DIVERGENT Energy Services Corp. ("Divergent" or the "Corporation") (TSX VENTURE:DVG) has released its financial results for the three months ended March 31, 2017 and provides the following highlights.
Q1 2017 FINANCIAL AND OPERATING HIGHLIGHTS
Gross margins increased to 33% from 21% year over year in the quarter and generated an increase in gross profit of 64%. The Corporation successfully installed a Linear Electromagnetic Submersible Pump on March 24, 2017 and the ongoing test has resulted in continuous operation and consistent performance.
Select Financial Information for the three month period ending March 31, 2017 can be summarized as follows:
RESULTS OF OPERATIONS
Select Consolidated Financial Information
(in 000's of USD $ unless otherwise stated)
For the three months ended March 31,
The Corporation's complete set of March 31, 2017 financial statements and corresponding management's discussion and analysis have been filed on the SEDAR website at www.sedar.com and are also available on the Corporation's website at www.divergentenergyservices.com.
With over 50 days of operating time, the Linear Pump will attract new clients with different oil well types (depths and rates) that will validate numerous benefits:
Encouraged by the continued interest in the Linear Pump by industry participants, we believe the ongoing results of the current installation will help to create greater awareness and opportunity for commercialization. The factory currently has the capacity to produce approximately 100 electromagnetic motors per year by mostly manual means, with plans to automate the facility and be able to produce up to 3000 units per year. Pricing on the Linear Pump system is competitive to most rod pumping applications.
Following the doubling of sales in 2016, Divergent is well positioned to capitalize on improving demand for artificial lift services. The improved margins posted in Q1 2017 are expected to continue and will provide cashflow for the expansion of the business. In response to the increase in activity and improved pricing, management has begun planning for an expansion facility in Colorado to meet the rising demand for services. Future opportunities may include Kansas, Oklahoma, Texas, North Dakota, and Utah in the United States as well as Manitoba, Saskatchewan, Alberta and British Columbia in Canada.
The outlook for 2017 is as follows:
ABOUT THE PUMP
The electromagnet motor duplicates rod pump movement without rod string or surface lifting equipment. All moving parts are contained within the submersible pump housing, eliminating rod and tubing wear, making the Pump ideally suited for landing in deviated or horizontal oil wells and as an alternative to conventional pump jack installations.
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, DIVERGENT Energy Services Corp. provides an array of Artificial Lift products and services that are used in the oil and gas industry. Products include Electromagnetic Pumps, Electric Submersible Pumps, and Electric Submersible Progressing Cavity Pumps.
SOURCE: DIVERGENT Energy Services Corp.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.