Enterprise Provides Corporate Update
Industry activity has improved considerably. The Company is experiencing bid flow at levels not seen since 2007. As communicated in the Company's news release dated March 4, 2010 the Company was successful in negotiating a multi-year agreement to provide construction and maintenance services to one of Canada's premier electricity providers. The value will be approximately $25 million over the duration of the agreement. The Company was recently successful in being awarded approximately $1.4 million in new infrastructure construction projects. Enterprise's oilfield division has completed or been recently awarded over $3 million in new pipeline and facility construction.
Sustained funding for infrastructure from all levels of government is resulting in numerous opportunities for the Company in its core construction competencies. Relating to the oilfield sector, sustained higher commodity prices specifically for oil has stimulated Canada's producers to increase spending on high grade producing assets. Project and bid flow has increased significantly in the recent period and the outlook for this division appears to be much better for the remainder of 2010 and increasing further in 2011. Increased activity, coupled with the fact that the competitive landscape has been dramatically reduced over the last two years would indicate that as contractor utilization rates increase, margins may soon follow.
As described in the Company's recently filed Management Discussion & Analysis for the period ending December 31, 2009 the Company experienced the most challenging year in recent memory for the energy services sector. Having said that, Enterprise was able to exit the year in a much stronger position with a greatly improved balance sheet; highlighted by a $4.3 million reduction of long term debt. Management will continue with its aggressive pay down of the Company's long term debt and intends to become virtually free of any long term bank debt by the end of this fiscal year.
In 2009, as the Company was experiencing lower activity levels, management was successful in reducing its surplus overheads. Sales were down approximately 30% from the previous year and management was able reduce its G&A by approximately the same ratio. Management believes that corporate operations are in the right proportion to return to profitability in 2010.
About the Company: Enterprise Oilfield Group, Inc. is a construction services company operating in the energy, utility and transportation infrastructure industry. The Company's focus is primarily underground construction and maintenance and above ground plants and facilities. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources to support continued growth.
Enterprise Announces 2009 Year End Results
Enterprise Oilfield Group, Inc. ("Enterprise" or the "Company") realized consolidated revenue of $27.7 million for the year ended December 31, 2009, compared to $39.8 million for the year ended December 31, 2008, a decrease of $12.1 million. For the three months ended December 31, 2009, the consolidated revenue of Enterprise amounted to $7.2 million, compared to $11.7 million for the same period last year. The decrease in annual revenue is attributed to fewer projects in the energy industry resulting from tight capital markets, decreased capital expenditures and lower natural gas prices. The Company had negative EBITDAS of $1.5 million and a net loss of $4.5 million for the year ended December 31, 2009, compared to EBITDAS of $5.2 million and a net loss of $12.3 million for the year ended December 31, 2008. The net loss in 2008 was largely due to a write down in goodwill. Negative EBITDAS for the three months ended December 31, 2009 was $1.1 million with a net loss of $2.2 million compared to EBITDAS of $1.0 million and a net loss of $13.6 million for the three months ended December 31, 2008. The negative EBITDAS is attributable to lower revenue and margins on energy sector projects and two charges totaling $0.6 million. Lower margins in the energy sector were offset by higher margins in the utilities and infrastructure sector.
The Company continues to monitor its overheads and reduce costs where necessary while maintaining the effectiveness of the operations. In 2009, the Company implemented cost controls, personnel reductions and wage rollbacks. Management also sold older, underutilized equipment. For the year ended December 31, 2009, proceeds from the sale of equipment totaled $1.9 million. These proceeds were used to continue the Company's aggressive repayment of long term debt and contribute towards operating capital. For the year ended December 31, 2009, the Company repaid $4.3 million of long term debt, with $0.9 million repaid in the fourth quarter alone.
Enterprise Retains Contact Financial for Investor Communications
"We chose Enterprise as our latest "Fast Focus" client because the company in our opinion represents a perfect barometer for the recovery in the Alberta oil patch. Increasing demand for the Company's pipeline construction services from stronger oil and gas prices and the resurgence of the oil and gas industry in Alberta," says Keir Reynolds, vice president of Contact Financial.
Contact Financial is a Vancouver-based strategic marketing and communication firm that will increase Enterprise's exposure to industry stakeholders and investors. Contact Financial will be responsible for providing advice to the Company with respect to corporate development, producing and distributing effective marketing communication tools, and increasing investor awareness. For more information please visit www.contactfinancial.com.
Enterprise Oilfield Group, Inc. is a construction services company operating in the energy, utility and transportation infrastructure industry. The Company's focus is primarily underground construction and maintenance and above ground plants and facilities. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources to support continued growth.
Under the renewable agreement, Contact Financial will receive a fee of $18,000 for an initial term of three months and $5,000 per month, on a month-to-month basis, thereafter. Contact Financial will further receive 300,000 incentive stock options exercisable for two years from date of signing to purchase common shares of the Company that will vest over a period of 12 months. Contact Financial is at arm's length to Enterprise Oilfield Group, Inc.
Enterprise Awarded Contracts
Enterprise Oilfield Group, Inc. is an construction services company operating in the energy, utility and transportation infrastructure industry. The Company's focus is primarily underground construction and maintenance and above ground plants and facilities. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources to support continued growth.
Enterprise Adopts Shareholder Rights Plan
The Rights Plan is designed both to encourage the fair and equal treatment of Enterprise's shareholders in connection with any potential take-over bid and to ensure that Enterprise's shareholders and its Board of Directors, in compliance with corporate and securities laws, have sufficient time to consider whether there are other options that would more effectively maximize shareholder value. The Rights Plan is not intended to deter take-over proposals. The terms of the Rights Plan are similar to those in rights plans recently approved by shareholders of other Canadian corporations. Enterprise is not aware of any specific take-over bid for the Corporation in process or currently being contemplated.
The rights issued under the Rights Plan become exercisable when a person, together with any parties related to it, acquires or announces its intention to acquire, 20% or more of the Corporation's outstanding common shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of Enterprise's Board of Directors. Should such an acquisition occur each right would entitle a holder, other than the acquiring person or persons related to it, to purchase common shares of Enterprise at a significant discount to the then current market price. A "Permitted Bid" is a bid made to all Enterprise shareholders that is open for at least 60 days. If at the end of the 60 day period more than 50% of Enterprise's then outstanding common shares, other than those common shares owned by the party making the bid and certain related persons, have been tendered to the bid, such party may take up and pay for the common shares but must extend the bid for a further 10 business days to allow other shareholders to tender.
The rights issued under the Rights Plan will initially attach to and trade with Enterprise's common shares and no separate certificates will be issued unless an event triggering these rights occurs. A copy of the Rights Plan will be filed on SEDAR at www.sedar.com.