Divestco Inc. ("Divestco" or the "Company"), an exploration services company dedicated to providing a comprehensive and integrated portfolio of data, software and services to the oil and gas industry worldwide, today announced its financial and operating results for the three months ended March 31, 2017.
Q1 2017 vs. Q1 2016
Divestco generated revenue of $4.0 million in Q1 2017 compared to $3.1 million in Q1 2016, an increase of $0.9 million (27%) mainly due to higher Seismic Data segment revenue related to the completion of a new seismic survey. Revenue in the Seismic Data segment ($2.6 million) increased by $1.7 million (186%). Revenue in the Software & Data segment ($0.7 million) decreased by $0.4 million (29%) and revenue in the Services segment ($0.6 million) decreased by $0.6 million (47%). Operating expenses increased by $0.2 million (8%) due to higher business taxes and royalties. Finance costs remained unchanged. Depreciation and amortization was $3.1 million in Q1 2017 compared to $1.4 million in Q1 2016, an increase of $1.7 million (117%) due to the completion of a new seismic survey. Depreciation and amortization was $3.1 million in Q1 2017 compared to $1.4 million in Q1 2016, an increase of $1.7 million (117%) due to the completion of a new seismic survey.
As at March 31, 2017, Divestco had a working capital deficiency of $0.1 million (December 31, 2016: $3.9 million deficiency), excluding deferred revenue of $1.1 million (December 31, 2015: $1.7 million). The decrease in the working capital deficit from the end of 2016 was due to the repayment of a bridge loan in March 2017 and positive funds from operations.
Operations Update and Outlook
The improvement in West Texas Intermediate oil prices from a low of US$33/barrel in March 2016 to a high of US$54/barrel in March 2017 has led to increases in capital spending by the industry. With the recent announcements of equity and debt financings, access to capital also seems to be improving for our clients leading us to view the later part of the year in a more favourable light. Divestco diligently monitors its operating expenses, and we have reduced our costs by over 50% since 2014. Most of the austerity measures that the Company put in place in response to the downturn are expected to remain in place for the remainder of 2017 or until a change in activity levels is realized.
Mr. Stephen Popadynetz, CEO and President commented: "Divestco has continued to see improvements in the financial results in Q1 2017, completing the quarter with $0.5 million in positive funds from operations and reducing our working capital deficit by $3.8 million. We also negotiated new financing and retired our $3.2 million bridge loan in March 2017. Our strategy of focussing on international markets resulted in us being awarded several contracts which we expect to complete over the next two quarters. Domestically, we continue to see new opportunities within all our divisions and we are well positioned to take advantage of the uptick in activity levels and capital spending plans. After two long years of industry contraction, we are finally starting to see opportunities for growth throughout our organization and for improved earnings and financial stability."
About the Company
Divestco is an exploration services company that provides a comprehensive and integrated portfolio of data, software, and services to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of data, software and services offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol "DVT".
Additional information on the Company is available on its website at Divestco.com
SOURCE: Divestco Inc.
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