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Divestco Reports Q4 2012 Results

Apr 30 2013 12:00AM

Marketwire

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CALGARY, ALBERTA -- (Marketwired) -- 04/30/13 -- Divestco Inc. (TSX VENTURE: DVT) ("Divestco" or the "Company") announces its operating results for the three months and year ended December 31, 2012.

Three months ended December 31, 2012

Divestco generated a net loss for the fourth quarter of 2012 of $1.2 million ($0.02 per share - basic and diluted) compared to a net loss of $0.8 million ($0.01 per share - basic and diluted) for the same period in 2011. EBITDA was $0.3 million in Q4 2012, a $3 million (91%) decrease from $3.3 million for the same period in 2011. The Company generated funds from operations of $10,000 ($nil per share - basic and diluted) for the fourth quarter of 2012, compared to $2.9 million ($0.05 per share - basic and diluted) for the same period in 2011. EBITDA and funds from operations do not include capital expenditures of $3.2 million, mainly comprised of the cost related to a new seismic program that commenced in Q4 2012.

During Q4 2012, Divestco generated revenue of $7.3 million compared to $11.4 million in Q4 2011, a decrease of $4.1 million (36%). Revenue in the Software and Data segment increased by $1.8 million (68%) due to a large data transaction completed during Q4 2012. Revenue in the Seismic Data segment decreased by $3.9 million (82%) attributable to the timing of multi- client surveys. In Q4 2012, the Company incurred $3.5 million in costs on a 3D seismic survey that was completed in Q1 2013. However there were a number of seismic data sales that did not close until Q1 2013. Revenue in the Services segment decreased by $2.1 million (49%) as demand for seismic processing and land management services was weaker, while demand for geomatics was slightly stronger.

Operating expenses decreased by $1.2 million (16%) to $7 million in Q4 2012 from $8.2 million in Q4 2011. Salaries and wages were up $101,000 (2%). G&A expenses were down $1.4 million (35%) as occupancy costs decreased by $1 million (45%) due to the Company surrendering a portion of its office space lease in 2011 and 2012. Professional fees decreased by $882,000 (61%), bad debt expense increased by $807,000 and direct selling costs decreased by $246,000 (80%). Depreciation and amortization decreased by $2.5 million (66%) mainly due to lower depreciation on seismic data as we completed a survey in Q4 2011 and did not complete any surveys in Q4 2012.

Year ended December 31, 2012

Divestco generated net income for year ended December 31, 2012 of $1.3 million ($0.02 per share - basic and diluted) compared to a net loss of $4.6 million ($0.08 per share - basic and diluted) for 2011. EBITDA was $12.4 million, a $6.3 million (102%) increase from $6.1 million for 2011. The Company generated funds from operations of $11.7 million ($0.17 per share - basic and diluted) for 2012, an increase of $6 million (103%) as compared to $5.7 million ($0.10 per share - basic and diluted) for 2011. EBITDA and funds from operations do not include capital expenditures of $12.6 million, mainly comprised of the cost of acquiring new seismic surveys data during 2012.

During the year ended December 31, 2012, Divestco generated revenue of $39.6 million compared to $40.5 million for 2011, a decrease of $0.9 million (2%). Revenue in the Software and Data segment increased by $3.3 million (35%) primarily due to two significant data transactions completed in 2012. Revenue in the Seismic Data segment decreased by $466,000 (3%) due to lower seismic brokerage revenue. However, the Company completed three seismic participation surveys, signed a large data library sale and reached a settlement agreement concerning one of its legal actions in 2012 related to seismic data revenues that were due to the Company. Revenue in the Services segment decreased by $3.7 million (21%) since demand for seismic processing and land management services was weaker and only partially offset by stronger demand for geomatics services.

Operating expenses decreased by $7.3 million (21%) to $27.2 million in 2012 from $34.5 million in 2011. Salaries and wages were down $1.1 million (6%) due to lower severance costs. G&A expenses were down $6.2 million (39%) as occupancy costs decreased by $4.8 million (51%) due to the Company surrendering a portion of its office space lease in 2011. Communication expenses were down $182,000 (40%), professional fees decreased by $1.3 million (42%) and direct selling costs decreased by $993,000 (73%), partially offset by an increase in bad debt expense by $918,000. Depreciation and amortization increased by $742,000 (7%) mainly due to the completion of three seismic participation surveys during 2012, partially offset by lower depreciation on property and equipment and deferred development costs.

Working Capital

Divestco ended fiscal 2012 with a working capital deficit of $7.5 million (December 31, 2011: $0.3 million surplus), excluding deferred revenue of $2.4 million (December 31, 2011 - $4.6 million). The decline in working capital from the end of 2011 was primarily due to an unpredictably slow Q3 and Q4 that directly impacted the Services segment and delayed the signing and delivery of several seismic data contracts. While the Company significantly reduced its payables since the end of 2011, receivables fell sharply as well. In addition, $843,000 of the subordinated loan was reclassified from long-term to current liabilities as compared to December 31, 2011 as the loan matures in May 2013. The Company's funded debt to equity ratio remained unchanged at 0.64:1 at December 31, 2012 from December 31, 2011 (0.64:1) as higher equity was offset by higher funded debt levels ($10.6 million at the end of 2012 compared to $9.4 million at the end of 2011).

Seismic Update

During 2012, Divestco completed three 3D seismic participation surveys (Brazeau, Big Valley and Ante Creek), covering an area of approximately 389 square kilometers. Total cost for the three seismic surveys was $14.3 million, with $5.1 million incurred in 2011. The Company also commenced another survey in Q4 2012 (Alder Flats) which was completed in Q1 2013.

Mr. Stephen Popadynetz, CEO, President and CFO: "Over the last two years Divestco has made great strides to improve its efficiencies and cut costs. Unfortunately, in the third quarter of 2012, we saw an unexpected slowdown in the industry which resulted in a net loss. This carried over initially into Q4 2012, but by the end of the quarter we were witnessing activity levels returning to normal. As such, we are confident that the Company will return to profitability. As well, Divestco remains committed to strengthening its financial position and balance sheet and we have continued to optimize our all aspects of our G&A (including excess office space). We are also pleased with the progress we have made towards rebuilding our seismic data library. To date, we have added more than 860 square kilometers of seismic to our library. Overall demand for seismic data and general activity levels in the industry is trending positively and Divestco is currently reviewing a number of new seismic programs for the coming year. With the strong cost cutting measures taken over the last two years in place, Divestco is on a well-positioned path for sustained profitability and growth. We look forward to delivering positive earnings and improved results for our shareholders."

Non-GAAP Measures

The Company's condensed consolidated interim financial statements have been prepared in accordance with IFRS. Certain measures in this document do not have any standardized meaning as prescribed by IFRS and are considered additional GAAP measures. While these measures may not be comparable to similar measures presented by other issuers, they are described and presented in this MD&A to provide shareholders and potential investors with additional information regarding the Company's results, liquidity, and its ability to generate funds to finance its operations. These measures include:

Earnings before interest, taxes, depreciation and amortization ("EBITDA")

Divestco uses EBITDA as a key measure to evaluate the performance of its segments and divisions as well as the Company overall, with the closest IFRS measure being net income or loss. EBITDA is a measure commonly reported and widely used by investors as indicators of the Company's operating performance and ability to incur and service debt, and as a valuation metric. The Company believes EBITDA assists investors in comparing the Company's performance on a consistent basis without regard to financing decisions and depreciation and amortization, which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.

EBITDA is not a calculation based on IFRS and should not be considered an alternative to net income or loss in measuring the Company's performance. As well, EBITDA should not be used as an exclusive measure of cash flow, because it does not consider the impact of working capital growth, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. While EBITDA has been disclosed herein to permit a more complete comparative analysis of the Company's operating performance and debt servicing ability relative to other companies, investors should be cautioned that EBITDA as reported by Divestco may not be comparable in all instances to EBITDA as reported by other companies. Investors should also carefully consider the specific items included in Divestco's computation of EBITDA.

The following is a reconciliation of EBITDA with net income (loss):

Three months ended Year ended December 31 December 31----------------------------------------------------------------------------(Thousands) 2012 2011 2012 2011----------------------------------------------------------------------------Net Income (Loss) $ (1,232) $ (768) $ 1,273 $ (4,610)Income Tax Expense - 25 (51) 86Finance Costs 251 252 531 759Depreciation and Amortization 1,292 3,823 10,646 9,904----------------------------------------------------------------------------EBITDA $ 311 $ 3,332 $ 12,399 $ 6,139----------------------------------------------------------------------------



Working capital

Working Capital is calculated as current assets minus current liabilities (excluding deferred revenue). Working capital provides a measure that can be used to gauge Divestco's ability to meet its current obligations.

Additional GAAP Measure

Funds from operations

Divestco reports funds from operations because it is a key measure used by management to evaluate its performance and to assess the ability of the Company to finance operating and investing activities. Funds from operations excludes certain working capital changes and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.

Funds from operations is not a calculation based on IFRS and should not be considered an alternative to the consolidated statements of cash flows. Funds from operations is a measure that can be used to gauge Divestco's capacity to generate discretionary cash flow. Investors should be cautioned that funds from operations as reported by Divestco may not be comparable in all instances to funds from operations as reported by other companies. While the closest IFRS measure is cash from operating activities, funds from operations is considered relevant because it provides an indication of how much cash generated by operations is available before proceeds from divested assets and changes in certain working capital items.

The following reconciles funds from operations with cash from operating activities:

Three months ended Year ended December 31 December 31----------------------------------------------------------------------------(Thousands) 2012 2011 2012 2011----------------------------------------------------------------------------Cash from (used in ) Operating Activities $ (155) $ 3 $ 14,892 $ 5,093Changes in Non-Cash Working Capital Balances Related to Operating Activities (85) 2,703 (3,408) 411Interest Paid 219 202 374 593Income Taxes Paid (Refunded) 31 - (184) (352)----------------------------------------------------------------------------Funds from Operations $ 10 $ 2,908 $ 11,674 $ 5,745----------------------------------------------------------------------------Financial HighlightsFinancial Results (Thousands, Except Per Share Amounts)----------------------------------------------------------------------------



Three months ended December 31---------------------------------------------------------------------------- 2012 2011 $ Change % Change----------------------------------------------------------------------------Revenue $ 7,270 $ 11,447 $ (4,177) -36%Operating Expenses 6,960 8,248 (1,288) -16%Other Loss (Income) (1) (133) 132 N/A----------------------------------------------------------------------------EBITDA 311 3,332 (3,021) -91%Finance Costs 251 252 (1) 0%Depreciation and Amortization 1,292 3,823 (2,531) -66%----------------------------------------------------------------------------Income (Loss) before Income Taxes (1,232) (743) (489) N/AIncome Tax Expense - 25 (25) -100%----------------------------------------------------------------------------Net Income (Loss) $ (1,232) $ (768) $ (464) N/A Per Share - Basic and Diluted (0.02) (0.01) (0.01) N/A----------------------------------------------------------------------------Funds from Operations $ 10 $ 2,908 $ (2,898) -100% Per Share - Basic and Diluted - 0.05 (0.05) -100%----------------------------------------------------------------------------Shares Outstanding 66,758 66,610 N/A N/AWeighted Average Shares Outstanding Basic 66,738 60,575 N/A N/A Diluted 66,738 60,575 N/A N/A---------------------------------------------------------------------------- Year ended December 31---------------------------------------------------------------------------- 2012 2011 $ Change % Change----------------------------------------------------------------------------Revenue $ 39,628 $ 40,464 $ (836) -2%Operating Expenses 27,189 34,485 (7,296) -21%Other Loss (Income) 40 (160) 200 N/A----------------------------------------------------------------------------EBITDA 12,399 6,139 6,260 102%Finance Costs 531 759 (228) -30%Depreciation and Amortization 10,646 9,904 742 7%----------------------------------------------------------------------------Income (Loss) before Income Taxes 1,222 (4,524) 5,746 N/AIncome Tax Expense (51) 86 (137) N/A----------------------------------------------------------------------------Net Income (Loss) $ 1,273 $ (4,610) $ 5,883 N/A Per Share - Basic and Diluted 0.02 (0.08) 0.10 N/A----------------------------------------------------------------------------Funds from Operations $ 11,674 $ 5,745 $ 5,929 103% Per Share - Basic and Diluted 0.17 0.10 0.07 70%----------------------------------------------------------------------------Shares Outstanding 66,758 66,610 N/A N/AWeighted Average Shares Outstanding Basic 66,679 59,797 N/A N/A Diluted 66,679 59,797 N/A N/A----------------------------------------------------------------------------Financial Position (Thousands)---------------------------------------------------------------------------- Balance at Balance at Balance at Dec 31 Dec 31 Dec 31---------------------------------------------------------------------------- 2012 2011 2010----------------------------------------------------------------------------Total Assets $ 41,945 $ 43,761 $ 34,984Working Capital (Deficit) (1) (7,483) 297 3,599Long-Term Financial Liabilities (2) 7,622 8,610 3,907----------------------------------------------------------------------------(1) Excludes the current portion of deferred revenue of $2.4 million (December 31, 2011: $4.6 million; December 31, 2010: $3.9 million)(2) Includes long-term debt obligations, deferred rent obligations, sublease loss provision and other long-term liabilities. The long-term debt obligations are comprised of the Company's subordinated debt, shareholder loans and finance leasesSegment Review SummaryThree months ended December 31, 2012 (Thousands) Software and Seismic Corporate & Data Services Data Other Total----------------------------------------------------------------------------Revenue $ 4,319 $ 2,121 $ 830 $ - $ 7,270EBITDA 2,523 (761) (165) (1,286) 311Finance costs (income) - - - 251 251Depreciation and Amortization 788 221 156 127 1,292Income (loss) before income taxes 1,735 (982) (321) (1,664) (1,232)----------------------------------------------------------------------------Three months ended December 31, 2011 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 2,566 $ 4,195 $ 4,686 $ - $ 11,447EBITDA 1,142 1,186 3,966 (2,962) 3,332Finance costs (income) - (1) (1) 254 252Depreciation and Amortization 706 294 2,631 192 3,823Income (loss) before income taxes 436 893 1,336 (3,408) (743)----------------------------------------------------------------------------Year ended December 31, 2012 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 12,742 $ 13,568 $ 13,318 $ - $ 39,628EBITDA 6,047 1,129 9,637 (4,414) 12,399Finance costs (income) - (1) (9) 541 531Depreciation and Amortization 3,150 893 6,034 569 10,646Income (loss) before income taxes 2,897 237 3,612 (5,524) 1,222----------------------------------------------------------------------------Year ended December 31, 2011 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 9,414 $ 17,266 $ 13,784 $ - $ 40,464EBITDA 3,541 3,620 10,651 (11,673) 6,139Finance costs (income) - (3) (6) 768 759Depreciation and Amortization 3,453 1,098 3,632 1,721 9,904Income (loss) before income taxes 88 2,525 7,025 (14,162) (4,524)----------------------------------------------------------------------------Divestco Inc.Condensed Consolidated Interim Statements of Financial Position At December 31----------------------------------------------------------------------------(Thousands - Unaudited) 2012 2011----------------------------------------------------------------------------AssetsCurrent Assets Cash $ 1,320 $ 1,547 Funds held in trust 18 40 Accounts receivable 7,134 11,810 Prepaid expenses, supplies and deposits 357 235 Income taxes receivable 196 110 Asset held for sale - 2,500---------------------------------------------------------------------------- Total current assets 9,025 16,242Investment in affiliated company 137 141Participation surveys in progress 3,508 5,108Property and equipment 4,607 4,147Intangible assets 24,668 18,123----------------------------------------------------------------------------Total assets $ 41,945 $ 43,761----------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent Liabilities Bank indebtedness $ 4,450 $ 3,700 Accounts payable and accrued liabilities 9,624 10,669 Deferred revenue 2,420 4,561 Current loss on sublease loss provision 326 320 Current portion of long-term debt obligations 1,986 1,143 Current portion of tenant inducement 122 113---------------------------------------------------------------------------- Total current liabilities 18,928 20,506Deferred rent obligations 189 1,124Long-term debt obligations 4,115 4,591Sublease loss provision 1,006 1,332Tenant Inducements 1,389 1,397Other long-term liabilities - 100----------------------------------------------------------------------------Total liabilities 25,627 29,050----------------------------------------------------------------------------Shareholders' Equity Equity instruments 7,216 76,431 Contributed surplus 7,829 5,663 Retained earnings (deficit) 1,273 (67,383)---------------------------------------------------------------------------- Total shareholders' equity 16,318 14,711----------------------------------------------------------------------------Total liabilities and shareholders' equity $ 41,945 $ 43,761----------------------------------------------------------------------------Divestco Inc.Condensed Consolidated Interim Statements of Income (Loss) and ComprehensiveIncome (Loss) Year ended December 31----------------------------------------------------------------------------(Thousands, Except Per Share Amounts - Unaudited) 2012 2011----------------------------------------------------------------------------Revenue $ 39,628 $ 40,464----------------------------------------------------------------------------Operating expenses Salaries and benefits 17,667 18,748 General and administrative 9,213 15,664 Depreciation and amortization 10,646 9,904 Stock compensation expense 309 73---------------------------------------------------------------------------- Total operating expenses 37,835 44,389----------------------------------------------------------------------------Finance costs 531 759Other loss (income) 40 (160)----------------------------------------------------------------------------Income (loss) before income taxes 1,222 (4,524)----------------------------------------------------------------------------Income taxes Current (51) 86----------------------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the year $ 1,273 $ (4,610)----------------------------------------------------------------------------Net income (loss) per share Basic and Diluted $ 0.02 $ (0.08)Weighted average number of shares Basic and Diluted 66,679 59,797----------------------------------------------------------------------------Divestco Inc.Condensed Consolidated Interim Statements of Changes in Equity Number of(Thousands - Number of Share Warrants Unaudited) Shares Issued Capital Issued Warrants----------------------------------------------------------------------------Balance as at January 1, 2011 58,938 $ 73,445 15,825 $ 1,808Net loss and comprehensive loss for the yearTransactions with owners, recorded in equity contributions by and distributions to owners: Issue of Class A common shares 7,672 1,133 455 52 Share-based payment transactions Share issue costs (7)----------------------------------------------------------------------------Balance as at December 31, 2011 66,610 $ 74,571 16,280 $ 1,860Balance as at January 1, 2012 66,610 $ 74,571 16,280 $ 1,860Reduction of stated capital and deficit (67,383)Net income and comprehensive income for the yearTransactions with owners, recorded in equity contributions by and distributions to owners: Issue of Class A common shares 128 25 Issue on exercise of PSUs 20 3 Reclassification on exercise of PSUs Reclassification on expiry of warrants (16,280) (1,860) Share-based payment transactions----------------------------------------------------------------------------Balance as at December 31, 2012 66,758 $ 7,216 - $ ----------------------------------------------------------------------------- Retained(Thousands - Equity Contributed Earnings Total Unaudited) Instruments Surplus (Deficit) Equity----------------------------------------------------------------------------Balance as at January 1, 2011 $ 75,253 $ 5,590 $ (62,773) $ 18,070Net loss and comprehensive loss for the year (4,610) (4,610)Transactions with owners, recorded in equity contributions by and distributions to owners: Issue of Class A common shares 1,185 1,185 Share-based payment transactions 73 73 Share issue costs (7) (7)----------------------------------------------------------------------------Balance as at December 31, 2011 $ 76,431 $ 5,663 $ (67,383) $ 14,711Balance as at January 1, 2012 $ 76,431 $ 5,663 $ (67,383) $ 14,711Reduction of stated capital and deficit (67,383) 67,383Net income and comprehensive income for the year 1,273 1,273Transactions with owners, recorded in equity contributions by and distributions to owners: Issue of Class A common shares 25 25 Issue on exercise of PSUs 3 3 Reclassification on exercise of PSUs (3) (3) Reclassification on expiry of warrants (1,860) 1,860 Share-based payment transactions 309 309----------------------------------------------------------------------------Balance as at December 31, 2012 $ 7,216 $ 7,829 $ 1,273 $ 16,318----------------------------------------------------------------------------Divestco Inc.Condensed Consolidated Interim Statements of Cash Flows Year ended December 31----------------------------------------------------------------------------(Thousands - Unaudited) 2012 2011----------------------------------------------------------------------------Cash from (used in) operating activitiesNet income (loss) for the year $ 1,273 $ (4,610)Items not affecting cash:Equity investment income (10) (12)Depreciation and amortization 10,646 9,904Sublease loss - (839)Amortization of tenant inducements (117) (109)Deferred rent obligations (936) 557Income taxes (51) 86Unrealized foreign exchange loss 4 (3)Non-cash employment benefits 25 85Share-based payments 309 73Finance costs (income) 531 759----------------------------------------------------------------------------Funds from operations 11,674 5,745Changes in non-cash working capital balances 3,408 (411)Interest received (paid) (374) (593)Income taxes refunded (paid) 184 352----------------------------------------------------------------------------Net cash from operating activities 14,892 5,093----------------------------------------------------------------------------Cash from (used in) financing activitiesBank indebtedness 750 1,650Advances to affiliated company 14 -Issue of common shares (net of related costs) - 1,093Repayment of long-term debt obligations (1,965) (406)Deferred financing costs - (153)Proceeds received from long-term debt obligations (net of committedrevolver repayments) 2,210 5,500----------------------------------------------------------------------------Net cash from (used in) financing activities 1,009 7,684----------------------------------------------------------------------------Cash from (used in) investing activitiesAdditions to intangible assets (14,197) (9,012)Decrease (increase) in participation surveys in progress 1,600 (3,855)Purchase of property and equipment (1,320) (5,907)Additions to tenant inducements 118 3,596Payments towards sublease loss provision (357) (922)Investment in affiliates - (29)Deferred development costs (2,353) (2,475)Changes in non-cash working capital balances 381 2,678----------------------------------------------------------------------------Net cash from (used in) investing activities (16,128) (14,926)----------------------------------------------------------------------------Increase (decrease) in cash (227) (2,149)Cash, beginning of year 1,547 3,696----------------------------------------------------------------------------Cash, end of year $ 1,320 $ 1,547----------------------------------------------------------------------------



About the Company

Divestco is an exploration services company that provides a comprehensive and integrated portfolio of data, software, and services to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of data, software and services offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol "DVT".

This press release contains forward-looking information related to the Company's capital expenditures, projected growth, view and outlook with respect to future oil and gas prices and market conditions, and demand for its products and services. Statements that contain words such as "could', "should", "can", "anticipate", "expect", "believe", "will", "may" an d similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning applicable by Canadian securities legislation. Although management of the Company 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 risks 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. 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 Company contained in this press release are expressly qualified, in their entirety, by this cautionary statement. Except where required by law, the Company does not assume any obligation to update these forward-looking statements or forward-looking information if conditions or opinions should change.

In particular, this press release contains forward-looking statements pertaining to the following: Company's ability to keep debt and liquidity at acceptable levels, improve/maintain its working capital position and maintain profitability in the current economy; availability of external and internal funding for future operations; relative future competitive position of the Company; nature and timing of growth; oil and natural gas production levels; planned capital expenditure programs; supply and demand for oil and natural gas; future demand for products/services; commodity prices; impact of Canadian federal and provincial governmental regulation on the Company; expected levels of operating costs, finance costs and other costs and expenses; future ability to execute acquisitions and dispositions of assets or businesses; expectations regarding the Company's ability to raise capital and to add to seismic data through new seismic shoots and acquisition of existing seismic data; treatment under tax laws; and new accounting pronouncements.

These forward-looking statements are based upon assumptions including: future prices for crude oil and natural gas; future interest rates and future availability of debt and equity financing will be at levels and costs that allow the Company to manage, operate and finance its business and develop its software products and various oil and gas datasets including its seismic data library, and meet its future obligations; the regulatory framework in respect of royalties, taxes and environmental matters applicable to the Company and its customers will not become so onerous on both the Company and its customers as to preclude the Company and its customers from viably managing, operating and financing its business and the development of its software and data; and that the Company will continue to be able to identify, attract and employ qualified staff and obtain the outside expertise as well as specialized and other equipment it requires to manage, operate and finance its business and develop its properties.

These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including: general economic, market and business conditions; volatility in market prices for crude oil and natural gas; ability of Divestco's clients to explore for, develop and produce oil and gas; availability of financing and capital; fluctuations in interest rates; demand for the Company's product and services; weather and climate conditions; competitive actions by other companies; availability of skilled labour; failure to obtain regulatory approvals in a timely manner; adverse conditions in the debt and equity markets; and government actions including changes in environment and other regulation.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.



Contacts:
Divestco Inc.
Mr. Stephen Popadynetz
CEO, President and CFO
587-952-8152

Divestco Inc.
Mr. Danny Chiarastella
Vice President, Finance
587-952-8027
www.divestco.com





Source: Marketwire