/EINPresswire.com/ -- CALGARY, ALBERTA--(Marketwired - Aug 10, 2017) - 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 2017			Dec. 31 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 June 30						Six months ended 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 June 30						Six months ended 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 June 30						Six months ended 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			Well		Corporate			Total
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services
Revenue	$	41,304		$	13,377		$	65,356		$	34,885	$	-		$	154,922
Cost of services		41,283			9,204			57,196			25,845		-			133,528
Selling, general and administration		3,129			2,910			2,002			1,580		5,012			14,633
Share-based compensation		-			-			-			-		255			255
Depreciation		7,507			4,869			1,812			4,574		849			19,611
Operating income (loss)		(10,615	)		(3,606	)		4,346			2,886		(6,116	)		(13,105	)
Gain on sale of property, plant and equipment		-			71			-			-		-			71
Finance costs		(97	)		(176	)		(92	)		-		(6,281	)		(6,646	)
Net income (loss) before income taxes		(10,712	)		(3,711	)		4,254			2,886		(12,397	)		(19,680	)
Goodwill		-			2,514			1,539					-			4,053
Total assets		440,920			237,074			168,260			138,581		68,467			1,053,302
Total liabilities		51,704			45,440			54,456			9,917		344,380			505,897
Capital expenditures(1)	$	4,779		$	3,283		$	1,418		$	333	$	691		$	10,504

	Canada	United States	Australia	Other	Total
Revenue	89,724	35,589	29,609	-	154,922
Non-current assets (3)	586,699	144,493	100,129	-	831,321

As at and for the three months ended June 30, 2016 (unaudited)
	Contract			Rentals and			Compression			Well		Corporate
	Drilling			Transportation			and Process			Servicing
	Services			Services			Services								Total
Revenue	$	675		$	6,091		$	37,127		$	-	$	-		$	43,893
Cost of services		619			4,492			32,091			-		-			37,202
Selling, general and administration		382			2,671			1,440			-		771			5,264
Share-based compensation		-			-			-			-		501			501
Depreciation		196			4,143			1,854			-		22			6,215
Operating income (loss)		(522	)		(5,215	)		1,742			-		(1,294	)		(5,289	)
Gain on sale of property, plant and equipment		10			125			307			-		-			442
Finance income		-			-			-			-		11			11
Finance costs		(89	)		(186	)		(109	)		-		(420	)		(804	)
Net income (loss) before income taxes		(601	)		(5,276	)		1,940			-		(1,703	)		(5,640	)
Goodwill		-			2,514			1,539			-		-			4,053
Total assets		110,960			226,944			155,693			-		15,752			509,349
Total liabilities		20,083			37,961			28,340			-		48,961			135,345
Capital expenditures(2)	$	195		$	7,185		$	286		$	-	$	4		$	7,670

	Canada	United States	Australia	Other	Total
Revenue	39,804	2,852	1,114	123	43,893
Non-current assets (3)	378,826	13,803	1,538	-	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			Well		Corporate
	Services			Services			Services			Servicing					Total
Revenue	$	48,000		$	30,933		$	125,456		$	34,885	$	-		$	239,274
Cost of services		46,096			19,630			110,672			25,845		-			202,243
Selling, general and administration		3,650			5,960			3,788			1,580		7,275			22,253
Share-based compensation		-			-			-			-		484			484
Depreciation		9,524			9,029			3,645			4,574		868			27,640
Operating income (loss)		(11,270	)		(3,686	)		7,351			2,886		(8,627	)		(13,346	)
Gain on sale of property, plant and equipment		-			195			30			-		-			225
Finance costs		(188	)		(357	)		(187	)		-		(6,511	)		(7,243	)
Net income (loss) before income taxes		(11,458	)		(3,848	)		7,194			2,886		(15,138	)		(20,364	)
Goodwill		-			2,514			1,539					-			4,053
Total assets		440,920			237,074			168,260			138,581		68,467			1,053,302
Total liabilities		51,704			45,440			54,456			9,917		344,380			505,897
Capital expenditures (1)	$	5,241		$	4,701		$	2,466		$	333	$	691		$	13,432

	Canada	United States	Australia	Other	Total
Revenue	159,682	44,053	35,528	11	239,274
Non-current assets (3)	586,699	144,493	100,129	-	831,321

As at and for the three months ended June 30, 2016 (unaudited)
	Contract			Rentals and			Compression			Well
As at and for the six months ended	Drilling			Transportation			and Process			Servicing		Corporate
June 30, 2016	Services			Services			Services								Total
Revenue	$	3,862		$	17,235		$	72,752		$	-	$	-		$	93,849
Cost of services		2,556			11,685			62,615			-		-			76,856
Selling, general and administration		908			5,413			3,287			-		1,480			11,088
Share-based compensation		-			-			-			-		1,010			1,010
Depreciation		733			8,193			3,731			-		40			12,697
Operating income (loss)		(335	)		(8,056	)		3,119			-		(2,530	)		(7,802	)
Gain on sale of property, plant and equipment		10			180			586			-		-			776
Finance income		-			-			-			-		11			11
Finance costs		(182	)		(375	)		(220	)		-		(550	)		(1,327	)
Net income (loss) before income taxes		(507	)		(8,251	)		3,485			-		(3,069	)		(8,342	)
Goodwill		-			2,514			1,539			-		-			4,053
Total assets		110,960			226,944			155,693			-		15,752			509,349
Total liabilities		20,083			37,961			28,340			-		48,961			135,345
Capital expenditures(2)	$	245		$	12,041		$	1,281		$	-	$	4		$	13,571

	Canada	United States	Australia	Other	Total
Revenue	84,669	7,790	1,114	276	93,849
Non-current assets (3)	378,826	13,803	1,538	-	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.