Ceiba Energy Services Inc. ("Ceiba" or the "Company") (TSX VENTURE:CEB) is pleased to announce its first quarter financial results. Ceiba has filed its Financial Statements and related Management's Discussion and Analysis for the period ended March 31, 2017 on the Company's profile at www.sedar.com.
In Q1 2017, Ceiba recorded revenue of $2.3 million, an increase of 44% compared to Q1 2016 and an increase of 53% from Q4 2016. The increase in revenue is attributed to the increase in activity and pipeline access at the Gordondale and Silver Valley facilities. Adjusted EBITDA for Q1 2017 was $320 thousand, an improvement of $285 thousand from $35 thousand in Q1 2016 and an improvement of $608 thousand from negative $288 thousand in Q4 2016.
At March 31, 2017, the Company had a working capital deficit of $2.7 million compared to a working capital deficit of $6.9 million as at December 31, 2016. The improvement in working capital is due to the reclassification of $4.3 million of bank debt as long term as the result of the Company being compliant with its credit facility financial covenant at March 31, 2017 as compared to being non-compliant at December 31, 2016.
Ceiba has plans to increase disposal injection rates at its Obed facility. Plans to remediate the disposal well at the Kaybob facility are currently on hold. Ceiba expects to achieve overall revenue growth in 2017 from contributions from its newly opened facilities as well as a return to higher utilization levels at existing facilities, particularly Gordondale, Silver Valley and Obed.
Q1 2017 Operating and Financial Highlights
On September 9, 2016 the Company initiated a process to identify, examine and consider a range of strategic alternatives available to the Company with a view to enhance shareholder value.
On May 14, 2017, Ceiba and Secure Energy Services Inc. ("SECURE") entered into an arrangement agreement (the "Arrangement Agreement") whereby SECURE will acquire all the shares of Ceiba for $0.205 for each share, to be paid in cash or by the issuance of 0.02115 of a SECURE common share, at Ceiba shareholders' election, provided that a maximum of approximately 1.3 million SECURE common shares will be issued (representing approximately 50% of the consideration to be paid to Ceiba shareholders) (the "Transaction"). The Transaction will require approval by at least 66 2/3 percent of holders of the Ceiba common shares and Ceiba warrants, voting together as a single class, at a special meeting to be called to consider the Transaction. The Transaction is expected to be completed in the third quarter of 2017 and is subject to TSX, TSX Venture Exchange and Alberta Court of Queen's Bench approval, regulatory approvals and the satisfaction of other customary closing conditions. The Arrangement Agreement contains customary terms and conditions for a transaction of this nature, including a prohibition upon Ceiba from soliciting or initiating any discussion concerning any other business combination or similar transaction, subject to compliance with fiduciary duties, the right of SECURE to match any unsolicited superior proposal received by Ceiba, and a termination fee of $1.0 million payable to SECURE in certain circumstances.
Ceiba Energy Services provides specialized environmental services for our customers in the energy sector:
We focus on companies that are involved in the exploration, extraction and production of oil & natural gas in Western Canada.
We develop and construct facilities in proximity to our customers to provide treatment of their crude oil emulsion, terminalling, storage & marketing of their oil products and disposal of production and waste waters.
SOURCE: Ceiba Energy Services Inc
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