CALGARY, ALBERTA -- (Marketwire) -- 03/13/13 -- GASFRAC (TSX: GFS) announced fourth quarter 2012 revenues of $46.9 million resulting in EBITDA of $7.7 million, including $1.9 million of insurance proceeds. Sequentially this represented an increase from $40.9 million of revenue and $1.0 million of EBITDA in the third quarter of 2012. In the fourth quarter of 2011 EBITDA was $7.9 million on revenues of $59.3 million.
James Hill, Chief Financial Officer commented "I am proud of what our team accomplished during the fourth quarter. The impact of decisions made late in the third quarter are reflected in our fourth quarter results. Sequentially we have achieved a reduction in fixed costs of more than $3.5 million in the quarter and are on track to driving our breakeven quarterly revenue to $30 million from its $40 million level in the third quarter. With a more sustainable cost structure in place we are focused on expanding our customer and revenue base through targeted selling driven by providing customer solutions and value. In particular, the augmentation of our service portfolio to include hybrid delivery and tailored high reid vapour pressure fluids expands our market and enhances value for our customers.
Late in the quarter we completed our first hybrid frac and performed the second in early February. These jobs were very successful and augment the Company's service delivery with a premium process allowing us to pump up to 300 tonnes of proppant per day. We will continue to refine this hybrid process to further expand our daily tonnage delivery. In addition we now have added the ability to tailor our frac fluid for specific suitability to the customer's formation allowing for the use of local fluid sources and recovery of the fluid through flowback into pressure tanks or into the gathering system. Both of these initiatives reduce total service cost for our customers and enhance our seamless delivery of service (frac to production).
I am also pleased to announce that GASFRAC was awarded the Leading Technologies Award - Commercial Application at the Platts 2012 Global Energy Awards."
Pursuant to our operations review initiated in the third quarter, we have parked five sets of equipment and during the fourth quarter we have recorded an impairment to those assets of $45 million.
Two of the Company's key patents (Liquified Petroleum Gas Fracturing System - Gas Blanket and Proppant Addition System and Method) have now been issued/allowed in the USA. These patents cover the key intellectual property surrounding the process of safely fracturing using LPG.
The board of directors special committee has conducted a search for a CEO over the last several months, utilizing an executive search firm. A number of potential candidates have been identified and interviewed and the board plans to make a decision within the next 60 days.
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
Management's discussion and analysis ("MD&A") of the financial condition and the results of operations should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012 of GASFRAC Energy Services Inc. ("GASFRAC" or the "Company"), together with the accompanying notes. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
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