TORONTO, ONTARIO--(Marketwire - Aug. 29, 2012) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX VENTURE:EEN) announces that it has filed its Interim Condensed Consolidated Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the three and six month period ended June 30, 2012. Copies of these documents can be found on the SEDAR website at www.sedar.com. In this press release all dollar amounts are in US$ '000 unless otherwise specified.
Financial Highlights for the Quarter Ended June 30, 2012
During the quarter the Company recorded its highest quarterly revenues ever of $16,868 ($14,210 in 2011), this notwithstanding that the Company's rig utilization rate was 49% (82% in 2011), which is much lower than historical averages. The rig utilization rate continues to be impacted by the Company's operations in Colombia which are recovering from a region wide strike in Barranca Bermeja in January 2012.
The revenues for were offset by general and administrative expenses of $2,761 ($2,857 in 2011), depreciation of $2,859 ($3,748 in 2011), interest expense of $2,338 ($1,979 in 2011) and oilfield expenses of $13,903 ($9,659 in 2011). For the quarter ended June 30, 2012, the Company also recorded other income of $1,186 ($424 during 2011). The net loss was $3,802 ($9,424 in 2011). The Company recorded a positive EBITDA of $204 ($1,693 in 2011), for the first time since Q2 2011.
Subsequent to the quarter end, the Company completed a private placement ("Private Placement") with Ringo Holding L.P., a subsidiary of Southern Cross Latin America Private Equity Fund IV, L.P. (the "Purchaser"), for gross proceeds of $25,000 to the Company. Following completion of the transaction the Purchaser held 55.7% of the Company. Please see the Company's press release dated August 10, 2012, a copy of which is available on SEDAR, for more information concerning this transaction.
The Company is committed to reducing its overall indebtedness. Since November 2011 the Company has prepaid $4,300 of its senior debt facility with Credit Suisse (the "Credit Facility"), with a further $1,875 paid as part of normal amortization in February 2012. On August 13, 2012, the Company used a portion of the proceeds of the Private Placement to repay $10,000 outstanding indebtedness on the Credit Facility.
In connection with the $10,000 repayment the Company entered into an amended credit agreement with Credit Suisse which (i) modified the existing credit agreement to reduce administrative fees; (ii) modified the amortization schedule such that Estrella will repay the remaining indebtedness in seven quarterly instalments of $2,000 beginning on May 31, 2014; and (iii) freed up certain collateral currently pledged under the credit agreement in an effort to reduce administrative costs. In addition, the 3,072,000 Common Share purchase warrants which were issued to the Credit Suisse in connection with the Credit Facility were returned to the Company for cancellation.
The Company also used a portion of the proceeds of the Private Placement to repay CDN$3,941 worth of other existing indebtedness.
Finalization of Relationship with Petroland
Subsequent to the quarter end, Estrella reached a final settlement with the shareholders of Petroland S.A.S. ("Petroland"). Under that agreement, in exchange for the monies paid to the sellers by Estrella ($1.1 Million) for their shares and the monies invested in Petroland by Estrella to support its operations ($4.1 Million), Estrella was to receive three 550 HP drilling/workover rigs. Estrella also agreed to assume the leasing debt outstanding on two of the transferred rigs ($1.7 million) and purchase certain additional peripheral assets from Petroland at an estimated book value of $1 Million. Subject to customary adjustments, upon completion of these transactions, Estrella would have no further obligations to Petroland or is shareholders.
On August 8, 2012, the transactions specified above were completed and rigs PL01, PL20 and PL21 were formally transferred to Estrella and renumbered 554, 555 and 556 in accordance with Estrella's numbering conventions. Estrella has no further involvement in or relationship with Petroland or its shareholders.
Estrella is an oil and natural gas, geothermal and mining service company with operations throughout Latin and South America. It provides conventional drilling services; directional drilling services; tools and equipment sales and rentals; work-over and finishing services; and consulting and engineering services. The Corporation is headquartered in Buenos Aires, Argentina and has operating locations in six countries Latin and South America.
Forward Looking Statements
This press release may contain forward-looking statements which reflect management's expectations regarding future growth, results of operations, performance and business prospects of Estrella. These forward-looking statements may relate to, among other things, forecasts or expectations regarding business outlook for Estrella; commodity prices for oil and natural gas; oil and natural gas demand and production growth; debt service requirements for Estrella; improvements in operating procedures and technology; capital expenditures by Estrella and the oil and gas industry; the business strategies of Estella's customers; future global economic conditions; and future results of operations; expectations regarding the Corporation's ability to raise capital; realization of the anticipated benefits of acquisitions and dispositions, revenue growth, future acquisitions, generation of cash flow, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These statements are not historical facts or guarantees of future performance, but instead represent management's current expectations, estimates and projections regarding future events.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
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