Hanwei Energy Services Reports First Quarter Fiscal 2016 Financial and Operational Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 4, 2015) - Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company"), today reported its financial results for the three months ended June 30, 2015. All amounts are in Canadian Dollars unless otherwise noted.

The Company has two reportable segments for its continuing operations: its FRP pipe manufacturing and its oil and gas production. The pipe segment produces and sells fiberglass reinforced plastic ("FRP") pipe for the oil and gas industry and other infrastructure applications. The oil and gas segment is engaged in the exploration and production of oil and natural gas in Western Canada.

For the three months ended June 30, 2015:

• Total revenues were some $1.7 million as compared to $3.2 million for same period of the prior year with both segments of the Company impacted by the downturn in the oil and gas industry.
  
  
• FRP pipe sales totalled $1.0 million as compared to $3.0 million for the same periods of the prior year. The decrease of $2.0 million (or 67%) was primarily due to the reduction in oil and gas commodity prices negatively impacting the overall oil and gas industry with numerous projects placed on hold or delayed.
  
  
  • For the Chinese market sales were $0.9 million as compared to $1.1 million for the same period of the prior year.
    
    
  • For the Kazakhstan market sales were $57,000 as compared to $1.4 million for the same period of the prior year.
    
    
  • For the Canada market sales were $47,000 as compared to $0.5 million for the same period of the prior year.
    
    
• Oil and gas production revenues net of royalties amounted to $0.7 million as compared to $0.2 million for the same period of the prior year. The increase in revenues from the oil and gas business was driven by the Company's 13-33-49-26W4 Nisku horizontal well that was completed in October 2014 and the new 13-4-49-26W4 Nisku horizontal well which was put on test production following the lifting of the seasonal, spring Alberta road bans on May 14^th, 2015.
  
  
• EBITDA from continuing operations totalled some negative $0.5 million as compared to negative EBITDA of $0.1 million for the same period of the prior year.
  
  
  • Negative EBITDA was primarily driven by corporate expenses and losses from the FRP pipe segment.
    
    
  • The Company's oil and gas business delivered positive EBITDA of $0.1 million for the three months ended June 30, 2015.