Ensign Energy Services Inc. Reports 2016 First Quarter Results

CALGARY, May 9, 2016

OVERVIEW

Revenue for the first quarter of 2016 was $258.5 million, a decrease of 42 percent from revenue for the first quarter of 2015 of $449.3 million. Revenue, net of third party, for the first quarter of 2016 was $226.9 million, a decrease of 43 percent from Revenue, net of third party, for the first quarter of 2015 of $398.6 million. Adjusted EBITDA totaled $59.6 million ($0.39 per common share) in the first quarter of 2016, 47 percent lower than Adjusted EBITDA of $112.3 million ($0.74 per common share) in the first three months of 2015. Net loss for the first quarter of 2016 was $14.9 million ($0.10 per common share), compared to net income of $15.4 million ($0.10 per common share) for the first quarter of 2015. Adjusted net loss for the first quarter of 2016 was $25.1 million ($0.16 per common share), compared to Adjusted net income of $27.7 million ($0.18 per common share) for the first quarter of 2015. Funds from operations decreased 50 percent to $55.2 million ($0.36 per common share) in the first three months of 2016 as compared to $109.8 million ($0.72 per common share) in the first three months of the prior year. 

Operating days across the Company's fleet were lower in the first quarter of 2016 when compared to the first quarter of 2015 due to weaker demand for oilfield services caused by low oil and natural gas commodity prices. In the quarter, a strengthening year-over-year of the United States dollar against the Canadian dollar positively impacted United States and international financial results on translation to Canadian dollars. The average United States exchange rate was 1.3748 for the first quarter of 2016 (first quarter of 2015 - 1.2411) versus the Canadian dollar, an increase of 11 percent, compared to the first three months of 2015.

Gross margin decreased to $76.2 million (34 percent of Revenue, net of third party) for the first quarter of 2016 compared to a gross margin of $133.8 million (34 percent of Revenue, net of third party) for the first quarter of 2015. The decrease in gross margin in the first quarter of 2016 compared to the first quarter of 2015 was primarily attributed to weaker activity levels and lower revenue rates across the oilfield service equipment fleet.

Working capital at March 31, 2016 was $3.6 million, compared to $144.2 million at December 31, 2015, largely due to a portion of long-term debt (USD $100.0 million of senior unsecured notes bearing interest at 3.43 percent, due February 22, 2017) maturing within the next 12 months. The Company's bank credit facilities provide unused and available borrowings of $277.8 million at March 31, 2016, up by $57.7 million, compared to $220.1 million at December 31, 2015.

FINANCIAL AND OPERATING HIGHLIGHTS