Bonnett's Energy Services Trust Announces 2008 Second Quarter Results



    TSX SYMBOL: BT.UN

    GRANDE PRAIRIE, AB, Aug. 13 /CNW/ - Bonnett's Energy Services Trust
(TSX:BT.UN) ("Bonnett's", or the "Trust") has released its second quarter 2008
results.
    The Trust's 2008 second quarter results continued to be affected by
historically low industry utilization levels as well as the normal seasonal
break-up period which occurs every year during the second quarter.
    Late in the first quarter of 2008, natural gas fundamentals started to
show improvement for the first time in almost two years. A cold winter in
North America has led to a decline in the storage levels of natural gas.
Compounding this was a diversion of Liquefied Natural Gas (LNG) away from
North America to capitalize on higher prices for natural gas in other parts of
the world. These fundamentals continued to improve during the second quarter.
Natural gas storage levels at the end of the second quarter were significantly
lower than the last two years and below the five year average. As a result,
many of the Trust's customers have been re-evaluating, and in a number of
cases increasing, their 2008 budgets. It is also expected that increased 2009
budgets will be finalized over the next couple of months.
    The Trust has been very proactive in reacting to the change in industry
fundamentals by making significant efforts in the second half of the second
quarter to increase staffing levels. Although this had a negative effect on
the results of the second quarter, it has put the Trust in a good position to
capitalize on the expected increase in demand for the Trust's equipment in the
second half of 2008 and 2009.
    The Trust intends to limit its 2008 capital budget primarily to
maintenance capital. Due to the low utilization levels of the Trust's
equipment in 2007 and the first half of 2008, the Trust has the capacity to
significantly increase revenue and net earnings without additional capital
expansion.
    During the second quarter, the Trust made significant efforts to
strengthen its financial position. On May 31, the Trust closed a non-brokered
private placement offering of 2,500,000 trust units at a price of $4.00 per
Trust Unit for gross proceeds of $10,000,000. In addition, on July 11, 2008
the Trust and the banking syndicate finalized the amendment to the terms of
the current credit agreement. The Trust's facilities will now mature on
June 30, 2009. The total limit of the facilities has been reduced to
$48.8 million. At the end of the second quarter the Trust had close to
10 million of cash and unused operating facility available. In addition, the
covenants of the agreement have been amended and under the new terms the Trust
is in compliance at June 30, 2008.

    
    Highlights
    ----------

                                  Three Months Ended        Six Months Ended
                                         June 30                 June 30
    -------------------------------------------------------------------------
    ($000's except per unit
     amounts)                   2008    2007    2006    2008    2007    2006
    -------------------------------------------------------------------------
    Revenue from continuing
     operations               10,018  10,269  17,041  36,201  46,242  55,733
    EBITDAC from continuing
     operations(1)            (3,044) (2,674)    748   4,786   7,283  17,047
    Funds flow from
     continuing operations(2) (4,121) (3,484)    581   2,478   5,773  16,721
    Funds flow from
     continuing operations
     per unit
      Per Unit - Basic         (0.33)  (0.30)   0.05    0.20    0.50    1.49
      Per Unit - Fully
       diluted                 (0.33)  (0.30)   0.05    0.20    0.50    1.44
    Net income (loss) from
     continuing operations    (6,583) (6,345) (1,441) (2,319) (1,249)  9,961
    Net income (loss)         (6,840) (7,553) (1,875) (2,670) (3,304)  9,250
    Net income (loss) per
     unit from continuing
     operations
      Per Unit - Basic         (0.52)  (0.55)  (0.13)  (0.19)  (0.11)   0.89
      Per Unit - Fully
       diluted                 (0.52)  (0.55)  (0.12)  (0.19)  (0.11)   0.86
    Net income (loss) per
     unit
      Per Unit - Basic         (0.54)  (0.65)  (0.17)  (0.22)  (0.29)   0.83
      Per Unit - Fully
       diluted                 (0.54)  (0.65)  (0.16)  (0.22)  (0.29)   0.80
    Distribution to
     unitholders                   -   3,474   5,060       -   8,073   9,447
      Distribution per unit
       - basic                     -    0.30    0.45       -    0.70    0.84
    Weighted average units
      Basic                   12,607  11,558  11,245  12,191  11,529  11,197
      Diluted                 12,607  11,624  11,724  12,191  11,617  11,635
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Notes:

    (1) Earnings before interest, taxes, depreciation, amortization and unit
        based compensation and certain other items ("EBITDAC") is not a
        recognized measure under Canadian Generally Accepted Accounting
        Principles (GAAP). Management believes that in addition to net
        earnings, EBITDAC is a useful supplemental measure as it provides an
        indication of the results generated by the Trust's principal business
        activities prior to consideration of how those activities are
        financed or how the results are taxed. These measures are identified
        and presented, where appropriate, together with reconciliations to
        the equivalent GAAP measure. However, they should not be used as an
        alternative to GAAP, because they may not be consistent with
        calculations of other companies or trusts.

    (2) Funds flow or funds flow from operations refers to cash flow from
        operations before changes in non-cash working capital. The Trust
        views cash flow from operating activities before changes in non-cash
        working capital balances, hereafter referred to as Funds Flow, as a
        measure of liquidity, and believes that Funds Flow is a metric used
        by many investors to assess the financial performance of the Trust.
        As the Trust may distribute a portion of its cash on an ongoing
        basis, the Trust believes that Funds Flow is an appropriate
        consideration in determining funds available for distribution to
        unitholders. Although changes in non-cash working capital balances
        will impact cash available to finance distributions, these changes
        will be a source of cash in one period and a use of cash in another
        depending on changes in the level of activity in a particular period
        due to seasonality and other factors. Absent a sustained period of
        growth in the Trust's business, changes in non-cash working capital
        will generally not be a use of cash by the Trust over a longer period
        of time, although that may be the case from one quarter to the next.
        Given that these changes are not predictable and tend to even out
        over time, management does not believe it is appropriate to include
        such changes in determining cash flow from operating activities being
        a measure used to indicate capacity of the Trust to generate cash
        flow for paying distributions in the future. Any use of cash from an
        increase in working capital in a particular period will be financed
        by the Trust's credit facilities and repaid when non cash working
        capital decreases and cash is generated. See the heading "Funds flow
        from Operations" for reconciliation to the equivalent GAAP measure.
        Funds flow should not be used as an alternative to GAAP, because it
        may not be consistent with calculations of other companies or trusts.
    

    Disclosure Regarding Forward-Looking Statements
    -----------------------------------------------
    This press release contains forward-looking statements and
forward-looking information within the meaning of applicable Canadian
securities law. These statements and information are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those included in the forward-looking statements and forward-looking
information. When used in this document, the words "intend", "plan",
"anticipate", "believe", "seek", "propose", "estimate", "intend" and similar
expressions, as well as future or conditional verbs such as "may", "would",
"could", and "will", as they relate to the Trust, are intended to identify
forward-looking statements and forward-looking information. Such statements
and information reflect the Trust's current views with respect to future
events and are subject to certain risks, uncertainties and assumptions,
including, without limitation, those described in this press release under the
heading "Risks and uncertainties", and "Outlook". Forward-looking information
concerning expected operating and economic conditions are based upon past
operating and economic conditions. Forward-looking information concerning the
availability of funding for future operations is based upon sources of funding
which the Trust has relied upon in the past and expectations concerning future
economic and operating conditions. Forward-looking information concerning the
relative future competitive position of the Trust is based upon expectations
relating to future economic and operating conditions, the current business
environment, present and anticipated programs and expansion plans of other
organizations operating in the energy service industry. Forward-looking
information concerning the nature and timing of growth is based on past
factors affecting the growth of the Trust, past sources of growth and
expectations relating to future economic and operating conditions.
Forward-looking information in respect of the costs anticipated to be
associated with the acquisition and maintenance of equipment are based upon
past acquisition and maintenance costs for such equipment and expectations
relating to the future acquisition and maintenance cost increases concerning
such equipment. Although management of the Trust believes that the
expectations reflected in such forward-looking information are reasonable,
there can be no assurance that such expectations will prove to have been
correct because, should one or more of the enumerated risks or uncertainties
materialize, or should the assumptions underlying forward-looking statements
or forward-looking information prove incorrect, actual results may vary
materially from those described in this press release as intended, planned,
anticipated, believed, estimated or expected. Except where required by law,
the Trust does not assume any obligation to update these forward-looking
statements or forward-looking information if conditions or opinions should
change. Readers should not place undue reliance on forward-looking statements
or forward-looking information. All of the forward-looking statements and
forward-looking information of the Trust contained in this press release are
expressly qualified, in their entirety, by this cautionary statement.

    Additional Information
    ----------------------
    Additional information relating to the Trust is filed on SEDAR and can be
viewed at www.sedar.com or at the Trust's website at www.bonnettsenergy.com.
This information includes the Trust's Annual Information Form dated March 31,
2008. Information can also be obtained by contacting the Trust at Bonnett's
Energy Services Ltd., R.R. 2, Site 33, Box 1, Grande Prairie, Alberta T8V 2Z9.

    %SEDAR: 00022595E




For further information:

For further information: Murray Toews, Chief Executive Officer; or
Kelvin Torgerson, Chief Financial Officer, at (780) 830-2705, Fax: (780)
532-4811, Email: info@bonnettsenergy.com

Organization Profile

BONNETT'S ENERGY SERVICES TRUST

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