News Column

Divestco Reports Q2 2013 Results

Aug 29 2013 12:00AM

Marketwire

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CALGARY, ALBERTA -- (Marketwired) -- 08/29/13 -- (TSX VENTURE: DVT) - Divestco Inc. ("Divestco" or the "Company") announces its operating results for the three and six months ended June 30, 2013.

Three Months Ended June 30, 2013

Divestco had a net loss of $2.2 million for the second quarter of 2013 ($0.03 per share - basic and diluted) compared to net income of $0.9 million ($0.01 per share - basic and diluted) for the same period in 2012. The loss in Q2 2013 was primarily due to the Company recognizing a $1 million accounting loss from the disposal of certain data library assets and a $0.7 million impairment of leasehold improvements (net of tenant inducements) associated with the surrender of office space in the quarter. Excluding the non-cash loss and impairment, the net loss for Q1 2013 would have been $0.5 million.

The Company generated revenue of $7.1 million in Q1 2013 compared to $11.5 million in Q2 2012, a decrease of $4.4 million (38%). Revenue in the Software and Data segment increased by $1 million (48%) related to a significant software license sale. Revenue in the Seismic Data segment decreased by $4 million (79%) due to lower industry activities and corresponding revenue in the Services segment also decreased by $1.3 million (32%) with geomatics, processing and land management services all experiencing weaker than normal demand as compared to Q2 2012.

Operating expenses (excluding depreciation and amortization) decreased by $1.3 million (17%) to $5.9 million in Q2 2013 from $7.2 million in Q2 2012. Salaries and wages were down $0.5 million (12%). G&A expenses were down $0.6 million (22%) due to lower occupancy costs as the Company surrendered a floor of office space effective January 1, 2013 and another floor effective June 1, 2013. In addition, stock-based compensation, professional fees, and bad debt expenses were lower than 2012. Depreciation and amortization decreased by $1.6 million (52%) mainly due to lower depreciation on seismic data as the Company completed a seismic program in Q2 2012 but did not acquire any new data in Q2 2013.

Excluding the non-cash accounting loss and impairment of $1.7 million, EBITDA was $1.1 million in Q2 2013, a $3.2 million (74%) decrease from $4.3 million for the same period in 2012. The Company generated funds from operations of $1.2 million ($0.02 per share - basic and diluted) for the second quarter of 2013, compared to $4.3 million ($0.06 per share - basic and diluted) for the same period in 2012, a decrease of $3.1 million (73%) primarily due to a lower volume of services and seismic data activities.

Six Months Ended June 30, 2013

Divestco had a net loss of $0.1 million for the first six months of 2013 ($nil per share - basic and diluted) compared to net income of $3.6 million ($0.05 per share - basic and diluted) for the same period in 2012. Excluding the loss and impairment, the Company would have had net income of $1.5 million ($0.02 per share - basic and diluted) for the six months ended June 30, 2013.

The Company generated revenue of $18.7 million compared to $25.9 million in 2012, a decrease of $7.2 million (26%). Revenue in the Software and Data segment increased by $1.1 million (28%) related to a significant software license sale. Revenue in the Seismic Data segment decreased by $4.6 million (39%) which was primarily due to lower speculative survey revenue and seismic data management revenue. Revenue in the Services segment decreased by $3.7 million (38%) with geomatics, processing and land management services all experiencing weaker demand as compared to 2012.

Operating expenses (excluding depreciation and amortization) decreased by $1.6 million (11%) to $12.6 million in for the first six months of 2013 from $14.2 million during the same period in 2012. Salaries and wages were down $1 million (11%) and G&A expenses were down $0.6 million (14%) due to lower occupancy costs as the Company surrendered a floor of office space effective January 1, 2013 and another floor effective June 1, 2013. In addition, stock-based compensation, professional fees, and bad debt expenses were lower than 2012. Depreciation and amortization decreased by $4.1 million (50%) mainly due to lower depreciation on seismic data as the Company acquired more data in 2012 as compared to 2013.

Excluding the non-cash accounting loss and impairment of $1.7 million, EBITDA was $6.1 million in the first six months of 2013, a $5.6 million (48%) decrease from $11.7 million for the same period in 2012. The Company generated funds from operations of $6.4 million ($0.10 per share - basic and diluted) in the first half of 2013, compared to $11.5 million ($0.17 per share - basic and diluted) for the same period in 2012, a decrease of $5.1 million (44%) primarily due to a lower volume of services and seismic data activities.

Liquidity and Working Capital

On May 9, 2013, the Company announced it had closed a new senior credit facility of up to $11 million. The Company also received $1 million in new shareholder loans just prior to the closing of the new facility. The proceeds were used to retire bank and subordinated debt totaling approximately $6 million. The facility has an expanded operating line ($8 million as compared to $5 million under its previous facility) based on receivables aged less than 90 days and $3 million in term debt as well as a financial covenant that is better suited to the Company's business.

Management ensures that Divestco's credit facilities, combined with its working capital and funds from operations, will be sufficient in the short-term and long-term to meet planned growth and to fund future capital expenditures.

Divestco ended Q2 2013 with positive working capital of $0.7 million (December 31, 2012: $7.5 million deficit), excluding deferred revenue of $3.4 million (December 31, 2012 - $2.4 million). The improvement in working capital from the end of 2012 was primarily due to a number of data transactions completed in the first six months of 2013 offset by an unpredictably slow period for the services segment. As a result of closing these data deals, the Company has significantly reduced its payables since the end of 2012. The Company's funded debt to equity ratio was 0.66:1 at June 30, 2013 compared to 0.64:1 at December 31, 2012.

Financial Position (Thousands) Balance as at---------------------------------------------------------------------------- Jun 30 Dec 31 Dec 31---------------------------------------------------------------------------- 2013 2012 2011----------------------------------------------------------------------------Total Assets $ 35,174 $ 41,945 $ 43,761----------------------------------------------------------------------------Working Capital (Deficit) (1) 676 (7,483) 297----------------------------------------------------------------------------Long-Term Financial Liabilities (2 ) 9,512 7,622 8,610----------------------------------------------------------------------------1. Excludes the current portion of deferred revenue of $3.4 million (December 31, 2012: $2.4 million; December 31, 2011: $4.6 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 leases.



Operations Update

In June, 2013, the Company subscribed for 500,000 shares of a newly incorporated entity in exchange for $0.2 million in cash and a portion of its well data library that was transferred to the new entity with a fair value of $0.3 million for a total investment of $0.5 million. Concurrently, two private companies (dealing at arm's length with the Company) subscribed for 1 million shares for $1 million in cash. As a result each company became a 1/3 shareholder of the new entity. Immediately thereafter, the Company granted a software license to the new entity for $1.2 million. The Company recognized $0.8 million of revenue on this transaction after eliminating the Company's share in the new entity. The new entity has granted each shareholder a data licence for $250,000 per annum payable on a monthly basis. As a result of the non-monetary contribution made by the Company, an accounting loss on disposal of $1 million was recognized for the difference between the net book value and fair value of the assets contributed.

During the first six months of 2013, the Company completed a 3D seismic participation survey, covering an area of approximately 93 square kilometers.

Mr. Stephen Popadynetz, CEO commented: "Divestco returned to positive working capital in Q2 2013 through the restructuring of its debt, commitment to cost control and realizing the value of its assets. Despite a weak industry in the first half of 2013, our seismic inventory sales and software sales in the first six months of 2013 remained strong. As well, despite the softness in our Services group as we entered 2013, we are seeing increased activity levels which should result in improved results going forward. Our efforts to expand into international markets are expected to result in increased revenue in 2013. Additionally, our Software group is rapidly developing new products which are about to hit the marketplace and we believe will lead to significant growth later this year. With all of these positive growth catalysts, we remain optimistic that Divestco will continue to strengthen its balance sheet."

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 Six months ended June 30 June 30----------------------------------------------------------------------------(Thousands) 2013 2012 2013 2012----------------------------------------------------------------------------Net Income (Loss) $ (2,230) $ 940 $ (146) $ 3,585----------------------------------------------------------------------------Finance Costs (Income) 221 331 491 (29)----------------------------------------------------------------------------Depreciation and Amortization 1,450 3,011 4,063 8,176----------------------------------------------------------------------------EBITDA $ (559) $ 4,282 $ 4,408 $ 11,732----------------------------------------------------------------------------



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 Six months ended June 30 June 30----------------------------------------------------------------------------(Thousands) 2013 2012 2013 2012----------------------------------------------------------------------------Cash from Operating Activities $ 137 $ 124 $ 4,125 $ 12,885Changes in Non-Cash Working Capital Balances Related to Operating Activities 849 3,831 1,829 (1,316)Interest Paid (Received) 187 289 430 (118)----------------------------------------------------------------------------Funds from Operations $ 1,173 $ 4,266 $ 6,384 $ 11,473----------------------------------------------------------------------------Financial HighlightsFinancial Results (Thousands, Except Per Share Amounts)---------------------------------------------------------------------------- Three months ended June 30---------------------------------------------------------------------------- 2013 2012 $ Change % Change----------------------------------------------------------------------------Revenue $ 7,083 $ 11,483 $ (4,400) -38%Operating Expenses 5,948 7,201 (1,253) -17%Other Loss 1,694 - 1,694 N/A----------------------------------------------------------------------------EBITDA (559) 4,282 (4,841) N/AFinance Costs (Income) 221 331 (110) -33%Depreciation and Amortization 1,450 3,011 (1,561) -52%----------------------------------------------------------------------------Income (Loss) before Income Taxes (2,230) 940 (3,170) N/AIncome Tax Expense - - - N/A----------------------------------------------------------------------------Net Income (Loss) $ (2,230) $ 940 $ (3,170) N/A Per Share - Basic and Diluted (0.03) 0.01 (0.04) N/A----------------------------------------------------------------------------Funds from Operations $ 1,173 $ 4,266 $ (3,093) -73% Per Share - Basic and Diluted 0.02 0.06 (0.04) -67%----------------------------------------------------------------------------Shares Outstanding 66,903 66,713 N/A N/AWeighted Average Shares Outstanding Basic 66,885 66,641 N/A N/A Diluted 66,885 66,694 N/A N/A----------------------------------------------------------------------------Financial HighlightsFinancial Results (Thousands, Except Per Share Amounts)---------------------------------------------------------------------------- Six months ended June 30---------------------------------------------------------------------------- 2013 2012 $ Change % Change----------------------------------------------------------------------------Revenue $ 18,701 $ 25,949 $ (7,248) -28%Operating Expenses 12,603 14,216 (1,613) -11%Other Loss 1,690 1 1,689 168900%----------------------------------------------------------------------------EBITDA 4,408 11,732 (7,324) -62%Finance Costs (Income) 491 (29) 520 N/ADepreciation and Amortization 4,063 8,176 (4,113) -50%----------------------------------------------------------------------------Income (Loss) before Income Taxes (146) 3,585 (3,731) N/AIncome Tax Expense - - - N/A----------------------------------------------------------------------------Net Income (Loss) $ (146) $ 3,585 $ (3,731) N/A Per Share - Basic and Diluted - 0.05 (0.05) -100%----------------------------------------------------------------------------Funds from Operations $ 6,384 $ 11,473 $ (5,089) -44% Per Share - Basic and Diluted 0.10 0.17 (0.07) -41%----------------------------------------------------------------------------Shares Outstanding 66,903 66,713 N/A N/AWeighted Average Shares Outstanding Basic 66,830 66,627 N/A N/A Diluted 66,830 66,627 N/A N/A----------------------------------------------------------------------------Segment Review Summary----------------------------------------------------------------------------Three months ended June 30, 2013 (Thousands) Software and Seismic Corporate & Data Services Data Other Total----------------------------------------------------------------------------Revenue $ 3,101 $ 2,879 $ 1,103 $ - $ 7,083EBITDA 662 148 387 (1,756) (559)Finance costs (income) 68 35 118 - 221Depreciation and amortization 669 162 470 149 1,450Income (loss) before income taxes (75) (49) (201) (1,905) (2,230)----------------------------------------------------------------------------Loss on Disposal of Intangibles and Impairment of Property and Equipment (1,005) - - (678) (1,683)--------------------------------------------------------------------------------------------------------------------------------------------------------Three months ended June 30, 2012 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 2,090 $ 4,219 $ 5,174 $ - $11,483EBITDA 466 971 4,021 (1,176) 4,282Finance costs (income) 102 72 157 - 331Depreciation and amortization 791 219 1,881 120 3,011Income (loss) before income taxes (427) 680 1,983 (1,296) 940--------------------------------------------------------------------------------------------------------------------------------------------------------Six months ended June 30, 2013 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 5,333 $ 6,062 $ 7,306 $ - $18,701EBITDA 1,279 409 5,788 (3,068) 4,408Finance costs (income) 152 76 263 - 491Depreciation and amortization 1,371 317 2,108 267 4,063Income (loss) before income taxes (244) 16 3,417 (3,335) (146)----------------------------------------------------------------------------Loss on Disposal of Intangibles and Impairment of Property and Equipment (1,005) - - (678) (1,683)--------------------------------------------------------------------------------------------------------------------------------------------------------Six months ended June 30, 2012 (Thousands)---------------------------------------------------------------------------- Corporate & Software Services Data Other Total----------------------------------------------------------------------------Revenue $ 4,220 $ 9,804 $ 11,925 $ - $25,949EBITDA 953 2,919 10,011 (2,151) 11,732Finance costs (income) 180 126 (335) - (29)Depreciation and amortization 1,591 450 5,816 319 8,176Income (loss) before income taxes (818) 2,343 4,530 (2,470) 3,585----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Interim Statements of Financial Position

At Jun 30 At Dec 31----------------------------------------------------------------------------(Thousands - Unaudited) 2013 2012----------------------------------------------------------------------------AssetsCurrent Assets Cash $ 388 $ 1,320 Funds held in trust 33 18 Accounts receivable 6,600 7,134 Prepaid expenses, supplies and deposits 263 357 Income taxes receivable 364 196---------------------------------------------------------------------------- Total current assets 7,648 9,025Investment in affiliated company 230 137Participation surveys in progress - 3,508Property and equipment 3,021 4,607Intangible assets 24,275 24,668----------------------------------------------------------------------------Total assets $ 35,174 $ 41,945----------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent Liabilities Bank indebtedness $ 2,779 $ 4,450 Accounts payable and accrued liabilities 2,386 9,624 Deferred revenue 3,351 2,420 Current loss on sublease loss provision 326 326 Current portion of long-term debt obligations 1,409 1,986 Current portion of tenant inducement 72 122---------------------------------------------------------------------------- Total current liabilities 10,323 18,928Deferred rent obligations 416 189Long-term debt obligations 6,518 4,115Sublease loss provision 843 1,006Tenant Inducements 778 1,389----------------------------------------------------------------------------Total liabilities 18,878 25,627----------------------------------------------------------------------------Shareholders' Equity Equity instruments 7,241 7,216 Contributed surplus 7,928 7,829 Retained earnings (deficit) 1,127 1,273---------------------------------------------------------------------------- Total shareholders' equity 16,296 16,318----------------------------------------------------------------------------Total liabilities and shareholders' equity $ 35,174 $ 41,945----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Interim Statements of Income and Comprehensive Income

Three months ended Six months ended June 30 June 30----------------------------------------------------------------------------(Thousands, Except Per Share Amounts - Unaudited) 2013 2012 2013 2012----------------------------------------------------------------------------Revenue $ 7,083 $ 11,483 $ 18,701 $ 25,949----------------------------------------------------------------------------Operating expenses Salaries and benefits 3,907 4,452 8,238 9,260 General and administrative 1,991 2,544 4,266 4,710 Depreciation and amortization 1,450 3,011 4,063 8,176 Other loss 1,694 - 1,690 1 Stock compensation expense 50 205 99 246---------------------------------------------------------------------------- Total operating expenses 9,092 10,212 18,356 22,393----------------------------------------------------------------------------Finance costs 221 331 491 (29)---------------------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the period (2,230) 940 $ (146) $ 3,585----------------------------------------------------------------------------Net income (loss) per share Basic and Diluted $ (0.03) $ 0.01 $ - $ 0.05Weighted average number of shares Basic and Diluted 66,885 66,694 66,830 66,627



Divestco Inc.

Condensed Consolidated Interim Statements of Changes in Equity

Number of Number of(Thousands - Shares Share Warrants Unaudited) Issued Capital Issued------------------------------------------------------------Balance as at January 1, 2012 66,610 $ 74,571 16,280 $------------------------------------------------------------Reduction of stated capital and deficit $ (67,383)------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the period------------------------------------------------------------Transactions with owners, recorded in equity contributions by and distributions to owners:------------------------------------------------------------ Issuance of Class A common shares as service awards 83 17------------------------------------------------------------ Issuance of Class A common shares on exercise of PSUs 20 3------------------------------------------------------------ Reclassification on exercise of PSUs------------------------------------------------------------ Share-based payments------------------------------------------------------------Balance as at June 30, 2012 66,713 $ 7,208 16,280 $------------------------------------------------------------Balance as at January 1, 2013 66,758 $ 7,216 - $------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the period------------------------------------------------------------Transactions with owners, recorded in equity contributions by and distributions to owners:------------------------------------------------------------ Issuance of Class A common shares as service awards 145 25------------------------------------------------------------ Share-based payments------------------------------------------------------------Balance as at June 30, 2013 66,903 $ 7,241 - $------------------------------------------------------------ Retained(Thousands - Equity Contributed Earnings Total Unaudited) Warrants Instruments Surplus (Deficit) Equity----------------------------------------------------------------------------Balance as at January 1, 2012 1,860 $ 76,431 $ 5,663 $ (67,383) $ 14,711----------------------------------------------------------------------------Reduction of stated capital and deficit $ (67,383) $ 67,383 $ -----------------------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the period 3,585 3,585----------------------------------------------------------------------------Transactions with owners, recorded in equity contributions by and distributions to owners:---------------------------------------------------------------------------- Issuance of Class A common shares as service awards 17 17---------------------------------------------------------------------------- Issuance of Class A common shares on exercise of PSUs 3 3---------------------------------------------------------------------------- Reclassification on exercise of PSUs (3) (3)---------------------------------------------------------------------------- Share-based payments 246 246----------------------------------------------------------------------------Balance as at June 30, 2012 1,860 $ 9,068 $ 5,906 $ 3,585 $ 18,559----------------------------------------------------------------------------Balance as at January 1, 2013 - $ 7,216 $ 7,829 $ 1,273 $ 16,318----------------------------------------------------------------------------Net income (loss) and comprehensive income (loss) for the period (146) (146)----------------------------------------------------------------------------Transactions with owners, recorded in equity contributions by and distributions to owners:---------------------------------------------------------------------------- Issuance of Class A common shares as service awards 25 25---------------------------------------------------------------------------- Share-based payments 99 99----------------------------------------------------------------------------Balance as at June 30, 2013 - $ 7,241 $ 7,928 $ 1,127 $ 16,296----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Interim Statements of Cash Flows

Six months ended June 30----------------------------------------------------------------------------(Thousands - Unaudited) 2013 2012----------------------------------------------------------------------------Cash from (used in) operating activitiesNet income (loss) for the period $ (146) $ 3,585Items not affecting cash:Equity investment income 7 5Depreciation and amortization 4,063 8,176Amortization of tenant inducements (65) (57)Deferred rent obligations 227 (471)Loss on disposal of intangibles 1,005 -Impairment of property and equipment 678 -Unrealized foreign exchange loss - 1Non-cash employment benefits 25 17Share-based payments 99 246Finance costs (income) 491 (29)----------------------------------------------------------------------------Funds from operations 6,384 11,473Changes in non-cash working capital balances (1,829) 1,316Interest received (paid) (430) 118Income taxes paid - (22)----------------------------------------------------------------------------Net cash from operating activities 4,125 12,885----------------------------------------------------------------------------Cash from (used in) financing activitiesBank indebtedness (1,671) 500Repayment of long-term debt obligations (2,061) (646)Deferred financing costs (298) -Proceeds received from long-term debt obligations (net of committedrevolver repayments) 4,025 1,000----------------------------------------------------------------------------Net cash from (used in) financing activities (5) 854----------------------------------------------------------------------------Cash from (used in) investing activitiesAdditions to intangible assets (3,575) (14,401)Decrease in participation surveys in progress 3,508 5,100Purchase of property and equipment (118) (538)Lease incentive 144 -Payments towards sublease loss provision (178) (179)Investment in affiliates (200) -Advances from equity-accounted investees 400 14Deferred development costs (1,168) (1,190)Changes in non-cash working capital balances (3,865) (1,186)----------------------------------------------------------------------------Net cash from (used in) investing activities (5,052) (12,380)----------------------------------------------------------------------------Increase (decrease) in cash (932) 1,359Cash, beginning of period 1,320 1,547----------------------------------------------------------------------------Cash, end of period $ 388 $ 2,906----------------------------------------------------------------------------



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".

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.

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" and 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.



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


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