Annual Information Form filed on SEDAR at www.sedar.com), offset by increases in amortization and finance costs.
For two consecutive years, Vertex finished the year on a positive note, with the results for 2018 surpassing both 2017 and 2016. Positive trends in revenue, gross profit, EBITDA and net income were achieved even though the Company faced headwinds in the fourth quarter of 2018 from a drop-in commodity prices, increased differential in WCS-WTI and the curtailment of production that led to decreased activity levels from oil and gas customers in the fourth quarter of 2018. Vertex successfully completed three complimentary and opportunistic acquisitions during 2018 and refinanced its debt at a lower cost of borrowing which contributed to the positive results. Vertex continued to integrate and improve equipment utilization from its acquisitions in 2018 through cross-selling opportunities across service lines, continued geographical and industry expansion, as well as through reducing redundant costs where possible. Vertex's efforts to expand its service offerings and geographic footprint yielded positive increases in utilization rates in both people and equipment. Vertex continues to focus on efficiently managing the costs of the business and diversifying its services, product offerings and customer base both in geography and industry. These efforts should continue to improve performance and the financial position of the Company in order to capitalize on strategic growth initiatives. As commodity prices stabilized in first nine months of 2018, Vertex invested in the Company, diversified the business and generated positive operational results.
Highlights for the fourth quarter of 2018 compared to the fourth quarter of 2017 and the year ending December 31, 2018 as compared to the year ending December 31, 2017 were:
Revenue increased by $10.8 million to $46.6 million, up 30.2% in the fourth quarter of 2018 from $35.8 million for the same quarter in 2017. Revenue increased by $32.0 million to $150.4 million, up 27.0% in year ending December 31, 2018 as compared to $118.4 million for 2017. This growth is attributable to gains related to the successful cross-selling of services with existing customers and acquisitions completed within the Company's Environmental Services segment. Increases to revenue can also be attributed to the continued focus of Vertex on cross-selling strategies across customers and industries that resulted in additional utilization of people and equipment within the Environmental Services segment. These gains were offset by expected revenue reductions within Vertex's Industrial Services Segment.
Gross profit for the fourth quarter of 2018 was $12.0 million, up 41.1% or $3.5 million from $8.5 million in the same quarter of 2017. Gross profit for 2018 increased to $40.5 million, up 25.4% or $8.2 million from 2017. Gross profit as a percentage of revenue ("gross profit margin") improved to 25.8% in the fourth quarter of 2018 versus 23.8% in the fourth quarter of 2017. The increased gross profit is due to improved utilization of people and equipment, steady focus on cost management and positive contributions from acquisitions. Despite improvements in gross profit margin in the fourth quarters, gross profit margin was slightly down in 2018 to 26.9% as compared to 27.3% in 2017. The slight reduction in gross profit margins year over year, is largely the effect the revenue mix. Vertex is dedicated to improving margins of acquired companies during the year with increased equipment utilization, cost cutting initiatives and streamlining operations. The Industrial Services segment experienced a slight increase in gross profit margins due to the Company focusing on higher margin work.
General and administrative costs ("G&A") increased by 32.6% or $1.5 million to $6.1 million in the fourth quarter of 2018, from $4.6 million in the fourth quarter of 2017. As a percentage of revenue, G&A was up slightly to 13.1% in the fourth quarter of 2018 from 12.8% in the fourth quarter of 2017. G&A increased by 18.6% or $3.1 million to $19.9 million for the year ending December 31 2018, from $16.8 million in 2017. Vertex added staff, new locations and service offerings in Manitoba, Saskatchewan and Alberta due to five acquisitions completed over the past fifteen months. As a percentage of revenue, G&A was down to 13.2% in 2018 versus 14.2% in 2017. Vertex continues to integrate acquisitions and continues to manage G&A costs closely.
EBITDA for the fourth quarter increased by $2.1 million or 51.0% to $5.9 million compared to the same quarter in 2017. EBITDA was $20.6 million in 2018, up 32.7% or $5.1 million from 2017. This increase was due to positive contributions from acquisitions and improved utilization of people and equipment.
Net loss for the fourth quarter of 2018 decreased by $2.1 million or 125.2%, to income of $0.4 million, from a loss of $1.7 million in the fourth quarter of 2017. The loss improved given increased EBITDA and a further gain on bargain purchase offset by the impact of additional amortization expense from recently acquired businesses. Vertex's 2018 net income and comprehensive income improved significantly compared to 2017. Net income for 2018 was $1.4 million or $0.02 per share compared to a net loss of $2.9 million in 2017 or a loss of $0.04 per share.
Cash provided by operating activities increased by $10.4 million to $9.4 million for 2018, from cash used in operating activities of $1.0 million in 2017. A majority of this increase in cash provided from operating activities was due to higher revenue and EBITDA.
The Company restructured its Credit Facilities in the second quarter of 2018 to provide greater financial flexibility to facilitate Vertex in continuing to pursue acquisitions and organic growth opportunities and lower cost of borrowing.
Headed into the first half of 2019, Vertex is well positioned to withstand short term economic pains related to volatile commodity prices and negative investment sentiment in western Canada. This view is based on Vertex's current financial position, strong backlog of $121 million from diverse industries, longstanding customer relationships, and contributions of past, prudently purchased acquisitions which are performing well. Almost 50% of Vertex's backlog is from outside the oil and gas industry.
The nine complementary acquisitions completed throughout the last eighteen months are now positively adding to the Company's financial position. These acquisitions allow Vertex to cross utilize people and equipment to service its existing customer base, expand geographically and continue to develop new customers outside the oil and gas industry by offering integrated environmental solutions.
Vertex continues to be impacted negatively by commodity price volatility, take away capacity, geopolitical factors and investment uncertainty within the oil and gas industry. Vertex expects to be negatively impacted, in certain segments, for at least the first half of 2019 given some uncertainly around Canadian oil price differentials, related production curtailments, reduced capital budgets of its customers, and associated reductions in drilling and completions activities within western Canada. Also, Vertex expects to continue to face pricing and margin pressure in 2019 because of the negative effects on customer's budgets and cash flows. Vertex is however, seeing additional opportunities in 2019 with increased customer spending on planned maintenance programs, increased activity levels for abandonments and active environmental liability management. In addition, new regulations for emissions testing and reporting will continue to grow Vertex's revenue for this service line.
Vertex continues to grow our customer base, with 47% of revenues for 2019 expected to come from outside of the oil and gas industry. Specifically, Vertex customers continue to grow and provide stable opportunities in the utilities, agriculture, municipalities and telecommunications industries. Vertex continues to focus on addressing the demands of its diversified customer base and addressing opportunities to capitalize directly within their operating and maintenance budgets.
Vertex will continue to focus on growing its business organically, achieving efficiencies, improving margins where possible and cost reductions throughout its business segments. Vertex continues to focus on cross-selling complementary services between segments in order to lower customers' costs and provide integrated solutions for their environmental liabilities.
Expectations for the longer term, into 2020, Vertex anticipates modest improvements in future activity levels with major projects including LNG Canada, Coastal Gas Link, Trans Mountain Expansion, and new oil sand developments as the Company will be able to capitalize and benefit from existing contracts and relationships.
Vertex remains committed to further improving its operational and financial performance while ensuring it is creating shareholder value for the longer term. To achieve these commitments, Vertex continues to focus on reducing debt, reducing its cost of borrowing, actively managing working capital and evaluating its capital expenditure plans to match core and strategic opportunities. Accretive, complementary and opportunistic acquisitions remain an essential component of Vertex's long-term growth plans as it continues to integrate acquisitions and evaluate future opportunities when beneficial.
More from Industry News
Siemens Water Solutions successfully installed and started up a Zimpro wet air oxidation (WAO) system at a global petrochemical company's olefins plant in the Southern U.S.
Water conservation, efficient tailings management and responsible mine reclamation are becoming increasingly important for mines to ensure their license to operate. Spearheaded by the launch of the new Metso VPX filter for tailings dewatering, Metso introduces its comprehensive tailings management concept to enable and support environmentally and economically sustainable mining.
NETZSCH Pumps North America, LLC, experts in solutions designed specifically for difficult pumping applications, announces it is celebrating its 50th anniversary in business. As a mid-sized, family-owned German company, NETZSCH manufactures machinery and instrumentation with worldwide production, sales, and service. The global company began its North America operations as a one-person office 50 years ago, and has since grown to more than 180 employees, with over $75 M in revenue for its three North American business units, Analyzing & Testing; Grinding & Dispersing; and Pumps & Systems. NETZSCH marked the milestone year with a gala celebration, held May 11, 2019 at the historic SunnyBrook Ballroom in Pottstown, PA.
Fluor Corporation announced that Stork, part of Fluor's Diversified Services segment, together with its consortium partners, was awarded a 4-year framework agreement for plant turnaround services by Ecopetrol S.A. for its Barrancabermeja and Cartagena refineries in Colombia. The Colombia-based consortium includes Stork as the international lead partner, Rampint as the local partner in Barrancabermeja and Servimant as the local partner in Cartagena. The agreement also includes two extension options for an additional two years each. Both refineries supply fuel to meet Colombia's national and export product needs. Fluor booked the undisclosed contract value in the second quarter of 2019.
Ritchie Bros. has conducted its third Edmonton, AB auction of the year, selling 7,400+ equipment items and trucks for CA$72+ million (US$54+ million).
LNG Canada and its prime contractor, JGC Fluor BC LNG JV, announced the launch of YOUR PLACE, a province-wide workforce development program aimed at attracting, recruiting, training, supporting and employing women to work in the construction trades on the LNG Canada Project.
Ritchie Bros., the world largest industrial auctioneer, will host one of the largest pipeline construction equipment auctions ever, selling more than 4,700 items over two days at its site in Columbus, OH. Every single item in the auction will be sold without reserve.
As electrical machinery evolves and matures at an exponential pace - alongside increasingly available power grids to supply them - the oil and gas (O&G) landscape is witnessing major change. This is a positive shift as electrification not only meets ever tougher demands for lower global emissions, but also ticks boxes for improving O&G's availability and reliability. What's more, alongside greater productivity for operators, it adds up to greater safety for plant workers and the wider public too.
The Explorers and Producers Association of Canada (EPAC) is disheartened with the federal government's rejection of the proposed Senate amendments to Bill C-69.
Canada's oil sector is missing a significant opportunity to benefit from the global commodity price and finally receive fair market value for Canadian resources, according to the Canadian Association of Petroleum Producers' (CAPP) 2019 Crude Oil Forecast, Markets and Transportation report.
The Petroleum Services Association of Canada (PSAC) is expressing extreme disappointment with the decision by the Trudeau government to not accept the full slate of amendments for Bill C-69 proposed by the Senate following lengthy consultation with Canadians.
The Government of Canada is committed to protecting the health, safety, and environment of Canadians. The Government enforces laws that protect Canada's air, water, and natural environment, and we take this responsibility very seriously.
It is now clear the federal government is ignoring the Senate and the will of Canadians, damaging the country's economic future by not accepting the package of amendments the Senate proposed to Bill C-69, the Impact Assessment Act, according to the Canadian Association of Petroleum Producers (CAPP).
A landmark gift from Pembina Pipeline Corporation is ensuring working landscapes across the Canadian Prairies also work for conservation. Its $1-million investment in Ducks Unlimited Canada's (DUC) Revolving Land Conservation Program will protect approximately 2,000 acres (809 hectares) of important wetland habitat. At the same time, communities across Alberta and Saskatchewan will benefit from a host of environmental benefits. The joint announcement was made and celebrated by Pembina and DUC at a ceremony held at one of DUC's conservation project sites located east of Camrose.
CIRCOR Industrial Valves, a leader in designing and manufacturing flow control technology, features its commitment to ONE CIRCOR, ONE Solution, an initiative to provide the right solution for each customer by effectively drawing on the technical capabilities of CIRCOR's trusted brands, like Leslie Controls, Spence, RTK, Nicholson, and more. With a broad range of products to match to requirements and the technical expertise to design optimized systems for specific customer applications, CIRCOR engineers and provides integrated critical steam solutions for process industry, oil and gas, district energy and power systems.
Newly released estimates from satellite data show global gas flaring increased by 3 percent in 2018 to 145 billion cubic meters (bcm), which is equivalent to the total annual gas consumption of Central and South America.
Pulse Oil Corp. is pleased to announce the key findings of Pulse's enhanced oil recovery ("EOR") study.
Encana Corporation has provided an update on its share buyback program and disclosed its intention to execute a substantial issuer bid (SIB) to fulfill its previously announced 2019 share buyback. In addition, the Company signed an agreement to exit China, strengthened its production outlook for the second quarter of 2019 and reiterated its original capital investment plan.
Canadian oil sands production is set to enter a period of slower annual production growth compared to previous years. Nevertheless, total production is expected to reach nearly four million barrels per day (mbd) by 2030 - nearly one million more than today, according to a new 10-year production forecast by business information provider IHS Markit.
Canada's next federal government has an opportunity to help define a strategic, long-term vision for the growth of Canada's oil and natural gas sector, one that promotes jobs and a healthy economy for all Canadians, while being part of the solution to meet growing global energy demand with responsibly developed energy, according to the Canadian Association of Petroleum Producers (CAPP).
Parliamentarians need to support Bill C-69, as it was amended by the Senate Standing Committee on Energy, the Environment and Natural Resources, according to the leaders of the Canadian Manufacturers and Exporters (CME), Canadian Association of Oilwell Drilling Contractors (CAODC), and the Canadian Association of Petroleum Producers (CAPP).
nVent Electric plc has introduced a new standardized design for its nVent RAYCHEM Mineral Insulated (MI) heating units; industry-leading equipment designed to provide superior freeze protection and process temperature maintenance for high-power, high-exposure industrial heat-tracing applications. The new heating units ensure greater operational reliability and corrosion resistance in harsh environments.
Canadian Natural Resources Limited has entered into an agreement, subject to regulatory approval, to acquire substantially all of the assets of Devon Canada Corporation , for a cash purchase price of C$3.775 billion (subject to closing adjustments), with an effective date of January 1, 2019 and a targeted closing date of June 27, 2019.
AltaGas Ltd. has celebrated the grand opening of its Ridley Island Propane Export Terminal (RIPET), located in Prince Rupert, British Columbia - the first marine export facility for propane in Canada. The facility began introducing propane feedstock in mid-April, and the first shipment departed the terminal on May 23, 2019 bound for Asia.
Capital spending shifts and increased free cash flow generation included in Husky five-year plan update
With a focus on generating increased free cash flow, the updated Husky Energy five-year plan shows reduced capital spending to achieve an annual average of $3.15 billion for 2019 - 2023 versus the previously planned 2018 - 2022 annual average of $3.5 billion. Total capital spending over the 2019 - 2023 five-year period is reduced by about $1.7 billion, with total free cash flow before dividends expected to reach $8.7 billion at a flat $60 US WTI planning price.
The Canadian Environmental Assessment Agency (the Agency) must decide whether a federal environmental assessment is required for the proposed Tilt Cove Exploration Drilling Project, located 300 kilometres southeast of St. John's, Newfoundland and Labrador.
PetroShale announces financial and operating results for first quarter 2019 and provides operational update
PetroShale Inc. has announced its results for the first quarter of 2019, including a production rate averaging 5,036 boe/d, up by 52 percent from 2018, and increased revenue from year to year.
Speaking at the closing of the AIPN 2019 International Petroleum Summit (IPS), Ryan Lance, Chairman and Chief Executive Officer of ConocoPhillips spoke about his company's "hyper focus on returns" highlighting that the "returns the energy industry has generated have been negative over the last 10 to 15 years. Investors are frustrated. We chase the cycle up only, they have to chase the cycle back down on the back side. We recognize it's a mature industry growing at 1 percent per year. There's a lot of companies, some tremendous companies ... that have dramatic growth profiles. But when they put a hundred percent of their cash flow back into the business, don't pay the shareholder a fair amount of money, they're actually destroying value in the long run.
In less than four years, the Quest carbon capture and storage (CCS) facility has captured and safely stored four million tonnes of CO2, ahead of schedule and at a lower cost than anticipated. Four million tonnes of CO2 is equal to the annual emissions from about one million cars. Quest has now stored underground the most CO2 of any onshore CCS facility in the world with dedicated geological storage.
Oil potential remains abundant beyond shale, according to Association of International Petroleum Negotiators
How does the oil and gas industry plan its future in the ever-changing operating environment? The Association of International Petroleum Negotiators (AIPN) International Petroleum Summit, held in Houston, focused on a number of themes which will help companies determine a strategy for the years ahead.
Over the past decade, uncertainty has been constant in Canada's oil and gas industry, brought on in part by unknown investment outlooks, lack of market access, and a complex regulatory process. According to PwC Canada's 2019 Energy Visions report, there are two main factors that could catalyze change for the oil and gas industry: a national energy strategy as well as further technological innovation.
Events like this happen once a year, at most. On June 27 - 28, 2019, the world's largest industrial auctioneer, Ritchie Bros., will sell more than 120 pipelayers and other pipeline construction equipment at its auction site in Columbus, OH. Every single item will be sold without minimum bids or reserve prices.
Crude-oil-to-chemicals technology could boost per-barrel profits for refiners and petrochemical producers: IHS Markit
A revolutionary new chemical process technology, called crude oil-to-chemicals (COTC), could more than double the profitability derived from a barrel of crude oil, according to a new, independent economic assessment from IHS Markit.
Canada's vast gasoline production and transportation infrastructure ensures flexible and reliable supply for Canadians but unique market conditions in each region drive prices at the pump, according to a new report released by the National Energy Board (NEB).
Canbriam Energy Inc. and Pacific Oil and Gas Ltd. have announced the signing of definitive documents for the acquisition by PO&G of all of the issued and outstanding shares of Canbriam for cash consideration. Canbriam's Board of Directors has provided unanimous approval of the Transaction, and all of the officers, directors and significant shareholders of Canbriam representing greater than 90 percent of the outstanding Canbriam shares have entered into support and lock-up agreements in favor of the Transaction.
Fuelled, Canada's leading energy equipment marketplace, announced an agreement with PricewaterhouseCoopers Inc., LIT, in its capacity as the court appointed Receiver of Trident Exploration. This agreement will allow Fuelled to act as the exclusive sales agent for Trident's surplus oil and gas equipment. Fuelled is representing the Receiver on the divestiture of approximately 250 pieces of production equipment located in Western Canada. "We look forward to working closely with the Receiver on this engagement while we continue to deliver an unparalleled customer experience to our online buyers" said Austin Fraser, VP of Fuelled. "Trident's equipment includes gas compression, separation, dehydration, refrigeration, MCC's and other gas processing equipment that we believe there is strong demand for from our customers domestically as well as in the US and Overseas"
The International Gas Union (IGU) released its 2019 Wholesale Gas Price Survey at Flame 2019. The survey is the eleventh to be undertaken in a series that began in 2007. The eleven surveys examine the dramatic changes in wholesale price formation mechanisms during a period of key developments in the global gas market.