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Strad Energy Services Ltd., (“Strad” or the “Company”), a North America focused, diversified energy services company, today announced its financial results for the three and six month periods ended June 30, 2011. All amounts are stated in Canadian dollars unless otherwise noted.
SELECTED FINANCIAL AND OPERATIONAL HIGHLIGHTS:
- Record second quarter EBITDA(1) of $11.3 million, a 111% increase compared with $5.4 million in the second quarter of 2010 and a 34% increase in EBITDA compared with the first quarter of 2011;
- Annualized EBITDA return on average total Drilling Services assets(2) for the six months ended June 30, 2011, of 33.1% and Drilling Services EBITDA margins of 33.3%;
- Capital expenditures of $20.3 million in the second quarter. By the end of June, $52.1 million of the $86.5 million approved capital program for 2011 had been spent;
- Continued deployment of assets to high growth resource areas in the United States. Record second quarter United States revenues of $15.7 million increased 138% compared to the second quarter of 2010. Total net assets based in the United States now comprise 48% of total Drilling Services net assets compared to 26% at the end of the second quarter of 2010; and
- Ongoing success in the development of new products, including solids control, composite matting and satellite communications rental equipment.
“Strad’s diversified strategy exposes the Company to a range of operating regions, resource plays and commodity types across North America and this approach allowed us to generate record financial performance in what is historically a challenging quarter for more regionally focused energy services companies,” said Henry van der Sloot, Chief Executive Officer of Strad. “Our strong organic growth this quarter is a direct consequence of our successful deployment of capital, with a focus on higher value equipment utilizing advanced technologies, as well as strong demand from both new and existing customers eager to access our expertise in planning and supporting increasingly complex drilling programs. We believe our commitment to disciplined growth and a recent $20.0 million expansion of our 2011 capital budget will allow us to drive continued growth both through the balance of the year and beyond.”
Andy Pernal, President of Strad, stated “This quarter we were able to clearly demonstrate how the investments we have made in our asset base are translating into improved financial performance.” He added, “With overall demand continuing to grow, increasing the size of our rental fleet and bringing new and innovative products to market has allowed us to deepen our relationships with existing customers and take market share, allowing us to build a broader customer base to support future stable growth.”
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a recognized measure under IFRS or previous Generally Accepted Accounting Principles in Canada (“GAAP”); see “Non-IFRS Measures Reconciliation” in this press release.
(2) Annualized return on average total drilling assets is not a recognized measure under IFRS or previous GAAP; see “Non-IFRS Measures Reconciliation” in this press release.