Dalmac Energy Reports Third Quarter 2016 Financial Results


EDMONTON, March 30, 2016 /CNW/ - John Babic, President and CEO of Dalmac Energy Inc. ("Dalmac") (TSX Venture "DAL") is pleased to announce second quarter results for the period ended January 31, 2016.






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YTD '16









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Q3 is traditionally one of Dalmac's busiest quarters, however, during Q3'16 various extraordinary factors adversely impacted the earnings recorded for this period.  The spot price of WTI crude oil has dropped from $35/bbl in December 2015 to about $26/bbl in January 2016. This has placed further pressure on E&P companies to cut capital expenditures, which in turn resulted in the cancellation and or delay of various drilling and completion projects. In addition to dropping oil prices this year's unusually warm winter brought about early spring break up conditions whose effects were even evident in January. These developments placed further downward pressure on activity levels in the oil and gas services sector.  Dalmac's quarterly revenues were down 36% compared to the same period last year and the YTD revenues were down 32%. The quarterly net loss was $(297)K and the YTD net loss was $(1.3)M. Despite the drop in revenues, the gross margin remained at 24% for both the quarter and YTD largely due to improved cost controls management. Subsequent to the close of Q3'16, Dalmac initiated further reductions to operation costs which will become evident in Q4'16.  These reductions are estimated to bring further cost savings of $100K/month when fully implemented

With crude oil prices being in severe decline over the past 18 months, customer pricing and activity levels for fluid transfers and well stimulation services has been negatively affected. There still remains a fair amount of uncertainty as to the magnitude and timing of when oil and gas prices will recover. In responding to this new reality, Dalmac has taken further steps to reduce our operating expenses by approximately $1.0M on an annual run basis. It is expected that at some point the reduced drilling and completion activity will correct the oil supply resulting in a demand imbalance which will eventually lead to higher oil prices. While a meaningful recovery of drilling and completions may not happen until at least the second half of 2016, we are confident in the belief that the longer the recovery takes, the more acute the drilling response will be.

With our great customer base and our many talented and dedicated people we are confident of weathering this recent economic downturn with the prospects of coming out stronger than before. During these uncertain times it is our primary focus to maintain a disciplined approach towards improving our balance sheet while keeping a close eye on our debt levels. In summary, Dalmac is leaner than ever before and we are actively engaged in the processes of negotiating fair rates with our key customers who are in the process of commencing fairly extensive drilling and completion programs in the Duvernay basin.  Dalmac is committed to delivering on revenue and growth opportunities in all our areas of operation and we are confident in our ability to generate value for all our stakeholders.

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.

SOURCE Dalmac Energy Inc.

For further information: John Babic - CEO - Dalmac Energy, Tel: 780-988-8510, Email: jbabic@dalmac.ca

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