Wavefront Announces Fiscal Second Quarter 2013 Results
(firmenpresse) - EDMONTON, ALBERTA -- (Marketwired) -- 04/29/13 -- Wavefront Technology Solutions Inc. ("Wavefront" or the "Company") (TSX VENTURE: WEE) (OTCQX: WFTSF) a developer of leading-edge technology for fluid injection optimization for improved performance and profitability in the oil and gas and environmental sectors announces its financial results for the second quarter ending February 28, 2013.
Wavefront is a technology company with a reputation for quality, innovation and creativity. Wavefront is focused on global markets and utilizes its patented technology to provide measurable solutions when exploration and production companies (or "E&P" companies) are faced with the challenges of optimizing oil production, well intervention and performance drilling.
With the evolution of our core "pressure-pulse technology" to encompass a portfolio of products, our new theme, "From Bit to Last Drop", encompasses the life cycle of a client's post exploration operations. The Company's primary focus areas are: performance drilling; well stimulation; and mature field revitalization.
Innovative new Neptune designed to ensure constant water distribution
New developments this quarter include Wavefront's introduction of the "Neptune", an innovative pulsating selective injection waterflood regulator valve. Waterflood regulator valves are designed to inject water into a desired zone but are often plagued by scaling issues which inhibit water injection. This type of injection system is widely used in South America and Asia with as many as 21 valves in a single water injection well.
Injection rates and water distribution are crucial for maximizing overall oil recovery. The Neptune is designed to prevent scaling thus ensuring seamless, continuous injection enabling oil producing companies to maintain injection rates and improve water distribution in the oil-bearing formation.
In South America there are approximately 17,000 water regulator valves in use(1). Wavefront's marketing strategy is to sell the Neptune to clients with a target price of US $4,500 per valve. To obtain a recurring revenue stream the pulsating injection head on the Neptune would be replaced approximately every two years at a target price of US $1,500 per injection head.
(1) Eduardo Tidball, Binning Oil Tools, 2013
Realigned marketing plan capitalizes on evolving markets and international EOR opportunities
After a careful review of evolving market forces in the U.S. and Canada Wavefront's Board of Directors adopted a realignment of our strategic plan to guide Wavefront's operations in two key areas. Marketing in North America will focus primarily on performance drilling and well stimulation in 2013 and beyond, to promote the strengths of our stimulation and performance drilling technologies in response to the growing demand for these services throughout the U.S. and Canada.
This demand increase presents significant and almost immediate revenue generation potential and is the result of two key market developments. The first is the long term view of the price differential between the benchmark heavy oil prices in Canada, Western Canadian Select ("WCS") relative to West Texas Intermediate ("WTI") which has ranged from approximately $20 to $40 per barrel. The Company anticipates that prolonged high price differentials may negatively impact Powerwave mature field revitalization revenue generated in the Canadian market as oil producers evaluate operational strategies to reduce operating costs to address low Netback from production operations (Netback is calculated by taking the price of the oil, less all costs associated with getting the oil to a market. These costs can include; transportation, production and disposal, refining costs, royalty fees, taxes, and other costs).
The second market development is the focus of U.S. operators on tight oil plays and the technology in demand for operations in these conditions. In both cases there has been a move away from mature field revitalization and strongly towards drilling unconventional resources and stimulations. Wavefront's realigned marketing plan capitalizes on these market shifts while still utilizing its core Powerwave technologies, high gross profit margins and recurring revenue generating opportunities.
Wavefront will continue to market projects in Enhanced Oil Recovery ("EOR"), primarily to high value markets in Latin and South America, the Middle East and Asia. Within these markets there is tremendous revenue generation opportunity for EOR, despite the long sales cycle of approximately 9 months and two years required for evaluation of the technology.
Wavefront's fluid pulsing performance drilling tools were introduced to the drilling market in October 2012 and have been under evaluation in both Canada and the United States. The evaluation testing phase is required to better understand the use of the tools as well as to make necessary improvements to the quality control/quality assurance of the tool design to maximize tool benefits while ensuring tool integrity during operation. During this initial tool evaluation phase clients were provided a full discount on the day rate in exchange for data performance. The Company has recently, subsequent to the reporting period, started charging a daily rental rate ranging from $2,500 to $3,500 per day.
During the evaluation phase Wavefront obtained a wide range of results for ROP from 94% improvement to a 0% improvement. Generally, ROP increases fell within the 5% to 30% range.
"We are confident that Wavefront's growing suite of technologies, our patents, our experience and expertise and the strength of the Powerwave brand name positions the Company well over the long term to take advantage of the North American market opportunities related to performance drilling, well stimulation, and mature field revitalization," said Wavefront President and CEO, Brett Davidson. "At the same time, we are equally confident that our Enhanced Oil Recovery business has tremendous potential in Latin and South America, the Middle East and Asia."
Financial highlights for the three months ended February 28, 2013 include;
The above financial highlights should be read in conjunction with the unaudited consolidated financial statements and management discussion and analysis of results for Wavefront for the second quarter ended February 28, 2012, which were filed on SEDAR on April 29, 2013.
"Wavefront continues to focus on growth in all product lines, maintaining high gross profit margins, and controlling expenses,' said Davidson. "We're committed to meeting the needs of the marketplace with best-in-class technologies, knowledgeable people and attractive business arrangements that help our clients achieve greater profitability."
ON BEHALF OF THE BOARD OF DIRECTORS
WAVEFRONT TECHNOLOGY SOLUTIONS INC.
D. Brad Paterson, CFO & Director
Cautionary Disclaimer - Forward Looking Statements
Certain statements contained herein regarding Wavefront and its operations constitute "forward-looking statements" within the meaning of Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations or future performance, are "forward-looking statements". In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "believe", "continue" or the negative of these terms or other comparable terminology. We caution that such "forward-looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such factors include fluctuations in the acceptance rates of Wavefront's Powerwave and Primawave Processes, demand for products and services, fluctuations in the market for oil and gas related products and services, the ability of Wavefront to attract and maintain key personnel, technology changes, global political and economic conditions, and other factors that were described in further detail in Wavefront's continuous disclosure filings, available on SEDAR at . Wavefront expressly disclaims any obligation to up-date any "forward-looking statements", other than as required by law.
©2013 Wavefront Technology Solutions Inc. All rights reserved. From Bit To Last Drop™, Powerwave™ and Primawave™ are registered trademarks of Wavefront Technology Solutions Inc. .
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 release.
Contacts:
Wavefront Technology Solutions Inc.
Brett Davidson
President and CEO
780-486-2222
Wavefront Technology Solutions Inc.
D. Brad Paterson
CFO
780-486-2222
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Datum: 29.04.2013 - 23:06 Uhr
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News-ID 254104
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