Dalmac Energy Reports Q2’18 Financial Results

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EDMONTON, Alberta, Dec. 22, 2017 — John Babic, President and CEO of Dalmac Energy Inc. (“Dalmac”) (TSX Venture:DAL) is pleased to announce second quarter and six month results for the reporting period ended October 31, 2017.
Business HighlightsQ2’18 revenues were up 24% over same period last year and gross margins were up 33%.YTD revenues were up 25% and gross margins were up 23%Petroleum Services Association of Canada (PSAC), in its third update to its 2017 Canadian Drilling Activity Forecast, announced that it was increasing its forecasted number of 6,680 wells to be drilled (rig released) across Canada for 2017 to 7,200 wells drilled. PSAC based its updated 2017 Forecast on average natural gas prices of $2.75 CDN/mcf (AECO), crude oil prices of US$49.00/barrel (WTI) and the Canada-US exchange rate averaging $0.77.On a provincial basis for 2017, PSAC now estimates 3,604 wells to be drilled in Alberta, up from 1,900 wells in the original Forecast.We are utilizing our existing facilities to distribute more chemical products, supporting the drilling and completions activity in the Fox Creek area. Our location gives us a trucking advantage to other competitors coming in from other parts of Alberta.Quarterly EBITDAS was up 61% and YTD we are up 103%.Net profit for the quarter was $82K compared to a loss of $383 in Q2’17Subsequent Developments
On December 6th, 2017, Dalmac Energy Inc. has entered into an agreement with Servus Credit Union Ltd., whereby Servus has agreed to provide the company with a $5-million revolving overdraft credit facility to assist with daily operating expenses and a $7-million equipment evergreen credit facility to assist with equipment refinancing and acquisitions. Both the overdraft and equipment credit facilities will bear an annual rate of interest equal to the Servus prime lending rate plus 1 per cent, floating, calculated daily and payable monthly in arrears. Pursuant to the terms of the credit agreement, Dalmac will be required to maintain certain financial covenants, which will be measured annually based on the company's year-end results. Borrowings under the credit agreement have been guaranteed by Dalmac Oilfield Services Inc., the primary operating subsidiary of the company, and secured against the assets of the company and certain assets of Professional Consulting Solutions Ltd., the private management company of John Babic, Dalmac's president and chief executive officer. In connection with the closing of this transaction, approximately $8,157,000 of the aggregate funds made available to the company has been used to repay existing indebtedness, including that incurred under Dalmac's loan agreements with PNC Bank, Canada branch, which, as a result of the credit agreement, have now been terminated. In addition, pursuant to the terms of the credit agreement, the interest accrued by the company under its recently announced demand loan from Mr. Babic may only be paid at the end of each fiscal year, following confirmation from the company that all of its financial covenants under the credit agreement have been met.
Outlook
The second quarter of fiscal 2018 witnessed a rebounding in oil and gas prices which in turn resulted in higher rig counts drilling activity. These developments are underscored by the Petroleum Services Association of Canada (PSAC) who released their 2018 Canadian drilling activity forecast. PSAC expects a total of 7,900 wells (rig releases) to be drilled in Canada in 2018. For 2017, the Association’s final revised forecast predicts a yearly total of 7,550 wells. On a provincial basis for 2018, PSAC estimates 3,998 wells to be drilled in Alberta.  Based on increased in drilling activity, management is confident in its outlook for the Company and its services.  As we continue to streamline and maximize efficiencies, which are now firmly in place, management is confident on maintaining healthy margin ratios while delivering on improved growth and equipment utilization. Accordingly, the Company is mindful of improving its utilization levels through service equipment activation and refurbishment programs, which are ongoing, in addition to upgrading and enhancing the capabilities of various other of the Company’s assets. For the balance of this year and into the next it is expected that higher industry activity will result in a higher demand for our services, improved equipment rates and better operating and financial results.
For more information contact:John Babic – CEO – Dalmac Energy
Tel: 780-988-8510
Email: [email protected]
Statements throughout this report that are not historical facts may be considered ‘forward looking statements’.  Such statements are based on current expectations that involve risks and uncertainties, which could cause actual results to differ from those anticipated.  Important factors that can cause anticipated outcomes to differ materially from actual outcomes include the impact of general economic conditions, industry conditions, competition from other industry participants, volatility of petroleum prices, the ability to attract and retain qualified personnel, changes in laws or regulation, currency fluctuations, continued ability to access capital from available facilities and environmental risks.  References to “Dalmac’, the “Corporation”, “Company”, “us”, “we”, and “our” mean Dalamc Energy Inc. and its subsidiary Dalmac Oilfield Services Inc.  The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.  We seek safe harbor.
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Sarah Thompson

Sarah Thompson

Sarah is a financial reporter, focusing on technology, national security, and policing. Before joining Daily Telescope she worked as a staff writer at Fast Company and spent two years as a foreign correspondent in Turkey. Her work has been published in Al Jazeera America, The Nation, Vice News, Motherboard, and many other outlets.
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