Adds New Treatment Development Agreements in Q2 with Major Oil & Gas Companies and Waste Water Disposal Company
CALGARY, Dec. 1, 2011 /PRNewswire/ - Ridgeline Energy Services Inc. (TSX-V: RLE) ("Company"), an energy services technology company focused on the treatment of wastewater in the oil and gas, commercial and industrial wastewater sectors, announces that it has filed its second quarter fiscal 2012 financial results for the three months ending September 30, 2011. The Company also provided an update on the commercial progress of its proprietary water treatment system.
Q2 2012 Highlights:
- Revenue increased 34.5% to $3.2 million from $2.4 million in Q2 2011 as a result of an increase in revenue predominantly from the environmental consulting business.
- Signed two development agreements with major North American oil and gas companies to test and treat flowback water from hydraulic fracturing operations.
- Signed development agreement with California-based waste water disposal company to treat multiple types of wastewater.
- Net loss of $0.28 million, versus a net loss of $0.27 million for the same period last year, which included a non-cash allocation of $0.20 million to non-controlling interests. The non-cash allocation to non-controlling interests will no longer be recorded once acquisition of Danzik Hydrologic Sciences LLC is completed.
Tony Ker, CEO of Ridgeline Energy Services, commented "As concerns over flowback wastewater from hydraulic fracturing ("frac" or "fracing") mount, so do the opportunities for our cost-effective and unique water treatment system. We are gaining traction in the marketplace and are excited about being at the forefront of such an important environmental issue. Our reputation among major oil and gas companies over the years, many of whom are existing clients of our Ridgeline Environment Inc. ("REI") subsidiary, is serving as a valuable competitive advantage and means to accelerate market penetration for our new waste water treatment technologies."
"In Q2 we signed two more development agreements with major oil and gas exploration and production companies. The first is at a hydraulic fracturing well site in the Waskada area of southwestern Manitoba. The client's strategic focus is on enhanced oil recovery through water flood programs. Ridgeline will provide contract services for the testing, treatment and recycling of produced and flow back water for use in the client's hydraulic fracturing and water flood applications. The second agreement is with an existing client, a major North American oil and gas producer, to construct a Single Train Commercial Installation at one of the client's sites in the Leonard Shale, New Mexico."
"Revenue for the second quarter increased 34.5% over the same period last year predominantly from REI, reflecting growth in our consulting business. Based on our success at the Horn River site, we have expanded our water treatment opportunities with our major client, and anticipate water treatment revenues will begin ramping up as our new installations at the client's U.S. sites come online."
"In September we signed a development agreement with Lakeland Processing Company in southern California to test and treat commercial and industrial waste water. The Lakeland project provides an opportunity for the Company to diversify into the treatment of commercial and industrial waste water. Ridgeline's technology was originally developed to extract usable materials out of waste water from grease and oil interceptors associated with restaurants and hotels. We believe this underserved market represents significant potential, and we look forward to expanding our market share as we demonstrate our superior cost and operating efficiencies."
Financial Results
Revenue for the second quarter of fiscal 2012 increased 34.5% to $3.2 million compared to $2.4 million for the same period last year. The increase in revenue was primarily due to growth in the Ridgeline Environment Inc. ("REI") subsidiary. Gross profit for the quarter increased to $1.0 million from $976,000 for the same period last year. Total operating expenses increased to $1.6 million compared to $1.3 million for the same period last year, reflecting higher general and administrative expenses in anticipation of planned growth within Ridgeline Water Inc., as well as higher accounting and auditing expenses related to the company's recent change to IFRS reporting standards. Net loss attributable to Ridgeline shareholders increased to $278,557 from $269,789 for the same period last year due in part to increased operating expenses, off-set by higher gross profit. Net loss includes a non-cash allocation of $204,939 attributable to non-controlling interests, which will no longer be recorded once acquisition of Danzik Hydrological Sciences LLC is completed.
Ridgeline Energy Services Inc. (Amalgamated Companies)
Ridgeline Energy Services is composed of three business subsidiaries: Ridgeline Environment Inc. (REI), Ridgeline Water Inc. (RWI), Ridgeline Greenfill Inc. (RGI)
Ridgeline Water Inc. (RWI), subsidiary
During the past fiscal period the Company continues with its ambitious business development project to advance a technology for treating frac flowback and produced water generated from wells drilled to produce natural gas and oil from shale formations. Through the Eau ClairePartnership, we are developing processes that will be used to treat frac and produced water in the oil and gas exploration and production sector and commercial and industrial waste water. Based on a unique technology, RWI is able to provide scalable solutions for treatment of wastewater. The Company's commercially proven technology is capable of treating large volumes of contaminated water at low cost and low energy input.
Ridgeline's target markets include:
- Frac flow back and produced water from unconventional gas and oil operations
- Polymer flood enhanced heavy oil recovery operations
- Commercial and Industrial Waste water treatment
Subsequent to the second quarter, the Company announced its intention to enter the water storage market with a Zero Impact storage system. This business was developed around a defined need from Ridgeline's clients in the oil and gas industry for water storage solutions. Ridgeline will initially construct the units to work in conjunction with its existing water treatment operations.
Ridgeline Environment Inc. (REI), subsidiary
REI provides environmental consulting, project management and soil remediation services to upstream, midstream, and downstream operators in the energy industry. The energy industry requires such services to comply with environmental standards currently mandated by regulatory bodies such as the Canadian Standards Association (CSA), AlbertaEnvironment (AENV) and the Alberta Energy Resource Conservation Board (ERCB), as well as to address historical contamination concerns caused by previous oilfield exploration, production, transportation, and abandonment operations. Previous oilfield activity has created a significant market for environmental services to clean up old worksites, as relatively few precautions were taken historically by the industry to limit contaminant introduction into the environment. REI supplies the knowledge and capability required to help energy industry operators assess and resolve worksite contamination issues and comply with modern environmental standards.
Ridgeline GreenFill (RGI), subsidiary
RGI is engaged in the provision of treatment for hydrocarbon contaminated soils at GreenFill Treatment Site facilities.
About Ridgeline Energy Services Inc.
Ridgeline Energy Services Inc. is an environmental technology and consulting company focused on waste management in the oil and gas industry. Through its subsidiary Ridgeline Water Inc., the Company is developing proprietary technology capable of efficiently treating large volumes of contaminated water generated by oil and gas producers. The Company is working with energy majors in the application of its proprietary technology for effective treatment of water for hydraulic fracturing, oil sands process water (SAGD and tailings ponds) and to recycle the water used in these oil and gas industry applications. Through its environmental consulting and remediation subsidiaries, Ridgeline Environment Inc. and Ridgeline GreenFill Inc., the Company has built a reputation as an established player in the provision of environmental services to Western Canada's large and growing oil and gas industry. The Company trades on the TSX Venture Exchange under the symbol "RLE". Additional information is available on the Company's website at: www.ridgelinecanada.com.
For a video on hydraulic fracturing and our proprietary water treatment technology please follow this link: Ridgeline Video Presentation.
The preceding commentary should be read in conjunction with the Management's Discussion and Analysis and interim financial statements and related notes attached thereto (the "Financial Statements") for the quarter and six months ended September 30, 2011, which are prepared in accordance with International Financial Reporting Standards. All amounts are stated in Canadian dollars unless otherwise indicated. Statements in this release that are not historical facts but are forward-looking involve known and unknown risks and uncertainties that could cause actual results to vary considerably from these statements.
"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 news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements."
SOURCE Ridgeline Energy Services Inc.
