/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY,
AB, Aug. 15, 2022 /CNW/ - Cathedral Energy
Services Ltd. (the "Company" or "Cathedral") (TSX: CET) announces
its consolidated financial results for the three and six months
ended June 30, 2022 and
2021.
Dollars in 000's except per share amounts.
This news release contains "forward-looking statements"
within the meaning of applicable Canadian securities laws.
For a full disclosure of forward-looking statements and the risks
to which they are subject, see "Forward-Looking Statements" later
in this news release. This news release contains references
to Adjusted gross margin (gross margin plus non-cash items of
depreciation and share-based compensation), Adjusted gross margin %
(adjusted gross margin divided by revenues) and Adjusted EBITDA
(earnings before finance costs, unrealized foreign exchange on
intercompany balances, taxes, depreciation, non-recurring costs
(including acquisition and restructuring costs and non-cash
provision for bad debts), write-down of equipment, write-down of
inventory and share-based compensation). These terms do not have
standardized meanings prescribed under International Financial
Reporting Standards (IFRS) and may not be comparable to similar
measures used by other companies, see "Non-GAAP Measures" later in
this news release.
FINANCIAL HIGHLIGHTS
Dollars in 000's except per share amounts
|
Three months ended June
30
|
Six months ended June
30
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
$
|
27,652
|
$
|
7,322
|
$
|
62,037
|
$
|
18,687
|
Adjusted gross margin %
(1)
|
|
19 %
|
|
-6 %
|
|
24 %
|
|
11 %
|
Adjusted EBITDAS
(1)
|
$
|
2,865
|
$
|
(2,477)
|
$
|
9,838
|
$
|
(1,540)
|
Cash flow - operating
activities
|
$
|
4,511
|
$
|
(1,892)
|
$
|
2,753
|
$
|
(2,300)
|
Income (loss) from
operating activities
|
$
|
(1,885)
|
$
|
(5,483)
|
$
|
526
|
$
|
(7,643)
|
Basic per
share
|
$
|
(0.01)
|
$
|
(0.10)
|
$
|
-
|
$
|
(0.15)
|
Net income
(loss)
|
$
|
(2,824)
|
$
|
(5,846)
|
$
|
(581)
|
$
|
(7,932)
|
Basic per
share
|
$
|
(0.02)
|
$
|
(0.11)
|
$
|
(0.01)
|
$
|
(0.15)
|
Equipment additions -
cash basis
|
$
|
6,218
|
$
|
737
|
$
|
9,522
|
$
|
1,328
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic (000s)
|
|
129,200
|
|
54,935
|
|
110,353
|
|
52,547
|
Diluted
(000s)
|
|
131,898
|
|
55,721
|
|
112,969
|
|
52,873
|
|
|
|
|
|
|
June 30
|
|
December 31
|
|
|
|
|
|
|
2022
|
|
2021
|
Working
capital
|
|
|
|
|
$
|
21,342
|
$
|
14,117
|
Total assets
|
|
|
|
|
$
|
123,373
|
$
|
75,423
|
Loans and borrowings,
current and long-term
|
|
|
|
|
$
|
9,170
|
$
|
6,035
|
Shareholders'
equity
|
|
|
|
|
$
|
82,190
|
$
|
42,504
|
|
(1) Refer to "NON-GAAP
MEASUREMENTS"
|
|
2022 Q2 KEY TAKEAWAYS
- Revenue increased by $20,330 in
2022 Q2 compared to 2021 Q2, representing growth of 278%;
- Adjusted EBITDAS increased to $2,865 in 2022 Q2 from negative ($2,477) in 2021 Q2, an improvement of
$5,342;
- 2022 Q2 had a loss of ($2,824)
compared to a loss of ($5,846) in
2021 Q2, representing meaningful improvement amidst the normal
seasonality of Canadian Q2 low activity;
- Canadian market share tallied over 15% in 2022 Q2 vs.
approximately 7% one year ago and was the highest level for a
second quarter in many years;
- The Company completed one of the first bought deals in the
Canadian energy business since 2017, raising gross proceeds of over
$26,000 via a syndicate of Canadian
investment dealers;
- The Company purchased 91% of LEXA Drilling Technologies and
added highly regarded members of the management team with the
proven technical expertise and track record of Axel Schmidt as SVP Engineering and Technology
and a wealth of industry specific financial knowledge and
experience with Chad Robinson, who
subsequently accepted the role of Chief Financial Officer in the
third quarter;
- Expanded into a strategic gas market in the Montney and added a complementary customer
base with the completion of our fifth acquisition, Compass
Directional, in the quarter; and
- Subsequent to 2022 Q2, the Company acquired Altitude Energy
Partners for approximately $128,000
CAD. With a presence in most major basins in the US and a 7% market
share, the acquisition of Altitude significantly expands the
Company's US footprint and establishes it as one of the larger
providers of directional services in North America with an enhanced management and
sales team.
PRESIDENT'S MESSAGE
Comments from President & CEO Tom
Connors:
The second quarter of 2022 was an exciting time for the company
as the benefits of our consolidation strategy continue to bear
fruit with improved results and the completion of two additional
key acquisitions. Cathedral posted the best top line in a second
quarter since 2019 and the highest level of adjusted EBITDAS since
the second quarter of 2014. The power of the Company's
consolidation strategy is now showing itself in quarterly results,
a trend we expect to continue as Cathedral gains a full quarter
from Compass in Q3 and almost a full quarter from Altitude.
On a pro forma basis, the inclusion of six acquisitions materially
increases the EBITDA and free cash flow profile of Cathedral and
positions the Company with a larger market profile which is more
appealing to a broader audience of investors.
In order to ensure we are positioned to offer the
most-competitive technology possible, we completed the purchase of
LEXA Drilling Technologies, our first acquisition in the quarter,
and fourth in twelve months. LEXA brings to the company a
team of highly-capable people led by Axel
Schmidt and Chad Robinson who
were integral in growing one of Cathedral's largest Canadian
competitors – Pacesetter Directional. Axel
Schmidt built a reputation for being one of the foremost
developers of downhole drilling technology in Western Canada and was subsequently named
Senior Vice President, Engineering and Technology. Chad had the
extensive financial background the company needed as it becomes a
major, independent, North American Directional Drilling company.
Chad has since been appointed CFO of the Company.
Adding a complementary customer base and expanding our footprint
in the highly-strategic Montney
and Deep-Basin plays, Cathedral also completed the acquisition of
Compass Directional, which has been a leading directional drilling
company in the Canadian market since 1998. These two natural
gas and liquids-focused areas represent the backbone of growth in
western Canadian natural gas supply for the next decade principally
driven by the LNG Canada project with related drilling activity
starting up in 2023. The two acquisitions have key elements in
common. They both bring a combination of accomplished people,
excellent technology capability and strategic clients that will
help the Company remain a top performer in Canadian market share
going forward.
Post Q2-2022, Cathedral completed its sixth and largest
acquisition in twelve months with the purchase of Altitude Energy
Partners for approximately $128,000
CAD. Altitude represents the largest acquisition in the Company's
more-than-20-year history and provides a major platform for US
growth in the quarters and years to come. Furthermore, Altitude
instantly positions Cathedral as one of the largest independent
directional drilling companies in North
America. Altitude gives extensive geographic coverage of the
US land drilling market, highlighted by its 9% market share in the
most important U.S. play - the Permian. Altitude continues the
trend of accretive acquisitions by Cathedral in key areas, where
the highly-experienced management team joins the Company with
significant equity going forward. More broadly, the
seven-year downturn from 2014-2021 has created an imperative to
become a large, focused supplier of services to an increasingly
consolidated E&P sector. Size and scale have never mattered as
much as they do today and Cathedral has used this as the organizing
principle behind its acquisition strategy over the last year.
The management team of Cathedral believes that balance sheet
strength is paramount, which is why the emphasis over the next
several quarters will be to bring net debt levels down markedly.
Operating cash flows are expected to exceed capital spending needs
by a considerable margin such that improvements in leverage ratios
will be quickly noticeable. The Company also continues to execute
on its 2022 capital plan and strategically invest in areas that
bring value to our customers and our business such as the addition
of four rotary steerable systems for the Canadian market. With our
combined strategy of growth through consolidation, differentiation
through technology, and a fervent focus on operational excellence,
the Company expects the culmination of those efforts will generate
high levels of free cash flow, a strong balance sheet, and a robust
Company into the future.
Finally, I want to take this opportunity to thank the many
employees from Cathedral who have made these results and
acquisitions happen and welcome our new partners from LEXA, Compass
and Altitude. We will be much stronger with your
contributions going forward.
2022 ACQUISITIONS
The purchase price allocation related to the acquisition is
preliminary and may be subject to adjustments, which may be
material, pending completion of final valuations. In a
business combination, it generally takes time to obtain the
information necessary to measure fair values of assets acquired and
liabilities assumed. Changes in the provisional measurements
of assets and liabilities acquired may be recorded as part of the
purchase price allocation as new information is obtained, until the
final measurements are determined no later than 12 months after the
acquisition date. The Company is still in the process of
identifying the assets acquired and liabilities assumed and
assessing the fair value allocations relating to the inventory and
intangible and capital assets acquired. Fair value is
estimated using the latest available information as at the date of
the financial statements. As a result, these preliminary
allocations may change.
Discovery Downhole
Services
On February 10, 2022, the Company
announced the closing of Cathedral's acquisition of the operating
assets of Discovery Downhole Services ("Discovery"). The
Transaction includes the operating assets and non-executive
personnel of Discovery's U.S.-based, high-performance mud motor
technology rental business with operations in North Dakota, Texas, and Wyoming. The transaction will
materially increase the Company's U.S. revenues and add a
high-quality customer base of oil and gas producers and directional
drilling companies active in all the major U.S. land basins.
Cathedral paid $18,160 in cash
funded by a new term loan from its existing bank along with funds
raised in a common share private placement and issued 5,254,112
common shares (the "Consideration Shares"). The shares were
valued at $0.52 for accounting
purposes (total of $2,732). In
addition to a 4-month statutory hold period on the Consideration
Shares, the parties have agreed to contractual restrictions on
resale as follows: 25% are restricted until February 10, 2023; a further 25% of are
restricted until August 10, 2023; and
a further 50% are restricted until February
10, 2024, subject to certain exceptions. Additionally,
Cathedral assumed the leases at the three operating locations for
lease liabilities of $1,579.
Total consideration paid was $22,471.
While the purchase and sale agreement was structured as an asset
sale, the Company has accounted for this transaction as a business
combination. The amounts below are based on management's
preliminary estimates of fair value at the time of preparation of
these financial statements based on the best available information.
Amendments may be made to these amounts as the values subject to
estimation are finalized. The Company has allocated the purchase
price as:
- Inventory $3,283
- Right of use asset $1,579;
and
- Equipment $17,609.
To date, the Company has expensed $95 in costs related to the
Transaction.
For the period of February 10 to June 30,
2022, the assets acquired generated revenues of $12,181 and operating income before depreciation
and interest of $6,357.
Revenues for the period of January 1 to
February 9, 2022 were $2,286
and operating profit before depreciation and interest for that
period was $717.
LEXA Drilling Technologies
Inc.
On June 20, 2022, the Company
purchased 90.98% of LEXA Drilling Technologies Inc. ("LEXA"), a
Calgary-based, downhole technology
company for equity consideration in Cathedral. LEXA is focused on
the development and commercialization of high data rate positive
pulse MWD technology. They are also focused on developing
technology that enhances and enables drilling automation through
remote downhole directional equipment. The addition of
high-performance pulse technology to Cathedral's industry leading
electromagnetic technology will further strengthen the performance
of Cathedral's existing MWD platform.
In exchange for 90.98% of the shares of LEXA, its technology and
products in development, Cathedral issued 1,612,891 common shares,
which will be subject to a four-month hold period. The shares were
valued at $0.63 for accounting
purposes (total of $1,016).
The Company has accounted for this transaction as a business
combination. The amounts below are based on management's
preliminary estimates of fair value at the time of preparation of
these financial statements based on the best available information.
Amendments may be made to these amounts as the values subject to
estimation are finalized. The Company has allocated the
purchase price as:
- Cash $70;
- Net working capital $180;
- Deferred tax liability ($109);
- Intangibles $1,052; and
- Non-controlling interest ($177)
The deferred tax liability was subsequently offset by the
benefit of unrecorded tax attributes.
To date, the Company has not expensed any costs related to the
Transaction.
A director of Cathedral, Mr. Rod
Maxwell, owns the remaining shares equating to 9.02% of
LEXA, which were not purchased as part of the Transaction. Mr.
Maxwell abstained from voting on the Transaction in accordance with
Cathedral's corporate governance policies. On July 19 2022, the Company purchased the remaining
9.02% shares of LEXA by issuing 159,836 common shares of
Cathedral.
As part of the transaction, Mr. Axel
Schmidt has joined Cathedral as Senior Vice President,
Engineering and Technology while Mr. Chad
Robinson has joined as Chief Financial Officer. LEXA also
brings an experienced engineering and development team.
Prior to the acquisition, Cathedral was the only revenue source
for LEXA so there are no revenues or operating profit before
depreciation and interest to report.
Compass Directional
Services
On June 22, the Company acquired
the operating assets of Compass Directional Services Ltd.
("Compass"). Compass is a privately-owned, Canadian directional
drilling business operating in the Western Canadian Sedimentary
Basin, with a focus on the high-activity Montney and Deep Basin plays.
As part of the Transaction, Cathedral has retained key Compass
personnel under employment contracts to ensure a seamless customer
service experience, successful integration and long-term alignment
with Cathedral's strategy.
Cathedral paid $4,000 in cash; and
issued 6,253,475 common shares. The shares were valued at
$0.69 for accounting purposes (total
of $4,315). These shares will
be subject to contractual restrictions with portions vesting at
various periods over two years. Additionally, Cathedral assumed the
leases at two locations for lease liabilities of $316. Total consideration paid was
$8,631.
While the purchase and sale agreement was structured as an asset
sale, the Company has accounted for this transaction as a business
combination. The amounts below are based on management's
preliminary estimates of fair value at the time of preparation of
these financial statements based on the best available information.
Amendments may be made to these amounts as the values subject to
estimation are finalized. The Company has allocated the purchase
price as:
- Inventory $444
- Right of use asset $316;
- Deferred tax liability ($647);
and
- Equipment $8,518.
The deferred tax liability was subsequently offset by the
benefit of unrecorded tax attributes.
To date, the Company has expensed $4 in costs related to the Transaction.
Additionally, 1,389,664 shares were issued on an escrow
arrangement and are subject to contractual restrictions over four
years with ¼ of the shares vesting each year on the anniversary of
the purchase. These shares are registered to Cathedral's 100%
owned subsidiary, 2438155 Alberta Ltd., and are classified as
Treasury shares and will be recognized as compensation when
vested.
As the acquired assets were integrated into Cathedral's existing
directional drilling operations it is impracticable to breakout the
revenue and profit or loss of the acquired assets since the
acquisition.
SUBSEQUENT
EVENTS
On July 14, the Company closed its
acquisition of Altitude Energy Partners, LLC ("Altitude") through a
cash amount of $62,675 USD
($81,409 CAD) and the issuance of
67,031,032 common shares in of Cathedral. The shares will be
valued at $0.69 for accounting
purposes (total of $46,251 CAD) for a
total value of approximately $127,660
CAD. The total acquisition value is still being
determined.
Altitude is a privately-held, U.S.-based, directional drilling
services business with headquarters in Wyoming, executive leadership based in
Houston, and significant
operations in Texas, most
prominently in the Permian Basin.
Following the completion of the acquisition, the Company plans
to continue to use the Altitude name and brand in the US.
Further, the Altitude management team and its people will lead and
operate Cathedral's existing US directional drilling business. Mr.
Lee Harns, the current President and
CEO of Altitude, will remain as President of the business unit.
Joining Mr. Harns will be Tyler
Clark, the current COO, and Alex
Bougaieff, the current CFO, along with several other key
long-standing employees and the entire Altitude operational
team. In addition, Mr. J.R. Boyles, a director and founder of
Altitude, will be appointed to Cathedral's board of directors
In connection with this transaction, the Company amended its
banking agreement with ATB Financial as lead arranger and
administrative agent, with Canadian Western Bank, HSBC Bank Canada
and The Toronto Dominion Bank to provide the Company with committed
financing by way of a three-year $99,000 credit facility available at closing
comprised of a $74,000 term loan, a
$15,000 revolving borrowing base loan
and a $10,000 revolving line.
On July 19 2022, the Company
purchased the remaining 9.02% shares of LEXA were acquired on the
same terms as previously disclosed.by issuing 159,836 common shares
of Cathedral.
RESULTS OF OPERATIONS – THREE MONTHS ENDED JUNE 30
Revenues
|
2022
|
2021
|
Canada
|
$
13,091
|
$
3,207
|
United
States
|
14,561
|
4,115
|
Total
|
$
27,652
|
$
7,322
|
Revenues 2022 Q2 revenues were
$27,652, which represented an
increase of $20,330 or 278% from 2021
Q2 revenues of $7,322.
Canadian revenues (excluding motor rental revenues) increased to
$12,214 in 2022 Q2 from $3,012 in 2021 Q2; a 306% increase. This
increase was the result of: i) a 218% increase in activity days to
1,442 in 2022 Q2 from 453 in 2021 Q2 and ii) a 27% increase in the
average day rate to $8,470 in 2022 Q2
from $6,649 in 2021 Q2.
Based on publicly disclosed Canadian drilling and directional
drilling days, Cathedral's market share for 2022 Q2 was 15.4%
compared to 7.3% in 2021 Q2. Day rates increased due to an
overall increases in day rates along with client mix changes.
U.S. revenues (excluding motor rental revenues) increased 35% to
$4,700 in 2022 Q2 from $3,471 in 2021 Q2. This increase was the
result of: i) an 18% increase in activity days to 498 in 2022 Q2
from 421 in 2021 Q2; and ii) a 14% increase in the average day rate
to $9,439 in 2022 Q2 from
$8,245 in 2021 Q2 (when converted to
Canadian dollars).
The average active land rig count for the U.S. was up 59% in
2022 Q2 compared to 2021 Q2 (source: Baker Hughes). The
Company experienced a 4% increase in rigs followed resulting in a
decrease in market share to 0.7% compared to 1.0% in 2021 Q2.
Day rates in USD increased 10% to $7,401
USD in 2022 Q2 from $6,722 USD
in 2021 Q2. Revenue day rates increased primarily due to a
change in client mix.
Motor rentals increased in both Canada and the U.S. Combined rental
revenues increased to $10,738 in 2022
Q2 compared to $839 in 2021 Q2.
Rentals were up due to the Discovery acquisition and the overall
industry increase in drilling activity.
Gross margin and adjusted gross
margin Gross margin for 2022 Q2 was 2%
compared to (45%) in 2021 Q2. Adjusted gross margin (see
Non-GAAP Measurements) for 2022 Q2 was $5,245 or 19% compared to ($428) or -6% for 2021 Q2.
Adjusted gross margin, as a percentage of revenue, increased due
to lower field labour, repairs, rentals and a reduction in fixed
costs as percentage of revenue.
Depreciation of equipment allocated to cost of sales increased
to $4,622 in 2022 Q2 from
$2,825 in 2021 Q2 due to the asset
acquisitions in 2021 and 2022. Depreciation included in cost
of sales as a percentage of revenue was 17% for 2022 Q2 and 39% in
2021 Q2.
Selling, general and administrative ("SG&A")
expenses SG&A expenses were
$3,526 in 2022 Q2; an increase of
$1,428 compared with $2,098 in 2021 Q2. There were increases in
SG&A wages, commissions and reduced CEWS grants. As a
percentage of revenue, SG&A was 13% in 2022 Q2 compared to 29%
in 2021 Q2.
Technology group expenses
Technology group expenses were $231
in 2022 Q2; an increase of $69
compared with $162 in 2021 Q2.
Technology group expenses are related to new product development
and supporting and upgrading existing technology. Technology group
expenses consist of salaries and related benefits and burdens as
well as shop supplies.
Gain (loss) on disposal of
equipment During 2022 Q2, the Company
had a gain on disposal of equipment of $1,298 compared to $56 in 2021 Q2. These gains are mainly
related to equipment lost-in-hole. Proceeds from clients on
lost-in-hole equipment are based on amounts specified in service
agreements. The timing of lost-in-hole recoveries is not in
the control of the Company and therefore can fluctuate
significantly from quarter-to-quarter. In 2022 Q2, the
Company received proceeds on disposal of equipment of $3,091 (2021 Q2 - $77).
Finance costs Finance costs
consisting of interest expenses on loans and borrowings and bank
charges were $295 for 2022 Q2
compared to $106 for 2021 Q2 due to
the increase in debt level and increases in interest rates.
Finance costs lease liability
Lease liability interest decreased slightly
to $195 from $201.
Acquisition and restructuring costs
Acquisition and restructuring costs were $332 in 2022 Q2 compared to $528 in 2021 Q2. These costs consist of
professional and consulting fees on business combinations and
subsequent restructuring costs including severance.
Foreign exchange The Company had
a foreign exchange loss of ($873) in
2022 Q2 compared to a gain $472 in
2021 Q2 due to the fluctuations of the Canadian dollar relative to
the U.S. dollar. The Company's foreign operations are
denominated in USD and therefore, upon consolidation, gains and
losses due to fluctuations in the foreign currency exchange rates
are recorded as other comprehensive income on the balance sheet as
a component of equity. However, gains and losses in the
Canadian entity on U.S. denominated intercompany balances continue
to be recognized in the statement of comprehensive income
(loss). Included in the 2022 Q2 foreign currency gain is an
unrealized loss of ($758) (2021 Q2 –
gain of $478) related to intercompany
balances.
Income tax Income tax expense is
booked based upon expected annualized rates using the statutory
rates of 23% for Canada and 22%
for the U.S. The current period recovery relates to the offset of
deferred tax liabilities related to acquisitions with tax pools for
which the benefit had not been previously recognized.
RESULTS OF OPERATIONS – SIX MONTHS ENDED JUNE 30
Revenues
|
2022
|
2021
|
Canada
|
$
38,490
|
$
11,308
|
United
States
|
23,547
|
7,379
|
Total
|
$
62,037
|
$
18,687
|
Revenues 2022 revenues were
$62,037, which represented an
increase of $43,350 or 232% from 2021
revenues of $18,687.
Canadian revenues (excluding motor rental revenues) increased to
$36,681 in 2022 from $10,452 in 2021; a 251% increase. This
increase was the result of: i) a 178% increase in activity days to
4,495 in 2022 from 1,616 in 2021 and ii) a 26% increase in the
average day rate to $8,160 in 2022
from $6,468 in 2021.
Based on publicly disclosed Canadian drilling and directional
drilling days, Cathedral's market share for 2022 was 18.2% compared
to 9.3% in 2021. Day rates increased due to certain ancillary
revenues along with overall increases in day rates and changes in
client mix.
U.S. revenues (excluding motor rental revenues) increased 42% to
$8,767 in 2022 from $6,177 in 2021. This increase was the
result of: i) a 32% increase in activity days to 924 in 2022 from
700 in 2021; and ii) a 8% increase in the average day rate to
$9,488 in 2022 from $8,825 in 2021 (when converted to Canadian
dollars).
The average active land rig count for the U.S. was up 62% in
2022 compared to 2021 (source: Baker Hughes). The Company
experienced a 15% increase in rigs which resulted in a decrease in
market share to 0.7% in 2022 compared to 1.0% in 2021. Day
rates in USD increased 5% to $7,464
USD in 2022 from $7,095 USD in
2021. Revenue day rates increased due to primarily an
increase in client mix.
Motor rentals increased in both Canada and the U.S. Combined rental
revenues increased to $16,588 in 2022
compared to $2,057 in 2021.
Rentals were up due to the Discovery acquisition and the overall
industry increase in drilling activity.
Gross margin and adjusted gross
margin Gross margin for 2022 was 10%
compared to (20%) in 2021. Adjusted gross margin (see
Non-GAAP Measurements) for 2022 was $15,107 or 24% compared to $2,000 or 11% for 2021.
Adjusted gross margin, as a percentage of revenue, increased due
to lower field labour, repairs and a reduction in fixed costs as
percentage of revenue, partially offset by increases in
rentals.
Depreciation of equipment allocated to cost of sales increased
to $8,911 in 2022 from $5,712 in 2021 due to the asset acquisitions in
2021 and 2022. Depreciation included in cost of sales as a
percentage of revenue was 14% for 2022 and 31% in 2021.
Selling, general and administrative ("SG&A")
expenses SG&A expenses were $7,248 in 2022; an increase of $3,457 compared with $3,791 in 2021. There were increases in
SG&A wages, commissions and reduced CEWS grants. As a
percentage of revenue, SG&A was 12% in 2022 compared to 20% in
2021.
Technology group expenses
Technology group expenses were $450
in 2022; an increase of $100 compared
with $350 in 2021. Technology
group expenses are related to new product development and
supporting and upgrading existing technology. Technology group
expenses consist of salaries and related benefits and burdens as
well as shop supplies.
Gain (loss) on disposal of
equipment During 2022, the Company had
a gain on disposal of equipment of $2,120 compared to $244 in 2021. These gains are mainly
related to equipment lost-in-hole. Proceeds from clients on
lost-in-hole equipment are based on amounts specified in service
agreements. The timing of lost-in-hole recoveries is not in
the control of the Company and therefore can fluctuate
significantly from quarter-to-quarter. In 2022, the Company
received proceeds on disposal of equipment of $4,324 (2021 - $298).
Finance costs Finance costs
consisting of interest expenses on loans and borrowings and bank
charges were $524 for 2022 compared
to $189 for 2021 due to the increase
in debt level and increases in interest rates.
Finance costs lease liability
Lease liability interest decreased slightly
to $384 from $410.
Acquisition and restructuring costs
Acquisition and restructuring costs were $392 in 2022 compared to $608 in 2021. These costs consist of
professional and consulting fees on business combinations and
subsequent restructuring costs including severance.
Foreign exchange The Company had
a foreign exchange loss of ($563) in
2022 compared to a gain of $918 in
2021 due to the fluctuations of the Canadian dollar relative to the
U.S. dollar. The Company's foreign operations are denominated
in USD and therefore, upon consolidation, gains and losses due to
fluctuations in the foreign currency exchange rates are recorded as
other comprehensive income on the balance sheet as a component of
equity. However, gains and losses in the Canadian entity on
U.S. denominated intercompany balances continue to be recognized in
the statement of comprehensive income (loss). Included in the
2022 foreign currency gain is an unrealized loss of ($463) (2021 – gain of $922) related to intercompany balances.
Income tax Income tax expense is
booked based upon expected annualized rates using the statutory
rates of 23% for both Canada and
22% for the U.S. The current period recovery relates to the offset
of deferred tax liabilities related to acquisitions with tax pools
for which the benefit had not been previously recognized.
LIQUIDITY AND CAPITAL
RESOURCES
Overview On an annualized basis, the
Company's principal source of liquidity is cash generated from
operations and proceeds from equipment lost-in-hole. In
addition, the Company has the ability to fund liquidity
requirements through its credit facility and the issuance of debt
and/or equity. Cash flow - operations in 2022 was a
source of cash of $2,753 compared to
a use of cash of ($2,300) in 2021.
This change was primarily due to increases in cash flow from
improved drilling activity in 2022 and Cathedral's increase in
Canadian market share .
Working capital At June 30, 2022 the Company had working capital of
$21,342 (December 31, 2021 - $14,117).
Contractual obligations In the
normal course of business, the Company incurs contractual
obligations and those obligations are disclosed in the Company's
annual financial statements for the year ended December 31, 2021.
As at June 30, 2022, the Company's
has a commitment to purchase equipment of $1,268 which is expected to be incurred in 2022
Q3 and Q4.
The Company has issued the following six letters of credit
("LOC"):
- three securing rent payments on property leases and renew
annually with the landlords. Two LOCs total $700 CAD for the first ten years of the lease and
then reduce to $500 for the last five
years of the leases. The third LOC is currently for $630 USD and increases annually based upon annual
changes in rent;
- two securing the Company's corporate credit cards in the
amounts of $75 CAD and $175 USD; and
- one in lieu of cash deposit for utilities in the amounts of
$55 CAD.
Share capital At August 9, 2022, the Company has 214,934,195
common shares, 21,468,350 common share purchase warrants and
18,613,468 options outstanding with a weighted average exercise
price of $0.53.
In 2022 Q1, the Company issued 380,000 stock options to staff
with an exercise price of $0.77 per
option.
2022 CAPITAL PROGRAM
During the six months ended June 30,
2022, the Company invested $9,522 (2021 - $591) in equipment, excluding acquisitions.
The following table details the current period's net equipment
additions:
|
|
|
Six months
ended
|
|
June 30,
2022
|
Equipment
additions:
|
|
Motors
|
$
2,825
|
MWD
|
6,671
|
Other
|
26
|
Total cash
additions
|
$
9,522
|
The additions of $9,522 were
partially funded by proceeds on disposal of equipment of
$4,324.
The Company's estimated 2022 gross capital plan consists of
legacy capital plans that is unchanged at $14,900, excluding any potential acquisitions and
replacement of equipment lost-in-hole and has been increased by
capital additions on the Altitude acquisition of approximately
$11,000 USD. It is anticipated
that a portion of the $11,000 USD
additions for Altitude could be carried over into the 2023 capital
plan.
OUTLOOK
Financial markets are currently trying to assess the extent of
any US and global recession as well as any resulting impact on oil
and natural gas demand. Over the summer, there has been ample
volatility in various commodity markets, but oil and natural gas
prices have proved stubbornly resistant to any material fall-off.
Years of underinvestment in the global oil business combined with
the pull-back in spending on the natural gas side via Covid-19
shut-downs have created a situation of considerable undersupply of
both critically important commodities in the global economy. The
war in Ukraine has added further
pressure on supplies especially into Europe. Heading into the
fall and winter, the supply situation is growing increasingly
troublesome and major economies in Europe may face severe rationing leading to
economic contraction.
Notwithstanding the considerable uncertainties in global oil and
gas markets, the E&P spending backdrop in North America remains very constructive. A
recent industry analysis of E&P cash flow vs capital spending
levels revealed a dramatically lower reinvestment rate versus
investment levels over the last decade. E&P companies have
pursued balance sheet repair, share buy-backs and growing dividends
vs major levels of field reinvestment, which should add
considerable duration to the current upcycle. Commentary from
many energy service companies is that in this upcycle, the pursuit
is higher margins and not equipment capacity. This is an important
reason Cathedral remains optimistic that the back half of 2022 and
2023 will be strong for the Company.
Current Canadian rig count forecasts range from an average of
155-175 rigs working in 2022 (up roughly 30% y/y) moving to an
average of 195-210 rigs working in 2023 (up another 10-15%). On the
U.S. side, analyst estimates are consolidating around an average of
700 rigs working in 2022 (up over 50% y/y) and almost 800 average
rigs working in 2023 (up 13% y/y). Cathedral estimates that 92-95%
of wells are directionally drilled in the current North American
drilling marketplace. As such, rig count forecasts correlate very
tightly to directional drilling activity levels. On the pricing
side, management expects continued strengthening through the
balance of 2022 and into 2023 as part of a tight supply/demand
balance for equipment (and most importantly) field personnel. [Rig
Count forecasts: ATB Capital, BMO Capital Markets, Stifel
FirstEnergy, National Bank Financial, Peters & Co, Raymond
James, TD Securities]
On the corporate side, Cathedral plans to introduce its own
rotary steerable offering into the Canadian marketplace as a direct
competitor to the incumbent provider. Rotary steerable is an
important growth market and Cathedral is optimistic that it will be
very competitive going forward. Growth in Montney and Deep Basin activity should also
begin in the coming quarters and years around a longer-term ramp-up
of Canadian natural gas production for LNG Canada (Late 2024/25
first gas export). Finally, Cathedral begins the third quarter with
a very busy Altitude operation in the US. The Permian remains one
of the world's most important areas for growth in oil and natural
gas liquids and Altitude has a significant presence there as well
as in the other major U.S. oil and gas plays. Cathedral aims to
begin making its broader technology capabilities available across
its large North American platform in order to begin realizing the
inherent synergies of our six acquisitions.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
Canadian securities laws. All statements other than
statements of present or historical fact are forward-looking
statements. Forward-looking statements are often, but not
always, identified by the use of words such as "anticipate",
"achieve", "believe", "plan", "intend", "objective", "continuous",
"ongoing", "estimate", "outlook", "expect", "may", "will",
"project", "should" or similar words suggesting future
outcomes. In particular, this news release contains
forward-looking statements relating to, among other things:
subsequent events; the emphasis over the next several quarters will
be to bring net debt levels down markedly; operating cash flows are
expected to exceed capital spending needs by a considerable margin
such that improvements in leverage ratios will be quickly
noticeable; the Company expects the culmination of those efforts
will generate high levels of free cash flow, a strong balance
sheet, and a robust Company into the future; heading into the fall
and winter, the supply situation is growing increasingly
troublesome and major economies in Europe may face severe rationing leading to
economic contraction; the E&P spending backdrop in North America remains very constructive;
Cathedral remains optimistic that the back half of 2022 and 2023
will be strong for the Company; current Canadian rig count
forecasts range from an average of 155-175 rigs working in 2022
moving to an average of 195-210 rigs working in 2023; on the U.S.
side, analyst estimates are consolidating around an average of 700
rigs working in 2022 and almost 800 average rigs working in 2023;
on the pricing side, management expects continued strengthening
through the balance of 2022 and into 2023 as part of a tight
supply/demand balance for equipment (and most importantly) field
personnel; Cathedral plans to introduce its own rotary
steerable offering into the Canadian marketplace; growth in
Montney and Deep Basin activity
should also begin in the coming quarters and years around a
longer-term ramp-up of Canadian natural gas production for LNG
Canada (late 2024/25 first gas export); Cathedral aims to begin
making its broader technology capabilities available across its
large North American platform in order to begin realizing the
inherent synergies of our six acquisitions; and projected capital
expenditures and commitments and the financing thereof.
The Company believes the expectations reflected in such
forward-looking statements are reasonable as of the date hereof but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements should not be unduly
relied upon.
Various material factors and assumptions are typically applied
in drawing conclusions or making the forecasts or projections set
out in forward-looking statements. Those material factors and
assumptions are based on information currently available to the
Company, including information obtained from third party industry
analysts and other third party sources. In some instances,
material assumptions and material factors are presented elsewhere
in this MD&A in connection with the forward-looking
statements. You are cautioned that the following list of
material factors and assumptions is not exhaustive. Specific
material factors and assumptions include, but are not limited
to:
- the performance of Cathedral's business
- impact of economic and social trends;
- oil and natural gas commodity prices and production
levels;
- the ongoing impact of the global health crisis and
COVID-19;
- capital expenditure programs and other expenditures by
Cathedral and its customers;
- the ability of Cathedral to retain and hire qualified
personnel;
- the ability of Cathedral to obtain parts, consumables,
equipment, technology, and supplies in a timely manner to carry out
its activities;
- the ability of Cathedral to maintain good working relationships
with key suppliers;
- the ability of Cathedral to retain customers, market its
services successfully to existing and new customers and reliance on
major customers;
- risks associated with technology development and intellectual
property rights;
- obsolesce of Cathedral's equipment and/or technology;
- the ability of Cathedral to maintain safety performance;
- the ability of Cathedral to obtain adequate and timely
financing on acceptable terms;
- the ability of Cathedral to comply with the terms and
conditions of its credit facility;
- the ability to obtain sufficient insurance coverage to mitigate
operational risks;
- currency exchange and interest rates;
- risks associated with future foreign operations;
- the ability of Cathedral to integrate its transactions and the
benefits of any acquisitions, dispositions and business development
efforts;
- environmental risks;
- business risks resulting from weather, disasters and related to
information technology;
- changes under governmental regulatory regimes and tax,
environmental, climate and other laws in Canada and the U.S.; and
- competitive risks.
Forward-looking statements are not a guarantee of future
performance and involve a number of risks and uncertainties some of
which are described herein. Such forward-looking statements
necessarily involve known and unknown risks and uncertainties,
which may cause the Company's actual performance and financial
results in future periods to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties
include, but are not limited to, the risks identified in this
MD&A and in the Company's Annual Information Form under the
heading "Risk Factors". Any forward-looking statements are
made as of the date hereof and, except as required by law, the
Company assumes no obligation to publicly update or revise such
statements to reflect new information, subsequent or otherwise.
All forward-looking statements contained in this MD&A are
expressly qualified by this cautionary statement. Further
information about the factors affecting forward-looking statements
is available in the Company's current Annual Information Form that
has been filed with Canadian provincial securities commissions and
is available on www.sedar.com.
NON-GAAP MEASUREMENTS
Cathedral uses certain performance measures throughout this
document that are not defined under GAAP. Management believes that
these measures provide supplemental financial information that is
useful in the evaluation of Cathedral's operations and are commonly
used by other oilfield companies. Investors should be cautioned,
however, that these measures should not be construed as
alternatives to measures determined in accordance with GAAP as an
indicator of Cathedral's performance. Cathedral's method of
calculating these measures may differ from that of other
organizations, and accordingly, may not be comparable.
The specific measures being referred to include the
following:
i) "Adjusted gross margin" - calculated as gross margin plus
non-cash items (depreciation and share-based compensation); is
considered a primary indicator of operating performance (see
tabular calculation);
ii) "Adjusted gross margin %" - calculated as adjusted gross
margin divided by revenues; is considered a primary indicator of
operating performance (see tabular calculation);
iii) "Adjusted EBITDAS" - defined as earnings before finance
costs, unrealized foreign exchange on intercompany balances, taxes,
depreciation, non-recurring costs (including acquisition and
restructuring costs and non-cash provision for bad debts),
write-down of equipment, write-down of inventory and share-based
compensation; is considered an indicator of the Company's ability
to generate funds flow from operations prior to consideration of
how activities are financed, how the results are taxed and non-cash
expenses (see tabular calculation);
The following tables provide reconciliations from GAAP
measurements to non-GAAP measurements referred to in this
MD&A:
Adjusted gross margin
|
Three months ended June
30
|
Six months ended June
30
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Gross margin
|
$
|
574
|
$
|
(3,279)
|
$
|
6,104
|
$
|
(3,746)
|
Add non-cash items
included in cost of sales:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,622
|
|
2,825
|
|
8,911
|
|
5,712
|
Share-based
compensation
|
|
49
|
|
26
|
|
92
|
|
34
|
Adjusted gross
margin
|
$
|
5,245
|
$
|
(428)
|
$
|
15,107
|
$
|
2,000
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
%
|
|
19 %
|
|
-6 %
|
|
24 %
|
|
11 %
|
Adjusted EBITDAS
|
Three months ended June
30
|
Six months ended June
30
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income (loss) before
income taxes
|
$
|
(3,580)
|
$
|
(5,846)
|
$
|
(1,337)
|
$
|
(7,932)
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation included
in cost of sales
|
|
4,622
|
|
2,825
|
|
8,911
|
|
5,712
|
Depreciation included
in selling, general and administrative expenses
|
|
124
|
|
133
|
|
248
|
|
267
|
Share-based
compensation included in cost of sales
|
|
49
|
|
26
|
|
92
|
|
34
|
Share-based
compensation included in selling, general and administrative
expenses
|
|
83
|
|
28
|
|
174
|
|
49
|
Finance
costs
|
|
295
|
|
106
|
|
524
|
|
189
|
Finance costs lease
liabilities
|
|
195
|
|
201
|
|
384
|
|
410
|
Subtotal
|
|
1,788
|
|
(2,527)
|
|
8,996
|
|
(1,271)
|
Unrealized foreign
exchange (gain) loss on intercompany balances
|
|
758
|
|
(478)
|
|
463
|
|
(922)
|
Non-recurring
expenses
|
|
319
|
|
528
|
|
379
|
|
653
|
Total Adjusted
EBITDAS
|
$
|
2,865
|
$
|
(2,477)
|
$
|
9,838
|
$
|
(1,540)
|
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
June 30, 2022
and 2021
Dollars in '000s
(Unaudited)
|
June
30
|
December
31
|
|
|
2022
|
|
2021
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
$
|
11,312
|
$
|
2,898
|
Trade
receivables
|
|
23,845
|
|
15,609
|
Prepaid
expenses
|
|
968
|
|
1,438
|
Inventories
|
|
12,731
|
|
8,423
|
Current tax
recoveries
|
|
170
|
|
-
|
Total current
assets
|
|
49,026
|
|
28,368
|
Equipment
|
|
61,074
|
|
35,044
|
Intangible
assets
|
|
2,167
|
|
1,491
|
Right of use
asset
|
|
11,106
|
|
10,520
|
Total non-current
assets
|
|
74,347
|
|
47,055
|
Total assets
|
$
|
123,373
|
$
|
75,423
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade and other
payables
|
$
|
15,567
|
$
|
11,069
|
Current taxes
payable
|
|
-
|
|
55
|
Loans and borrowings,
current
|
|
9,170
|
|
1,000
|
Lease liabilities,
current
|
|
2,947
|
|
2,127
|
Total current
liabilities
|
|
27,684
|
|
14,251
|
Loans and
borrowings
|
|
-
|
|
5,035
|
Lease liabilities,
long-term
|
|
13,499
|
|
13,633
|
Total non-current
liabilities
|
|
13,499
|
|
18,668
|
Total
liabilities
|
|
41,183
|
|
32,919
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Share
capital
|
|
136,046
|
|
98,918
|
Treasury
shares
|
|
(959)
|
|
-
|
Contributed
surplus
|
|
15,087
|
|
11,793
|
Accumulated other
comprehensive income
|
|
9,638
|
|
9,011
|
Deficit
|
|
(77,799)
|
|
(77,218)
|
Non-controlling
interest
|
|
177
|
|
-
|
Total shareholders'
equity
|
|
82,190
|
|
42,504
|
Total liabilities and
shareholders' equity
|
$
|
123,373
|
$
|
75,423
|
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME (LOSS)
Three and six months
ended June 30, 2022 and
2021
Dollars in '000s except per share amounts
(Unaudited)
|
Three months ended June
30
|
Six months ended June
30
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
$
|
27,652
|
$
|
7,322
|
$
|
62,037
|
$
|
18,687
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Direct costs
|
|
(22,407)
|
|
(7,750)
|
|
(46,930)
|
|
(16,687)
|
Depreciation
|
|
(4,622)
|
|
(2,825)
|
|
(8,911)
|
|
(5,712)
|
Share-based
compensation
|
|
(49)
|
|
(26)
|
|
(92)
|
|
(34)
|
Total cost of
sales
|
|
(27,078)
|
|
(10,601)
|
|
(55,933)
|
|
(22,433)
|
Gross margin
|
|
574
|
|
(3,279)
|
|
6,104
|
|
(3,746)
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
|
|
|
Direct costs
|
|
(3,319)
|
|
(1,937)
|
|
(6,826)
|
|
(3,475)
|
Depreciation
|
|
(124)
|
|
(133)
|
|
(248)
|
|
(267)
|
Share-based
compensation
|
|
(83)
|
|
(28)
|
|
(174)
|
|
(49)
|
Total selling, general
and administrative expenses
|
|
(3,526)
|
|
(2,098)
|
|
(7,248)
|
|
(3,791)
|
Technology group
expenses
|
|
(231)
|
|
(162)
|
|
(450)
|
|
(350)
|
Gain on disposal of
equipment
|
|
1,298
|
|
56
|
|
2,120
|
|
244
|
Income (loss) from
operating activities
|
|
(1,885)
|
|
(5,483)
|
|
526
|
|
(7,643)
|
Finance
costs
|
|
(295)
|
|
(106)
|
|
(524)
|
|
(189)
|
Finance costs lease
liabilities
|
|
(195)
|
|
(201)
|
|
(384)
|
|
(410)
|
Acquisition and
restructuring costs
|
|
(332)
|
|
(528)
|
|
(392)
|
|
(608)
|
Foreign exchange gain
(loss)
|
|
(873)
|
|
472
|
|
(563)
|
|
918
|
Loss before income
taxes
|
|
(3,580)
|
|
(5,846)
|
|
(1,337)
|
|
(7,932)
|
Deferred tax
recovery
|
|
756
|
|
-
|
|
756
|
|
-
|
Loss
|
|
(2,824)
|
|
(5,846)
|
|
(581)
|
|
(7,932)
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Foreign currency
translation differences for foreign operations
|
|
983
|
|
(476)
|
|
627
|
|
(929)
|
Total comprehensive
income (loss)
|
$
|
(1,841)
|
$
|
(6,322)
|
$
|
46
|
$
|
(8,861)
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.02)
|
$
|
(0.11)
|
$
|
(0.01)
|
$
|
(0.15)
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
Three and six months ended June 30, 2022 and 2021
Dollars in
'000s
(Unaudited)
|
Three months
ended June 30
|
Six months ended June
30
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash provided by
(used in):
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Loss
|
$
|
(2,824)
|
$
|
(5,846)
|
$
|
(581)
|
$
|
(7,932)
|
Items not involving
cash
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
(756)
|
|
-
|
|
(756)
|
|
-
|
Depreciation
|
|
4,746
|
|
2,958
|
|
9,159
|
|
5,979
|
Share-based
compensation
|
|
132
|
|
54
|
|
266
|
|
83
|
Gain on disposal of
equipment
|
|
(1,298)
|
|
(56)
|
|
(2,120)
|
|
(244)
|
Finance
costs
|
|
295
|
|
106
|
|
524
|
|
189
|
Finance costs lease
liability
|
|
195
|
|
201
|
|
384
|
|
410
|
Unrealized foreign
exchange (gain) loss on intercompany balances
|
|
758
|
|
(478)
|
|
463
|
|
(922)
|
Cash flow - continuing
operations
|
|
1,248
|
|
(3,061)
|
|
7,339
|
|
(2,437)
|
Changes in non-cash
operating working capital
|
|
3,243
|
|
1,212
|
|
(4,614)
|
|
180
|
Income taxes
paid
|
|
20
|
|
(43)
|
|
28
|
|
(43)
|
Cash flow - operating
activities
|
|
4,511
|
|
(1,892)
|
|
2,753
|
|
(2,300)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Equipment additions in
normal course
|
|
(6,218)
|
|
(737)
|
|
(9,522)
|
|
(1,328)
|
Cash paid on
acquisitions
|
|
(4,000)
|
|
-
|
|
(22,160)
|
|
-
|
Proceeds on disposal of
equipment
|
|
3,091
|
|
77
|
|
4,324
|
|
298
|
Cash acquired on
acquisition
|
|
70
|
|
|
|
70
|
|
-
|
Changes in non-cash
investing working capital
|
|
1,046
|
|
271
|
|
841
|
|
(118)
|
Cash flow - investing
activities
|
|
(6,011)
|
|
(389)
|
|
(26,447)
|
|
(1,148)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Proceeds on share
issue
|
|
24,686
|
|
3,163
|
|
31,160
|
|
3,393
|
Advances on loans and
borrowings
|
|
-
|
|
1,586
|
|
19,859
|
|
3,659
|
Repayments on loans and
borrowings
|
|
(10,779)
|
|
(1,915)
|
|
(16,723)
|
|
(1,915)
|
Repayments of lease
liabilities
|
|
(733)
|
|
(585)
|
|
(1,336)
|
|
(1,165)
|
Interest
paid
|
|
(490)
|
|
(307)
|
|
(908)
|
|
(599)
|
Payment on
settlements
|
|
-
|
|
(37)
|
|
-
|
|
(75)
|
Cash flow - financing
activities
|
|
12,684
|
|
1,905
|
|
32,052
|
|
3,298
|
Effect of exchange rate
on changes on cash
|
|
87
|
|
(15)
|
|
56
|
|
(29)
|
Change in
cash
|
|
11,271
|
|
(391)
|
|
8,414
|
|
(179)
|
Cash, beginning of
period
|
|
41
|
|
1,246
|
|
2,898
|
|
1,034
|
Cash, end of
period
|
$
|
11,312
|
$
|
855
|
$
|
11,312
|
$
|
855
|
Cathedral Energy Services Ltd., based in Calgary, Alberta is incorporated under the
Business Corporations Act (Alberta) and operates in the U.S. under
Cathedral Energy Services Inc. Cathedral is publicly traded on the
Toronto Stock Exchange under the symbol "CET". Cathedral is a
trusted partner to North American energy companies requiring high
performance directional drilling services. We work in partnership
with our customers to tailor our equipment and expertise to meet
their specific geographical and technical needs. Our experience,
technologies and responsive personnel enable our customers to
achieve higher efficiencies and lower project costs. For more
information, visit www.cathedralenergyservices.com.
SOURCE Cathedral Energy Services Ltd.