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Marketwired
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Total Energy Services Inc. Announces Q2 2017 Results

CALGARY, ALBERTA -- (Marketwired) -- 08/10/17 -- Total Energy Services Inc. ("Total Energy" or the "Company") (TSX: TOT) announces its consolidated financial results for the three and six months ended June 30, 2017.

Financial Highlights
($000's except per share data)
----------------------------------------------------------------------------
                  Three Month Ended June 30       Six Months Ended June 30

                                                                         %
                     2017     2016 % Change         2017      2016  Change
----------------------------------------------------------------------------
Revenue         $ 154,922 $ 43,893      253% $   239,274 $  93,849     155%
Operating Loss    (13,105)  (5,289)    (148%)    (13,346)   (7,802)    (71%)
EBITDA (1)          6,577    1,368      381%      14,519     5,671     156%
Cashflow           10,860    1,775      512%      18,681     6,814     174%
Net Loss          (13,141)  (4,203)    (213%)    (13,994)   (6,335)   (121%)

 Attributable to
  shareholders    (11,565)  (4,203)    (175%)    (12,418)   (6,335)    (96%)


Per Share Data
 (Diluted)
EBITDA (1)      $    0.15 $   0.04      275% $      0.39 $    0.18     117%
Cashflow        $    0.25 $   0.06      317% $      0.50 $    0.22     127%
Net Loss
 attributable to
 shareholders   $   (0.26)$  (0.14)     (86%)$     (0.33)$   (0.20)    (65%)
----------------------------------------------------------------------------


                                                 June 30   Dec. 31       %
                                                    2017      2016  Change
----------------------------------------------------------------------------
Financial
 Position
Total Assets                                 $ 1,053,302 $ 522,599     102%
Long-Term Debt
 and Obligations
 Under Finance
 Leases
 (excluding
 current
 portion)                                        256,266    46,557     450%
Working Capital
 (2)                                              21,309    71,770     (70%)
Net Debt (3)                                     234,957         -     n/m
Shareholders'
 Equity                                          547,405   364,302      50%

Shares
 Outstanding
 (000's)(4)
Basic              43,718   30,920       41%      37,617    30,920      22%
Diluted            43,718   30,920       41%      37,617    30,920      22%
----------------------------------------------------------------------------

Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.

Total Energy's financial results for the three and six months ended June 30, 2017 include the financial results for Savanna Energy Services Corp. ("Savanna") from April 5, 2017 when the Company acquired control of Savanna upon the reconstitution of the board of directors of Savanna. Negatively impacting the Company's financial results for the second quarter of 2017 was approximately $4.0 million of non-recurring expenses that relate to completion of the acquisition of Savanna and the subsequent integration and rationalization of Savanna's operations and a $4.5 million unrealized foreign exchange loss included in cost of services that relates primarily to intercompany working capital balances. Excluding these expenses, EBITDA for the second quarter of 2017 was $15.1 million.

Finance costs for the second quarter of 2017 included $2.9 million of non-recurring costs, notably $1.6 million of penalty interest paid on Savanna's debt following the change of control (including the one-percent premium paid on the redemption of $39.6 million of Savanna's 7% senior unsecured notes), $0.5 million of non-recurring fees associated with the establishment of Total Energy's $225 million revolving syndicated credit facilities (the "Credit Facility") and an unrealized loss on other assets of $0.8 million.

Total Energy's Contract Drilling Services segment ("CDS") achieved 20% utilization during the second quarter of 2017, recording 2,021 operating days (spud to rig release) with a fleet of 119 drilling rigs, compared to 52 operating days, or 3% utilization, during the second quarter of 2016 with a fleet of 18 drilling rigs. Revenue per operating day for the second quarter of 2017 was $20,437. The acquisition of Savanna added 101 drilling rigs to the CDS segment. During the second quarter of 2017, the CDS segment had 972 operating days in Canada with a fleet of 86 rigs (13% utilization), 890 days in the United States with a fleet of 28 rigs (37% utilization) and 159 days in Australia with a fleet of 5 rigs (37% utilization).

The Rental and Transportation Services segment ("RTS") achieved a utilization rate on major rental equipment of 18% during the second quarter of 2017 as compared to 10% during the second quarter of 2016. Segment revenue per utilized rental piece increased 12% for the second quarter of 2017 compared to the same period in 2016 due to a modest increase in pricing. This segment exited the second quarter of 2017 with approximately 11,700 pieces of major rental equipment (excluding access matting) and 125 heavy trucks as compared to 10,000 rental pieces and 112 heavy trucks at June 30, 2016. The acquisition of Savanna added approximately 1,700 major rental pieces, four heavy trucks and a significant inventory of small rental equipment to the RTS equipment fleet as well as three full service branch locations in Fort MacKay, Lloydminster and Swift Current.

Revenue in the Compression and Process Services segment ("CPS") increased 76% to $65.4 million for the three months ended June, 2017 compared to $37.1 million for the same period in 2016. This segment exited the second quarter of 2017 with a $149.3 million backlog of fabrication sales orders as compared to $35.9 million at June 30, 2016 and $75.2 million at March 31, 2017. At June 30, 2017, there was 40,000 horsepower in the compression rental fleet, of which approximately 19,000 horsepower was on rent as compared to 12,000 horsepower on rent at June 30, 2016 and 16,500 horsepower at March 31, 2017. The gas compression rental fleet operated at an average utilization rate of 46% during the second quarter of 2017 as compared to 30% during the second quarter of 2016.

Total Energy's Well Servicing segment ("WS") was established with the acquisition of Savanna. This segment generated $34.9 million of revenue during the second quarter of 2017 on 34,850 billable hours, or $918 per billable hour, with a fleet of 87 service rigs located in Canada (57 rigs), the United States (18 rigs) and Australia (12 rigs). Service rig utilization for the three months ended June 30, 2017 was 27% in Canada, 38% in the United States and 64% in Australia.

Total Energy issued 15.32 million common shares from treasury in connection with the acquisition of Savanna resulting in 46.2 million common shares outstanding at June 30, 2017. During the second quarter, Total Energy declared a quarterly dividend of $0.06 per share to shareholders of record on June 30, 2017. This dividend was paid on July 31, 2017. For Canadian income tax purposes, all dividends paid by Total Energy on its common shares are designated as "eligible dividends" unless otherwise indicated.

Outlook

Despite continuing volatility and uncertainty in global energy markets, North American oil and natural gas drilling and completion activity levels continued the recovery which began in the fourth quarter of 2016. While modest gains in pricing have been achieved in North America, pricing remains low by historical comparisons and operating margins remain challenged.

The record fabrication backlog enjoyed by the CPS segment at June 30, 2017 provides good visibility for the remainder of 2017 and into early 2018. With the majority of the current sales backlog constituted by orders from outside of Canada, this division continues to gain traction in the international gas compression market. In June 2017, production commenced in a newly established 100,000 square foot gas compression fabrication facility located in Weirton, West Virginia and subsequent to June 30, 2017 the Weirton facility received its first direct order.

Total Energy remains focused on carefully managing its cost structure and realizing efficiencies through the integration and rationalization of Savanna's operations. A significant proportion of the $5.1 million of Savanna-related non-recurring costs incurred by Total Energy during the first half of 2017 relates to operational and overhead rationalization and the Company currently expects that its target of $10.0 million of go-forward annualized cost savings arising from the combination of Savanna and the Company, excluding interest expense savings, will be achieved by year end.

The Company's capital expenditure budget for 2017 is currently $44.8 million, which includes a $22.0 million budget approved by the previous board of Savanna. To June 30, 2017, $25.2 million of 2017 capital expenditures have been made by the Company and Savanna (excluding $26.8 million related to the acquisition of Savanna). Total Energy is currently reviewing its capital plans for the remainder of 2017 in order to high-grade opportunities and maximize synergies and economies of scale.

With the acquisition of Savanna on April 5, 2017, Total Energy assumed approximately $281.3 million of Savanna debt. During the second quarter, the Company utilized the Credit Facility to refinance $205.9 million of such debt, thereby lowering the effective interest rate on this debt from approximately 7.16% to 3.45% as at June 30, 2017. While the applicable interest rate on the Credit Facility is variable and tied to the Canadian prime rate of interest as well as subject to a pricing grid based on financial ratios, the Company expects to realize substantial interest expense savings going forward. At June 30, 2017, the Company's total debt amounted to $326.3 million and consisted of $192.5 million drawn on the Credit Facility (3.45% interest rate), $62.6 million of mortgage debt (3.57% weighted average interest rate), $67.5 million of senior unsecured notes (7.0% interest rate) and $3.7 million of limited partnership debt (5.45% interest rate).

Total Energy's working capital position at June 30, 2017 was $21.3 million, including $20.1 million of cash and marketable securities. Such working capital position reflects the classification of $67.5 million of 7% notes as a current liability given their maturity in May of 2018. In addition to the $225 million Credit Facility, Savanna has a $5.0 million revolving line of credit that was undrawn at June 30, 2017. Total Energy was in compliance with all debt covenants at June 30, 2017 and able to fully draw on the remaining amounts available under its credit facilities. The Credit Facility also provides the Company with the option to increase such facility by $75 million subject to certain terms and conditions including the agreement of the lenders to increase their commitments.

Conference Call

At 9:00 a.m. (Mountain Time) on August 11, 2017 Total Energy will conduct a conference call and webcast to discuss its second quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total's website at www.totalenergy.ca by selecting "Webcasts". Persons wishing to participate in the conference call may do so by calling (800) 806-5484 or (416) 340-2217 (passcode 7958945#). Those who are unable to listen to the call live may listen to a recording of it on Total Energy's website. A recording of the conference call will also be available until September 11, 2017 by dialing (800) 408-3053 (passcode 5805165#).

Selected Financial Information

Selected financial information relating to the three and six months ended June 30, 2017 and 2016 is attached to this news release. This information should be read in conjunction with the interim condensed consolidated financial statements of Total Energy and the attached notes to the interim condensed consolidated financial statements and management's discussion and analysis to be issued in due course and reproduced in the Company's 2017 second quarter report.

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
----------------------------------------------------------------------------
                                                      June 30,  December 31,
                                                          2017          2016
----------------------------------------------------------------------------
                                                   (unaudited)     (audited)
Assets
Current assets:
  Cash and cash equivalents                      $      16,112 $      15,916
  Accounts receivable                                  119,202        47,545
  Inventory                                             54,755        54,964
  Income taxes receivable                                4,486             -
  Other assets                                           4,004         5,095
  Prepaid expenses and deposits                         11,545         4,029
----------------------------------------------------------------------------
                                                       210,104       127,549

Property, plant and equipment                          827,268       383,497
Income taxes receivable                                  7,070         7,070
Deferred tax asset                                       4,807           430
Goodwill                                                 4,053         4,053
----------------------------------------------------------------------------
                                                 $   1,053,302 $     522,599
----------------------------------------------------------------------------

Liabilities & Shareholders' Equity
Current liabilities:
  Accounts payable and accrued liabilities       $      93,515 $      36,755
  Deferred revenue                                      19,004        13,573
  Dividends payable                                      2,774         1,856
  Income taxes payable                                       -           249
  Current portion of obligations under finance
   leases                                                1,637         1,408
  Current portion of long-term debt                     71,865         1,938
----------------------------------------------------------------------------
                                                       188,795        55,779

Long-term debt                                         254,478        44,962

Obligations under finance leases                         1,788         1,595

Onerous lease liability                                  3,193             -

Deferred tax liability                                  57,643        55,961

Shareholders' equity:
  Share capital                                        291,317        88,654
  Contributed surplus                                    3,247         7,683
  Accumulated other comprehensive income                (3,468)            -
  Non-controlling interest                               1,557             -
  Retained earnings                                    254,752       267,965
----------------------------------------------------------------------------
                                                       547,405       364,302

----------------------------------------------------------------------------
                                                 $   1,053,302 $     522,599
----------------------------------------------------------------------------


Consolidated Statements of Comprehensive Loss
(in thousands of Canadian dollars except per share amounts)
(unaudited)

----------------------------------------------------------------------------
                                 Three months ended        Six months ended
                                            June 30                 June 30
                                   2017        2016        2017        2016
----------------------------------------------------------------------------

Revenue                       $ 154,922   $  43,893   $ 239,274   $  93,849
Cost of services                133,528      37,202     202,243      76,856
Selling, general and
 administration                  14,633       5,264      22,253      11,088
Share-based compensation            255         501         484       1,010
Depreciation                     19,611       6,215      27,640      12,697
----------------------------------------------------------------------------
Operating loss                  (13,105)     (5,289)    (13,346)     (7,802)
Gain on sale of property,
 plant and equipment                 71         442         225         776
Finance costs                    (6,646)       (793)     (7,243)     (1,316)
----------------------------------------------------------------------------
Net loss before income taxes    (19,680)     (5,640)    (20,364)     (8,342)
Current income tax expense
 (recovery)                        (229)         81      (4,958)        396
Deferred income tax recovery     (6,310)     (1,518)     (1,412)     (2,403)
----------------------------------------------------------------------------
Total income tax recovery        (6,539)     (1,437)     (6,370)     (2,007)

Net loss for the period       $ (13,141)  $  (4,203)  $ (13,994)  $  (6,335)
----------------------------------------------------------------------------

Net loss attributable to:
  Shareholders of the
   Company                    $ (11,565)  $  (4,203)  $ (12,418)  $  (6,335)
  Non-controlling interest       (1,576)          -      (1,576)          -
----------------------------------------------------------------------------

Loss per share
Basic and diluted             $   (0.26)  $   (0.14)  $   (0.33)  $   (0.20)
----------------------------------------------------------------------------


Condensed Interim Consolidated Statements of Comprehensive Loss
(unaudited)
----------------------------------------------------------------------------
                                 Three months ended        Six months ended
                                            June 30                 June 30
                                   2017        2016        2017        2016
----------------------------------------------------------------------------
Net loss for the period       $ (13,141)  $  (4,203)  $ (13,994)  $  (6,335)

Changes in fair value of
 long-term investment               395           -         665           -
Realized gain on long-term
 investment                        (665)          -        (665)          -
Foreign currency translation
 adjustment                      (4,775)          -      (4,751)          -
Deferred tax effect               1,319           -       1,283           -
                                                                          -
----------------------------------------------------------------------------
Total other comprehensive
 loss for the period             (3,726)          -      (3,468)          -

----------------------------------------------------------------------------
Total comprehensive loss      $ (16,867)  $  (4,203)  $ (17,462)  $  (6,335)
----------------------------------------------------------------------------

Total comprehensive loss
 attributable to:

  Shareholders of the
   Company                    $ (15,291)  $  (4,203)  $ (15,886)  $  (6,335)
  Non-controlling interest       (1,576)          -      (1,576)          -
----------------------------------------------------------------------------


Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
----------------------------------------------------------------------------
                                 Three months ended        Six months ended
                                            June 30                 June 30
                                   2017        2016        2017        2016
----------------------------------------------------------------------------

Cash provided by (used in):

Operations:
  Net loss for the period     $ (13,141)  $  (4,203)  $ (13,994)  $  (6,335)
  Add (deduct) items not
   affecting cash:
    Depreciation                 19,611       6,215      27,640      12,697
    Share-based compensation        255         501         484       1,010
    Gain on sale of
     property, plant and
     equipment                      (71)       (442)       (225)       (776)
    Unrealized loss on other
     assets                         831         354         891         379
    Finance costs                 6,791         450       7,328         948
    Realized gain on long-
     term investment               (665)          -        (665)          -
    Onerous leases                  (43)          -         (43)          -
    Unrealized loss (gain)
     on foreign currencies
     translation                  4,511         (41)      4,696         713
    Current income tax
     expense                       (229)         81      (4,958)        396
    Deferred income tax
     recovery                    (6,310)     (1,518)     (1,412)     (2,403)
Income taxes recovered
 (paid)                            (680)        378      (1,061)        185
----------------------------------------------------------------------------
Cashflow                         10,860       1,775      18,681       6,814
  Changes in non-cash
   working capital items:
    Accounts receivable          27,555       2,881      16,592      10,421
    Inventory                     1,465       7,023       5,436       8,297
    Prepaid expenses and
     deposits                    (4,998)        450      (6,166)        869
    Accounts payable and
     accrued liabilities           (818)     (2,543)      1,419      (2,221)
    Deferred revenue             11,223      (2,845)      4,024      (4,753)
----------------------------------------------------------------------------
Cash provided by operating
 activities                      45,287       6,741      39,986      19,427
Investing:
  Purchase of property,
   plant and equipment          (10,504)     (2,571)    (13,432)     (4,882)
  Acquisitions                  (13,030)     (5,099)    (26,830)     (8,689)
  Cash acquired                  16,167           -      16,167           -
  Proceeds on sale of other
   assets                             -          13         115          66
  Proceeds on disposal of
   property, plant and
   equipment                        111       1,916       1,028       4,221
  Changes in non-cash
   working capital items            550        (100)       (213)     (2,128)
----------------------------------------------------------------------------
Cash used in investing
 activities                      (6,706)     (5,841)    (23,165)    (11,412)
Financing:
  Advances under long-term
   debt                         204,000           -     204,000           -
  Repayment of long-term
   debt                        (205,419)       (536)   (205,898)     (1,000)
  Repayment of obligations
   under finance leases            (497)       (601)       (944)     (1,266)
  Short-term loan collected       2,997           -           -           -
  Dividends to shareholders      (2,331)     (1,859)     (4,187)     (3,719)
  Issuance of common shares       2,289           -       2,289           -
  Repurchase of common
   shares                             -        (131)          -        (288)
  Interest paid                 (11,421)       (450)    (11,885)       (948)
  Change in bank
   indebtedness                 (12,087)          -           -           -
----------------------------------------------------------------------------
Cash used in financing
 activities                     (22,469)     (3,577)    (16,625)     (7,221)
----------------------------------------------------------------------------
Change in cash and cash
 equivalents                     16,112      (2,677)        196         794

Cash and cash equivalents,
 beginning of period                  -      12,346      15,916       8,875
----------------------------------------------------------------------------

Cash and cash equivalents,
 end of period                $  16,112   $   9,669   $  16,112   $   9,669
----------------------------------------------------------------------------

Segmented Information

The Company provides a variety of products and services in the oil and natural gas industry through five reporting segments, which operate substantially in three geographic segments. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labour required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in drilling, completion and production operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of natural gas compression and oil and natural gas process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labour required to operate the equipment. Corporate includes activities related to the Company's corporate and public issuer affairs.

As at and for the three months ended June 30, 2017 (unaudited)

                                      Contract     Rentals and  Compression
                                      Drilling  Transportation  and Process
                                      Services        Services     Services
----------------------------------------------------------------------------

Revenue                           $     41,304 $        13,377 $     65,356
Cost of services                        41,283           9,204       57,196
Selling, general and
 administration                          3,129           2,910        2,002
Share-based compensation                     -               -            -
Depreciation                             7,507           4,869        1,812
----------------------------------------------------------------------------
Operating income (loss)                (10,615)         (3,606)       4,346
Gain on sale of property, plant
 and equipment                               -              71            -
Finance costs                              (97)           (176)         (92)
----------------------------------------------------------------------------

Net income (loss) before income
 taxes                                 (10,712)         (3,711)       4,254
----------------------------------------------------------------------------

Goodwill                                     -           2,514        1,539
Total assets                           440,920         237,074      168,260
Total liabilities                       51,704          45,440       54,456
----------------------------------------------------------------------------
Capital expenditures(1)           $      4,779 $         3,283 $      1,418
----------------------------------------------------------------------------

As at and for the three months ended June 30, 2017 (unaudited)

                                          Well   Corporate        Total
                                     Servicing

------------------------------------------------------------------------

Revenue                           $     34,885$          - $    154,922
Cost of services                        25,845           -      133,528
Selling, general and
 administration                          1,580       5,012       14,633
Share-based compensation                     -         255          255
Depreciation                             4,574         849       19,611
------------------------------------------------------------------------
Operating income (loss)                  2,886      (6,116)     (13,105)
Gain on sale of property, plant
 and equipment                               -           -           71
Finance costs                                -      (6,281)      (6,646)
------------------------------------------------------------------------

Net income (loss) before income
 taxes                                   2,886     (12,397)     (19,680)
------------------------------------------------------------------------

Goodwill                                                 -        4,053
Total assets                           138,581      68,467    1,053,302
Total liabilities                        9,917     344,380      505,897
------------------------------------------------------------------------
Capital expenditures(1)           $        333$        691 $     10,504
------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Canada   United States     Australia
----------------------------------------------------------------------------

Revenue                                 89,724          35,589        29,609
Non-current assets (3)                 586,699         144,493       100,129
----------------------------------------------------------------------------



------------------------------------------------------------------------
                                               Other               Total
------------------------------------------------------------------------

Revenue                                            -             154,922
Non-current assets (3)                             -             831,321
------------------------------------------------------------------------


As at and for the three months ended June 30, 2016 (unaudited)

                                      Contract     Rentals and  Compression
                                      Drilling  Transportation  and Process
                                      Services        Services     Services
----------------------------------------------------------------------------

Revenue                           $        675 $         6,091 $     37,127

Cost of services                           619           4,492       32,091
Selling, general and
 administration                            382           2,671        1,440
Share-based compensation                     -               -            -
Depreciation                               196           4,143        1,854
----------------------------------------------------------------------------
Operating income (loss)                   (522)         (5,215)       1,742

Gain on sale of property, plant
 and equipment                              10             125          307
Finance income                               -               -            -
Finance costs                              (89)           (186)        (109)
----------------------------------------------------------------------------

Net income (loss) before income
 taxes                                    (601)         (5,276)       1,940
----------------------------------------------------------------------------

Goodwill                                     -           2,514        1,539

Total assets                           110,960         226,944      155,693
Total liabilities                       20,083          37,961       28,340
----------------------------------------------------------------------------

Capital expenditures(2)           $        195 $         7,185 $        286
----------------------------------------------------------------------------

As at and for the three months ended June 30, 2016 (unaudited)

                                          Well   Corporate
                                     Servicing
                                                                  Total
------------------------------------------------------------------------

Revenue                           $          -$          - $     43,893

Cost of services                             -           -       37,202
Selling, general and
 administration                              -         771        5,264
Share-based compensation                     -         501          501
Depreciation                                 -          22        6,215
------------------------------------------------------------------------
Operating income (loss)                      -      (1,294)      (5,289)

Gain on sale of property, plant
 and equipment                               -           -          442
Finance income                               -          11           11
Finance costs                                -        (420)        (804)
------------------------------------------------------------------------

Net income (loss) before income
 taxes                                       -      (1,703)      (5,640)
------------------------------------------------------------------------

Goodwill                                     -           -        4,053

Total assets                                 -      15,752      509,349
Total liabilities                            -      48,961      135,345
------------------------------------------------------------------------

Capital expenditures(2)           $          -$          4 $      7,670
------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Canada   United States     Australia
----------------------------------------------------------------------------

Revenue                                 39,804           2,852         1,114
Non-current assets (3)                 378,826          13,803         1,538
----------------------------------------------------------------------------



------------------------------------------------------------------------
                                               Other               Total
------------------------------------------------------------------------

Revenue                                          123              43,893
Non-current assets (3)                             -             394,167
------------------------------------------------------------------------


As at and for the six months ended June 30, 2017 (unaudited)

As at and for the six months ended    Contract     Rentals and  Compression
June 30, 2017                         Drilling  Transportation  and Process
                                      Services        Services     Services
----------------------------------------------------------------------------

Revenue                           $     48,000 $        30,933 $    125,456

Cost of services                        46,096          19,630      110,672
Selling, general and
 administration                          3,650           5,960        3,788
Share-based compensation                     -               -            -
Depreciation                             9,524           9,029        3,645
----------------------------------------------------------------------------
Operating income (loss)                (11,270)         (3,686)       7,351

Gain on sale of property, plant
 and equipment                               -             195           30
Finance costs                             (188)           (357)        (187)
----------------------------------------------------------------------------

Net income (loss) before income
 taxes                                 (11,458)         (3,848)       7,194
----------------------------------------------------------------------------

Goodwill                                     -           2,514        1,539

Total assets                           440,920         237,074      168,260
Total liabilities                       51,704          45,440       54,456
----------------------------------------------------------------------------

Capital expenditures (1)          $      5,241 $         4,701 $      2,466
----------------------------------------------------------------------------

As at and for the six months ended June 30, 2017 (unaudited)

As at and for the six months ended
June 30, 2017                             Well   Corporate
                                     Servicing                    Total
------------------------------------------------------------------------

Revenue                           $     34,885$          - $    239,274

Cost of services                        25,845           -      202,243
Selling, general and
 administration                          1,580       7,275       22,253
Share-based compensation                     -         484          484
Depreciation                             4,574         868       27,640
------------------------------------------------------------------------
Operating income (loss)                  2,886      (8,627)     (13,346)

Gain on sale of property, plant
 and equipment                               -           -          225
Finance costs                                -      (6,511)      (7,243)
------------------------------------------------------------------------

Net income (loss) before income
 taxes                                   2,886     (15,138)     (20,364)
------------------------------------------------------------------------

Goodwill                                                 -        4,053

Total assets                           138,581      68,467    1,053,302
Total liabilities                        9,917     344,380      505,897
------------------------------------------------------------------------

Capital expenditures (1)          $        333$        691 $     13,432
------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Canada   United States     Australia
----------------------------------------------------------------------------

Revenue                                159,682          44,053        35,528
Non-current assets (3)                 586,699         144,493       100,129
----------------------------------------------------------------------------



------------------------------------------------------------------------
                                               Other               Total
------------------------------------------------------------------------

Revenue                                           11             239,274
Non-current assets (3)                             -             831,321
------------------------------------------------------------------------


As at and for the three months ended June 30, 2016 (unaudited)

                                      Contract     Rentals and  Compression
As at and for the six months ended    Drilling  Transportation  and Process
June 30, 2016                         Services        Services     Services
----------------------------------------------------------------------------

Revenue                           $      3,862 $        17,235 $     72,752

Cost of services                         2,556          11,685       62,615
Selling, general and
 administration                            908           5,413        3,287
Share-based compensation                     -               -            -
Depreciation                               733           8,193        3,731
----------------------------------------------------------------------------
Operating income (loss)                   (335)         (8,056)       3,119

Gain on sale of property, plant
 and equipment                              10             180          586
Finance income                               -               -            -
Finance costs                             (182)           (375)        (220)
----------------------------------------------------------------------------

Net income (loss) before income
 taxes                                    (507)         (8,251)       3,485
----------------------------------------------------------------------------

Goodwill                                     -           2,514        1,539

Total assets                           110,960         226,944      155,693
Total liabilities                       20,083          37,961       28,340
----------------------------------------------------------------------------

Capital expenditures(2)           $        245 $        12,041 $      1,281
----------------------------------------------------------------------------

As at and for the three months ended June 30, 2016 (unaudited)

                                          Well
As at and for the six months ended   Servicing   Corporate
June 30, 2016                                                     Total
------------------------------------------------------------------------

Revenue                           $          -$          - $     93,849

Cost of services                             -           -       76,856
Selling, general and
 administration                              -       1,480       11,088
Share-based compensation                     -       1,010        1,010
Depreciation                                 -          40       12,697
------------------------------------------------------------------------
Operating income (loss)                      -      (2,530)      (7,802)

Gain on sale of property, plant
 and equipment                               -           -          776
Finance income                               -          11           11
Finance costs                                -        (550)      (1,327)
------------------------------------------------------------------------

Net income (loss) before income
 taxes                                       -      (3,069)      (8,342)
------------------------------------------------------------------------

Goodwill                                     -           -        4,053

Total assets                                 -      15,752      509,349
Total liabilities                            -      48,961      135,345
------------------------------------------------------------------------

Capital expenditures(2)           $          -$          4 $     13,571
------------------------------------------------------------------------

----------------------------------------------------------------------------
                                        Canada   United States     Australia
----------------------------------------------------------------------------

Revenue                                 84,669           7,790         1,114
Non-current assets (3)                 378,826          13,803         1,538
----------------------------------------------------------------------------

------------------------------------------------------------------------
                                               Other               Total
------------------------------------------------------------------------

Revenue                                          276              93,849
Non-current assets (3)                             -             394,167
------------------------------------------------------------------------
(1) Does not include acquisition of Savanna described in note 4 to the 2017
    second quarter Condensed Interim Consolidated Financial Statements.
(2) Includes acquisition of assets in January of 2016 described in note 5 to
    the 2016 annual audited Consolidated Financial Statements.
(3) Includes property, plant and equipment and goodwill.

Total Energy Services Inc. is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services, the fabrication, sale, rental and servicing of natural gas compression and oil and natural gas process equipment and well servicing. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.

For further information, please visit our website at www.totalenergy.ca

Notes to the Financial Highlights

(1) EBITDA means earnings before interest, taxes, depreciation and
    amortization and is equal to net loss before income taxes plus finance
    costs plus depreciation. EBITDA is not a recognized measure under IFRS.
    Management believes that in addition to net loss, EBITDA is useful
    supplemental measure as it provides an indication of the results
    generated by the Company's primary business activities prior to
    consideration of how those activities are financed, amortized or how the
    results are taxed in various jurisdictions as well as the cash generated
    by the Company's primary business activities without consideration of
    the timing of the monetization of non-cash working capital items.
    Readers should be cautioned, however, that EBITDA should not be
    construed as an alternative to net loss determined in accordance with
    IFRS as an indicator of Total Energy's performance. Total Energy's
    method of calculating EBITDA may differ from other organizations and,
    accordingly, EBITDA may not be comparable to measures used by other
    organizations.

(2) Working capital equals current assets minus current liabilities.

(3) Net Debt equals long-term debt plus obligations under finance leases
    plus current liabilities minus current assets.

(4) Basic and diluted shares outstanding reflect the weighted average number
    of common shares outstanding for the periods. See note 9 to the
    Company's Interim Consolidated Financial Statements for the three and
    six months ended June 30, 2017.

Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Forward-looking statements are based upon the opinions and expectations of management of Total Energy as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total Energy believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct.

In particular, this press release contains forward-looking statements concerning industry activity levels, expectations regarding Total Energy's market share and future compression and process production activity, Total Energy's expectations of future interest rates and its corresponding ability to realize substantial interest expense savings, expectations as to the Company's ability to realize cost efficiencies and synergies arising from the acquisition of Savanna as well as other expected benefits of the acquisition. Such forward-looking statements are based on a number of assumptions and factors including fluctuations in the market for oil and natural gas and related products and services, political and economic conditions, central bank interest rate policy, the demand for products and services provided by Total Energy, Total Energy's ability to attract and retain key personnel and other factors. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Total Energy to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Reference should be made to Total Energy's most recently filed Annual Information Form and other public disclosures (available at www.sedar.com) for a discussion of such risks and uncertainties.

The TSX has neither approved nor disapproved of the information contained herein.

Contacts:
Total Energy Services Inc.
Daniel Halyk
President & Chief Executive Officer
(403) 216-3921

Total Energy Services Inc.
Yuliya Gorbach
Vice-President Finance and Chief Financial Officer
(403) 216-3920

Total Energy Services Inc.
investorrelations@totalenergy.ca
www.totalenergy.ca

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