#OilandGas Service Providers (TSX: $E.TO) (OTCQB: $ETOLF) (TSX: $PHX.TO)
(TSX: $ESI.TO) (TSX: $STEP.TO)- Increased Capital Spending for Sector Drives
Growth; @EnterpriseGrp
Vancouver,
Kelowna, Delta, BC –– April 12, 2023 Investorideas.com, a global investor news source
covering oil and gas stocks issues an energy services sector snapshot featuring
Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF), a consolidator
of services including specialized equipment rental to the energy/resource
sector. The Company also works with particular emphasis on mobile power systems
and technologies that mitigate, reduce or eliminate CO2 and Greenhouse Gas
emissions for itself and its clients.
Read this article,
featuring ETO in full at https://www.investorideas.com/news/2023/energy/04121Oil-Gas-Service-Providers.asp
Mining.com
recently reported, “The Alberta
Energy Regulator projected capital spending on oil and gas to increase to C$17
billion this year, which would be a 56% increase over 2021.”
“This
year’s been a really banner year for gas development,” said Ian Archer,
associate director of commodity insights for S&P Global. “We’ve seen very
strong growth in Western Canadian production.”
According
to Oil and Gas Journal, “More than 60% of
oil and gas company executives surveyed by the Federal Reserve Bank of Dallas
say they plan to increase their capital spending in 2023 versus last year while
an even greater number expect input costs to rise further this year.”
Higher
Capital Spending in the oil industry plus the ongoing Government push for
Climate Change initiatives and solutions have created a perfect storm of
success for Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF). Enterprise provides specialized equipment and
services in the build out of infrastructure for energy, pipeline, and
construction industries. The Company recently announced its Q4 2022 and
FY2022 results and beat expectations
From the news: “The 2022 year has
been one of the strongest in recent history. Higher capital spending in the
energy industry combined with increased customer activity levels in has
resulted in improved results. During the year, Enterprise secured additional
supply and services agreements with three of its tier one clients which
contributed to the improved operating results. Revenue for the year ended
December 31, 2022, was $26,892,249 compared to $18,732,335 in the prior period,
an increase of $8,159,914 or 44%. Adjusted gross margin for the year ended
December 31, 2022, was $10,879,928 compared to $4,982,731 in the prior period,
an increase of $5,897,197 or 118%. Adjusted EBITDA for the year ended December
31, 2022, was $8,147,223 compared to $2,959,020 in the prior period, an
increase of $5,188,203 or 175%. Revenue for the three months ended December 31,
2022, was $8,734,471 compared to $5,730,978 in the prior period, an increase of
$3,003,493 or 52%. Adjusted gross margin for the three months ended December
31, 2022, was $4,157,875 compared to $2,091,874 in the prior period, an
increase of $2,066,001 or 99%. Adjusted EBITDA for the three months ended
December 31, 2022, was $3,283,612 compared to adjusted EBITDA of $1,547,549 in
the prior period, an increase of $1,736,063 or 112%. Increases in gross margin
and EBITDA for the year and the quarter are reflective of increases customer
activity in 2022 while maintaining the overall cost structure of the Company.”
Continued: For the year ended
December 31, 2022, the company generated cash flow from operations of
$5,910,830 compared to $3,500,869 in the prior year. This change is consistent
with the higher activity during the year. The Company continues to utilize a
combination of cash flow and debt to right-size and modernize its equipment
fleet to meet customer demands. During the year ended December 31, 2022, the
Company purchased $5,569,011 of capital assets primarily for natural gas power
generation, upgrading the energy efficiency of existing equipment and meeting
specific requests from customers. During this same period, the Company also
sold property, plant and equipment and received proceeds $1,216,724 of which
were re-invested in new equipment.
Continued: In April of this
year, Enterprise Group officially launched a new wholly owned subsidiary,
Evolution Power Projects, Inc. ("EPP"). EPP is the leading provider
of low emission, mobile power systems and associated surface infrastructure to
the Energy, Resource, and Industrial sectors. The Company's innovative methods
are delivering to its client's low emission natural gas-powered systems and
micro-grid technology, allowing clients to eliminate diesel entirely. A
significant portion of Enterprise's capital expenditures for 2022 was for
additional natural gas-powered systems, including turbine generators. EPP can
now provide mobile micro-grid technology in the 1-megawatt range which has
allowed EPP to expand its services into water pumping and drilling support,
further eliminating the use of diesel power. Also, EPP's systems are equipped
to deliver real-time emission metrics providing its clients the assurances
necessary for them to accomplish their ESG reporting and objectives.
Last
month another TSX energy service provider, PHX Energy (TSX: PHX) announced the strongest
fourth quarter and year end results In Its history. PHX Energy is a growth
oriented, public oil and natural gas services company. The Corporation, through
its directional drilling subsidiary entities provides horizontal and
directional drilling services to oil and natural gas exploration and
development companies principally in Canada and the US.
From the news: Fourth Quarter
Highlights
For
the three-month period ended December 31, 2022, PHX Energy generated consolidated
revenue of $157.8 million, the highest level of quarterly revenue in the
Corporation’s history and an increase of 54 percent from the fourth quarter of
2021.
Adjusted
EBITDA from continuing operations increased to $33.9 million, 21 percent of
consolidated revenue. This is also PHX Energy’s highest level of quarterly
adjusted EBITDA and all-time record as a percentage of consolidated revenue.
Included in the 2022 quarter’s adjusted EBITDA is $6.9 million in cash-settled
share-based compensation expense. Excluding cash-settled share-based
compensation expense, adjusted EBITDA from continuing operations in the fourth
quarter of 2022 was $40.8 million, 26 percent of consolidated revenue.
Earnings
from continuing operations doubled to $20.3 million in the 2022-quarter from
$9.3 million in the 2021 three-month period.
Ensign
Energy Services Inc., (TSX: ESI) a global leader in
oilfield services, headquartered out of Calgary, Alberta, operating in Canada,
the United States and internationally also reported strong revenue
growth in its earnings report last
month.
From the news: 2022 HIGHLIGHTS
Revenue
for 2022 was $1,577.3 million, a 58 percent increase from 2021 revenue of
$995.6 million.
Revenue
amounts and percentage of total by geographic area:
Canadian
drilling recorded 13,589 operating days in 2022, a 51 percent increase from
8,979 operating days in 2021. Canadian well servicing recorded 47,269 operating
hours in 2022, a 30 percent increase from 36,254 operating hours in 2021.
United
States drilling recorded 17,928 operating days in 2022, a 46 percent increase
from 12,242 operating days in 2021. United States well servicing recorded
124,035 operating hours in 2022, a one percent decrease from the 124,916
operating hours in 2021.
International
drilling recorded 3,973 operating days in 2022, an 11 percent increase from
3,574 operating days recorded in 2021.
STEP
Energy Services Ltd. (TSX: STEP), an energy
services company that provides coiled tubing, fluid and nitrogen pumping and
hydraulic fracturing solutions reported Fourth Quarter and
Year End 2022 Results last month.
From the news: 2022 ANNUAL
HIGHLIGHTS
2022
was an exceptional year for STEP, with the Company achieving record results
across many of its key financial metrics:
Consolidated
revenue for the year ended December 31, 2022 of $989.0 million, increasing 84%
from $536.3 million in the prior year.
Net
income for the year ended December 31, 2022 of $94.8 million, or $1.31 per
diluted share, compared to a net loss of $28.1 million in 2021, or a $0.41 loss
per share. Net income was positively impacted by the reversal of $38.4 million
of impairment loss taken in 2020, following the significant improvement in
business conditions.
For
the year ended December 31, 2022, Adjusted EBITDA was $198.9 million or 20% of
revenue compared to $63.0 million or 12% of revenue in the prior year.
Looking
ahead for the sector, amid recent oil price spikes it looks like the spending
will continue and oil service providers will be a sector to watch for
investors.
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a free investor list of oil and gas stocks at Investorideas.com
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