Essential Energy Services : 2023 Second Quarter Financial Statements

As at

As at

June 30,

December 31,

(in thousands of dollars)

2023

2022

Assets

Current

Cash

$

2,153

$

2,063

Trade and other accounts receivable (note 3)

22,161

27,085

Inventory (note 4)

37,688

34,617

Prepayments and deposits

3,650

2,264

65,652

66,029

Non‐current

Property and equipment (note 5)

74,008

76,180

Right‐of‐use lease assets (note 8)

6,900

8,317

80,908

84,497

Total assets

$

146,560

$

150,526

Liabilities

Current

Trade and other accounts payable (note 6)

$

13,735

$

14,307

Share‐based compensation (note 11)

2,311

2,721

Income taxes payable

30

30

Current portion of lease liabilities (note 8)

3,139

4,237

19,215

21,295

Non‐current

Share‐based compensation (note 11)

4,771

5,357

Long‐term debt (note 7)

6,250

950

Long‐term lease liabilities (note 8)

4,448

5,542

15,469

11,849

Total liabilities

34,684

33,144

Equity

Share capital (note 9)

241,721

256,409

Deficit

(161,152)

(158,362)

Other reserves (note 10)

31,307

19,335

Total equity

111,876

117,382

Total liabilities and equity

$

146,560

$

150,526

For the three months ended

For the six months ended

June 30,

June 30,

(in thousands of dollars, except per share amounts)

2023

2022

2023

2022

Revenue (note 15)

$

28,573

$

28,642

$

74,435

$

66,383

Operating expenses

25,365

24,422

62,369

56,142

Gross margin

3,208

4,220

12,066

10,241

General and administrative expenses

2,578

2,300

5,613

4,706

Depreciation and amortization (notes 5 and 8)

4,134

4,163

8,197

8,349

Share‐based compensation expense (recovery) (note 11)

1,685

(11)

1,448

3,028

Other income

(610)

(869)

(875)

(776)

Operating loss

(4,579)

(1,363)

(2,317)

(5,066)

Finance costs

246

213

473

431

Net loss

(4,825)

(1,576)

(2,790)

(5,497)

Unrealized foreign exchange gain (loss) (note 10)

54

(130)

58

(66)

Comprehensive loss

$

(4,771)

$

(1,706)

$

(2,732)

$

(5,563)

Net loss per share (note 12)

Basic and diluted

$

(0.04)

$

(0.01)

$

(0.02)

$

(0.04)

Comprehensive loss per share (note 12)

Basic and diluted

$

(0.04)

$

(0.01)

$

(0.02)

$

(0.04)

For the six months ended

June 30,

(in thousands of dollars)

2023

2022

Equity:

Share Capital

Balance, January 1

$

256,409

$

272,732

Shares repurchased and cancelled under normal course issuer bid (note 9)

(14,688)

(4,394)

Balance, June 30

$

241,721

$

268,338

Deficit

Balance, January 1

$

(158,362)

$

(156,607)

Net loss

(2,790)

(5,497)

Balance, June 30

$

(161,152)

$

(162,104)

Other reserves

Balance, January 1

$

19,335

$

6,701

Other comprehensive gain (loss) (note 10)

58

(66)

Shares repurchased and cancelled under normal course issuer bid (note 10)

11,914

3,413

Balance, June 30

$

31,307

$

10,048

Total equity

$

111,876

$

116,282

See accompanying notes to the unaudited condensed consolidated interim financial statements.

For the six months ended

June 30,

(in thousands of dollars)

2023

2022

Operating Activities:

Net loss

$

(2,790)

$

(5,497)

Non‐cash adjustments to reconcile net loss to operating cash flow:

Depreciation and amortization (notes 5 and 8)

8,197

8,349

Provision (recovery) of trade accounts receivable (note 3)

150

(100)

Finance costs

473

431

Gain on disposal of assets

(1,125)

(601)

Funds flow

4,905

2,582

Changes in non‐cash operating working capital:

Trade and other accounts receivable before provision

4,851

6,170

Inventory

(3,071)

(3,798)

Income taxes payable

‐

(22)

Prepayments and deposits

(1,386)

(1,110)

Trade and other accounts payable

(624)

(799)

Share‐based compensation

(996)

(2,531)

Changes in non‐cash operating working capital

(1,226)

(2,090)

Net cash provided by operating activities

3,679

492

Investing Activities:

Purchase of property and equipment (note 5)

(5,284)

(2,432)

Non‐cash investing working capital in trade and other accounts payable

54

(43)

Proceeds on disposal of equipment

1,981

1,508

Net cash used in investing activities

(3,249)

(967)

Financing Activities:

Increase in long‐term debt (note 7)

5,300

‐

Shares repurchased and cancelled under normal course issuer bid (note 9)

(2,774)

(981)

Finance costs paid

(214)

(99)

Payments of lease liabilities (note 8)

(2,647)

(2,793)

Net cash used in financing activities

(335)

(3,873)

Foreign exchange loss on cash held in a foreign currency

(5)

(7)