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News Releases

August 9, 2017

STEP Energy Services Ltd. Reports Second Quarter 2017 Financial and Operating Results

CALGARY, Alberta, Aug. 09, 2017 (GLOBE NEWSWIRE) -- STEP Energy Services Ltd. (the “Company” or “STEP”) today announces financial and operating results for the three and six months ended June 30, 2017. The following press release should be read in conjunction with Management’s Discussion and Analysis (“MD&A”), condensed unaudited consolidated interim financial statements and notes thereto as at and for the three and six months ended June 30, 2017 and the MD&A and audited consolidated financial statements as at and for the year ended December 31, 2016. All of the above documents are available on STEP’s website at or on SEDAR at


STEP had record second quarter revenue and Adjusted EBITDA1 resulting in positive net earnings for the period.

  • Consolidated revenue was $105.4 million compared to $19.2 million for the same period in 2016.  Year to date consolidated revenue was $223.4 million compared to $46.8 million for the first half of 2016. Growth in deployed equipment, improved pricing, utilization, and increased fracturing intensity contributed to the increase in both periods.  

  • Revenue per operating day in Q2 2017 increased for coiled tubing and fracturing services relative to the same period in 2016 by 22% and 107%, respectively, averaging $42,485 and $252,405.  Operating days in Q2 2017 increased 777% for fracturing to 272 days and increased 95% for coiled tubing to 866 days compared to Q2 of 2016, driven by additional deployed equipment to support the higher demand for our services.

  • Adjusted EBITDA1 for Q2 2017 was $16.4 million (or 16%) and $37.6 million (or 17%) in the first half of 2017, which is an increase of $20.1 million and $41.6 million, respectively, over the same periods in 2016.  Stronger pricing, higher utilization over a larger fleet of deployed equipment, and better operating efficiencies all contributed to the increase.

  • Recorded positive net income of $2.6 million in the second quarter, a period traditionally represented by net losses for oilfield service companies in Canada due to seasonality, and $11.6 million for the first six months of 2017, compared to a loss $7.5 million and a loss of $16.1 million, respectively, in the same periods of 2016. 

  • Upon full execution of our 2017 capital program of $100 million (plus the 2016 carry-forward capital of $9 million), STEP expects to have an operating fleet of 21 coiled tubing spreads (including eight in the U.S.) and eight fracturing spreads representing approximately 225,000 horsepower (“HP”).  Deployment of the eighth U.S. coiled tubing spread and eighth fracturing spread is scheduled for the first quarter of 2018.

  • Strong financial position at June 30, 2017 with significant working capital of $96.3 million (including cash and cash equivalents of $57.1 million) and no drawings on our $100 million credit facility.

  • STEP completed an initial public offering on May 2, 2017, issuing 10.0 million common shares at $10.00 per share, raising aggregate gross proceeds $100.0 million.  Proceeds were initially used to repay debt and will support the ongoing execution of our capital program. 

1 See Non-IFRS Measures. “Adjusted EBITDA” is a financial measure not presented in accordance with IFRS and is equal to net income before finance costs, depreciation and amortization, loss (gain) on disposal of property and equipment, impairment, current and deferred income tax, share‐based compensation, transaction costs and foreign exchange (gain) loss.


The Company’s consolidated second quarter financial and operating highlights are presented below. 

FINANCIAL   Three months ended
June 30,
 Six months ended
June 30, 
($000s except percentages, shares and per share amounts) 2017  2016  2017  2016 
Consolidated revenue$105,446 $19,230 $223,430 $46,808 
Net income (loss) attributable to shareholders$2,600 $(7,471)$11,592 $(16,096)
  Per share-basic$0.05 $(0.18)$0.22 $(0.43)
  Per share-diluted$0.04 $(0.18)$0.22 $(0.43)
Adjusted EBITDA (1)$16,439 $(3,653)$37,580 $(3,987)
Adjusted EBITDA % (1) 16% n/m  17% n/m 
($000s except per day, days, units, and HP)        
Total fracturing operating days (1) 272  31  633  67 
Fracturing revenue per operating day$252,405 $121,865 $233,800 $112,338 
Fracturing capacity (HP):        
  Average active HP 145,000  50,000  145,000  50,000 
  Exit active HP 145,000  50,000  145,000  50,000 
  Total HP (2) 297,500  290,000  297,500  290,000 
Total coiled tubing operating days (1) 866  445  1,772  1,058 
Coiled tubing revenue per operating day$42,485 $34,725 $42,570 $37,128 
Coiled tubing capacity:        
  Average active coiled tubing units 14  9  14  11 
  Exit active coiled tubing units 15  10  15  10 
  Total coiled tubing units 16  15  16  15 
Capital expenditures$ 32,654 $66,369 $  53,596 $72,931 

(1) An operating day is defined as any coiled tubing and fracturing work that is performed in a 24 hour period, exclusive of support equipment.
(2) Represents total owned HP, of which 176,750 HP is currently deployed and the remainder of which requires certain maintenance and refurbishment. 

BALANCE SHEET   As at June 30, As at December 31, 
($000s except shares and per share amounts)   2017   2016 
Cash and cash equivalents  $57,051  $2,151 
Working capital  $96,284  $29,872 
Total long-term financial liabilities  $5,475  $33,994 
Total assets  $460,877  $335,140 
Shares Outstanding        
  Basic   60,120,191   47,719,703 
  Weighted average shares - basic   53,053,199   42,400,845 
  Weighted average shares - diluted   53,654,521   42,400,845 

(1) See Non-IFRS Measures. “Adjusted EBITDA” is a financial measure not presented in accordance with IFRS and is equal to net income before finance costs, depreciation and amortization, loss (gain) on disposal of property and equipment, impairment, current and deferred income tax, share‐based compensation, transaction costs and foreign exchange (gain) loss.


Increased North American drilling activity in response to strengthening commodity prices led to increased demand for STEP’s services in the first half of 2017.  A backlog of work was created during the first quarter of 2017 by the undersupply of active fracturing equipment, resulting in some Q1 2017 drilling and completion programs being deferred to the second quarter (or later) of 2017.  Improved pricing for our services in response to strong demand was partially offset by inflation in input costs such as chemicals, hauling, proppant, coiled tubing strings and personnel.  The improvement in industry conditions has resulted in a tightening of the supply chain including major components, select proppants and chemicals. We continue to work closely with key suppliers to provide projections to support our business and client requirements.  Competition for skilled personnel, particularly field professionals, has increased significantly. 

Canadian Segment
As at June 30, 2017, our Canadian operations were comprised of 297,500 fracturing HP of which a fleet of five fracturing spreads were staffed and operating representing 145,000 HP, compared with two spreads representing 50,000 HP at June 30, 2016.  The additional deployed assets in the quarter enabled us to expand our client base and increase activity with existing clients to support market demand resulting in a significant improvement in fracturing operating days from 31 days in Q2 2016 to 272 days in Q2 2017.  Increased fracturing intensity and improved pricing contributed to the higher fracturing revenue per day in Q2 2017 of $252,405, 107% higher than Q2 2016.  The majority of STEP’s HP is deployed in plays in Canada where fracturing intensity is increasing, which has a positive impact on revenue per operating day.

At June 30, 2017, STEP had 12 purpose-built coiled tubing spreads in Canada, of which 11 were staffed and deployed.  This compares to seven staffed units (out of a fleet of 12 units) in Canada at June 30, 2016.  The additional deployed equipment contributed to an increase in utilized days from 378 days in Q2 2016 to 573 days in Q2 2017. 

The Canadian Segment generated Adjusted EBITDA of $13.3 million (or 14%) in the second quarter of 2017 and $33.8 million (or 17%) year-to-date.

U.S. Segment
As of quarter end, STEP had four active coiled tubing spreads in the U.S.  During Q2 2017, improving demand, additional U.S. coiled tubing capacity, and continued growth in STEP’s client base contributed to increased coil tubing operating days from 67 days in Q2 2016 to 293 days in Q2 2017. 

The U.S. Segment generated Adjusted EBITDA of $3.1 million (or 24%) in the second quarter of 2017 and $3.8 million (or 18%) year-to-date.


Subsequent to quarter end, our sixth fracturing spread in Canada was staffed bringing total deployed horsepower to 176,750 HP.  We continue to be encouraged by the growth and profitability of our U.S. coiled tubing operation and took delivery of our fifth U.S. coiled tubing spread in July 2017 in Louisiana. 

Upon completion of our previously announced 2017 capital program of $100 million (plus the 2016 carry-forward capital of $9 million), STEP expects to have an operating fleet of 21 coiled tubing spreads (including eight in the U.S.) and eight fracturing spreads representing approximately 225,000 horsepower. Deployment of the eighth U.S. coiled tubing spread and eighth fracturing spread is scheduled for the first quarter of 2018.  STEP’s ability to deploy additional equipment will be dependent on access to key components, shop capacity and the availability of qualified personnel to staff equipment.

Based on client discussions, activity levels are expected to remain robust for the second half of 2017. Recent commodity price volatility has the potential to reduce industry activity as the year progresses.  Management continuously monitors commodity prices and takes a real-time approach to assessing demand for our services.  We engage with our clients to understand potential changes to the drilling and completion programs and will continue to take a measured approach to the pace of our equipment deployment and capital allocation. 

We continue to be committed to technology advancements and our approach in developing modern fit-for-purpose equipment and solutions.  Such advancements include fiber optics and e-line with our coiled tubing operations, STEP-PLEX™ diverting agents in association with recompletion activities, and field equipment automation.


Please see the discussion in the Non‐IFRS Measures section of the MD&A for the reconciliation of non‐IFRS items to IFRS measures.


This document contains certain forward‐looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "should", "believe", "plans" and similar expressions are intended to identify forward‐looking information or statements. In particular, but without limiting the foregoing, this document contains forward‐ looking information and statements pertaining to the following: expected expansion and profitability from the U.S.; anticipated growth in fracturing services; anticipated increased demand for coiled tubing services; timing of delivery of additional spreads; activity levels; the ability to deploy additional equipment; utilization; monitoring of client capital budgets; and the amount of capital expenditures in 2017.

The forward‐looking information and statements contained in this document reflect several material factors and expectations and assumptions of the Company including, without limitation: that the Company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; the impact of seasonal weather conditions; and certain cost assumptions.  The Company believes the material factors, expectations and assumptions reflected in the forward‐looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.  

The forward‐looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward‐looking information or statements including, without limitation: changes in the demand for or supply of the Company's services; unanticipated operating results; changes in tax or environmental laws, or other regulatory matters; changes in the development plans of third parties; increased debt levels or debt service requirements; limited, unfavourable or a lack of access to capital markets; increased costs; the impact of competitors; reliance on industry partners; attracting and retaining skilled personnel and certain other risks detailed in the Prospectus (including, without limitation, those risks identified in this document).  

The forward‐looking information and statements contained in this document speak only as of the date of the document, and none of the Company or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.  The reader is cautioned not to place undue reliance on forward‐looking information.


STEP Energy Services is an oilfield service company founded in 2011 that provides fully integrated coiled tubing and fracturing solutions.  Our combination of modern, fit-for-purpose fracturing and coiled tubing equipment has differentiated STEP in plays where wells are deeper, have longer laterals, and higher pressure.

Initially operating only in Canada as a specialized, deep capacity coiled tubing company, in 2015 we expanded into the U.S. and also began offering fracturing services to our Canadian clients.  Currently, STEP is a fully integrated, deep capacity coiled tubing and fracturing solutions provider focused primarily in the Montney and Duvernay in Canada, and as coiled tubing services provider in the Permian and Eagle Ford in Texas and the Haynesville in Louisiana.  Our U.S. business is a key differentiator for STEP, as the rate of expansion and profitability from that segment is expected to contribute meaningfully to the Company’s growth.  Our continuing track record of safety, efficiency and execution drives repeat business from our blue-chip exploration and production (“E&P”) clients. 

CONTACT: For more information please contact:
Regan Davis
President & Chief Executive Officer

Telephone:  403-457-1772

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