CALGARY, ALBERTA--(Marketwired - May 14, 2015) - Canadian Energy Services & Technology Corp. ("CES" or the "Company") (TSX:CEU)(OTCQX:CESDF) is pleased to report on its financial and operating results for the three months ended March 31, 2015. Further, CES announced today that it will pay a cash dividend of $0.0275 per common share on June 15, 2015 to the shareholders of record at the close of business on May 29, 2015.

CESTC is also pleased to announce today the appointment of Mr. Philip J. Scherman, FCA, ICD.D, to the Board of Directors. Mr. Scherman is a chartered accountant and currently sits on the board of Mullen Group Ltd. and Parallel Energy Trust. He is also a member of the audit committee of the Province of Alberta and The Calgary Foundation. Mr. Scherman has served on the boards of a number of not-for-profit organizations. Prior thereto, Mr. Scherman was an engagement partner at KPMG from 1982 to 2012 for public and private energy and energy service entities. Mr. Scherman also served on the KPMG Canada Board of Directors for six years. Mr. Scherman is a member of the Canadian and Alberta Institutes of Chartered Accountants and has been awarded the Fellow of the Chartered Accountants designation.

CES generated revenue of $233.8 million during the three months ended March 31, 2015, compared to $231.3 million for the three months ended March 31, 2014, an increase of $2.5 million or 1%. Gross revenue was negatively affected by a precipitous drop-off in drilling activity in Q1 2015, and an overall reduction in gross revenues due to price discounting across all business units in response to customer demands in the current low commodity price environment. Offsetting these negative factors was the year-over-year growth of the JACAM and PureChem business units and the positive translation effect on US source revenues due to the devaluation of the Canadian Dollar ("CAD") versus the US Dollar ("USD").

Revenue generated in the US for the three months ended March 31, 2015 increased by $32.3 million or 26% compared to the three months ended March 31, 2014, from $124.4 million to $156.7 million. This increase is a result of the significant contribution to revenue growth from increased production and specialty chemicals sales by JACAM. Revenue from the US drilling fluids business remained flat in Q1 2015 in comparison to Q1 2014. Despite current market conditions and the decline in the overall US rig count, some of the Company's larger US customers continued to remain active drillers in Q1 2015, which is reflected in the growth in the Company's US Market Share and CES' US Operating Days falling less than industry metrics. The Company's US revenues were also positively impacted on translation by weakness in the CAD throughout Q1 2015.

Revenue generated in Canada for the three months ended March 31, 2015 decreased by $29.9 million or 28% compared to the three months ended March 31, 2014, from $106.9 million to $77.1 million. Gross revenue was negatively affected by the steep drop-off in drilling activity in Q1 2015, peak activity levels did not reach previous year highs and rig counts in Canada began dropping in mid-January as customers curtailed spending and stopped drilling leading to an early "spring break-up". In addition, CES responded proactively to its customers' demand for lower service costs in the current low commodity price environment and discounted work that lowered gross revenues. Offsetting this was year-over-year growth in production and specialty chemical sales as PureChem continued to take market-share in Canada.

As always, and particularly in this difficult environment, CES will closely manage its dividend levels and capital expenditures in order to preserve its financial strength, its low capital re-investment model and its strong liquidity position.

CES also announced today that it will pay a cash dividend of $0.0275 per common share on June 15, 2015 to the shareholders of record at the close of business on May 29, 2015.

CES Q1 Results Conference Call

With respect to the first quarter results, CES will host a conference call / webcast at 9:00 am MST (11:00 am EST) on Friday, May 15, 2015.

North American toll-free: 1-877-291-4570

International / Toronto callers: 647-788-4922

Link to Webcast: or


CES remains cautious with its outlook for 2015. As a result of falling oil prices and weak natural gas prices, rig counts in both Canada and the US have been dropping throughout the first four months of 2015 with no clear consensus on how low they will go and for how long. In Canada, the early spring break-up is expected to be protracted and due to financial constraints of our customers, it is expected it will outlast the typical weather constraints with respect to a resumption of drilling activity. In addition, pricing pressure from customers across all our business units has been intense, as they attempt to rationalize their businesses in this challenging commodity price environment. The end result is CES will do less drilling fluids work in 2015 and will do all of its work for less money in 2015. CES' production and specialty chemical business should see growth in this downturn as its expected PureChem and JACAM will continue to take market-share in a market that will continue to grow. With a strong and flexible balance sheet, CES is well positioned to weather the current downturn in oilfield activity. In 2015, CES will focus on retaining accounts, rationalizing costs, monitoring and capturing opportunities, and making strategic investments as required to position the business to capitalize on the next positive cycle.

Through both its JACAM and PureChem divisions, CES has vertically integrated manufacturing capabilities with unutilized throughput at both its Sterling, KS and Carlyle, SK plants. CES has a full suite of technically advanced solutions of production chemicals for consumption at the wellhead or pump -jack, and specialty chemicals for the pipeline and mid-stream market. These markets are less volatile and are growing on a year-over-year basis as the volumes of produced hydrocarbons and the associated produced water increases.

CES continues to make significant strides in advancing its strategic vision of being a leading, vertically integrated, full life cycle provider of technically advanced oilfield chemical solutions. Although revenue generated at the drill - bit and at the completions stage will remain subject to volatility, operators continue to drill more complex, deeper, and longer horizontal wells that require more chemicals and fluids in general, but also more technically advanced chemical solutions in order to be successfully drilled, cased completed and produced.

As challenges faced by the oil and gas industry become more complex, advanced technologies are becoming increasingly important in driving success for operators. CES will continue to invest in innovation to be a leader in technology advancements in the consumable oilfield chemical markets. With the addition of JACAM's state of the art laboratory in Sterling, Kansas, CES now operates four separate lab facilities across North America which also includes Houston, Calgary, and Carlyle. CES also leverages third party partner relationships to drive innovation.

CES believes over time it can grow its market share within each of these sub-segments of the oilfield consumable chemical market. CES' strategy is to utilize its patented and proprietary technologies and superior execution to increase market share. CES believes that its unique value proposition in this increasingly complex operating environment makes it the premier independent provider of technically advanced consumable chemical solutions throughout the life-cycle of the oilfield in North America.

Despite the activity pullback as a result of low oil and natural gas prices, CES remains very optimistic about the long-term growth prospects of its business. The integration of JACAM with the overall business is progressing successfully. JACAM products have been introduced into Canada on both the drilling fluids side and through PureChem with very positive results. In the US, steps have been undertaken to support AES operations with JACAM manufactured materials and to expand JACAM's market penetration via the established AES platform.

From a manufacturing perspective, CES is undertaking further vertical integration initiatives at the JACAM facility with the build-out of hydrogenation capabilities to be completed in Q4 2015. CES also expects to commission the new barite grinding facility in Corpus Christi in Q3 2015 which will further vertically integrate the US drilling fluids business.

The Clear Environmental Solutions division continues to complement CES' core drilling fluids business and despite the pullback in drilling activity has consistently remained profitable. The Environmental Services division is focused on expanding its operational base in the WCSB by specializing in water management issues and is pursuing opportunities in the oil sands and horizontal drilling markets.

The EQUAL Transport division remains profitable. Although activity levels will be down in 2015, it is expected this business will continue to be instrumental in supporting the core businesses and be economically viable.

On the corporate level, CES continually assesses integrated business opportunities that will keep CES competitive and enhance profitability. All acquisitions must meet CES' stringent financial and operational metrics.

As always, and particularly in this difficult environment, CES will closely manage its dividend levels and capital expenditures in order to preserve its financial strength, its low capital re-investment model and its strong liquidity position.

Business of CES

CES is a leading provider of technically advanced consumable chemical solutions throughout the life-cycle of the oilfield. This includes total solutions at the drill-bit, at the point of completion and stimulation, at the wellhead and pump-jack, and finally through to the pipeline and midstream market. At the drill-bit, CES' designed drilling fluids encompass the functions of cleaning the hole, stabilizing the rock drilled, controlling subsurface pressures, enhancing drilling rates, and protecting potential production zones while conserving the environment in the surrounding surface and subsurface area. At the point of completion and stimulation, CES' designed chemicals form a critical component of fracking solutions or other forms of well stimulation techniques. The shift to horizontal drilling and multi-stage fracturing with long horizontal well completions has been responsible for significant growth in the drilling fluids and completion and stimulation chemicals markets. At the wellhead and pump-jack, CES' designed production and specialty chemicals provide down-hole solutions for production and gathering infrastructure to maximize production and reduce costs of equipment maintenance. Key solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides and other specialty products. Further, specialty chemicals are used throughout the pipeline and midstream industry to aid in hydrocarbon movement and manage transportation and processing challenges including corrosion, wax build-up and H2S.

CES operates in the Western Canadian Sedimentary Basin ("WCSB") and in several basins throughout the United States ("US"), with an emphasis on servicing the ongoing major resource plays. In Canada, CES operates under the trade names Canadian Energy Services, PureChem Services ("PureChem"), Clear Environmental Solutions ("Clear"), and EQUAL Transport ("EQUAL"). In the US, CES operates under the trade names AES Drilling Fluids ("AES"), AES Drilling Fluids Permian ("AES Permian"), and JACAM Chemicals ("JACAM").

The Canadian Energy Services, AES, and AES Permian brands are focused on the design and implementation of drilling fluids systems for oil and gas producers. The JACAM and PureChem brands are vertically integrated manufacturers of advanced production and specialty chemicals for the wellhead and pump-jack, drilling related chemicals, technically advanced fluids for completions and stimulations, and chemical solutions for the pipeline and midstream markets.

Two complimentary business divisions support the operations and augment the product offerings in the WCSB. Clear is CES' environmental division, providing environmental consulting and drilling fluids waste disposal services primarily to oil and gas producers active in the WCSB. EQUAL is CES' transport division, providing its customers with trucks and trailers specifically designed to meet the demanding requirements of off -highway oilfield work in the WCSB. EQUAL transports and handles oilfield produced fluids and supports the oilfield chemical business by hauling, handling, managing and warehousing products. EQUAL operates from two terminals and yards located in Edson, Alberta and Carlyle, Saskatchewan.

Financial Highlights
Three Months Ended
March 31,
($000's, except per share amounts) 2015 2014
Revenue 233,762 231,310
Gross margin (1) 57,231 64,447
Income before taxes 16,509 25,422
per share - basic (2) 0.08 0.13
per share - diluted (2) 0.07 0.12
Net income (3) 13,911 19,492
per share - basic (2) 0.06 0.10
per share - diluted (2) 0.06 0.09
EBITDAC (1) 41,057 43,522
per share - basic (2) 0.19 0.22
per share - diluted (2) 0.19 0.21
Funds Flow From Operations (1) 34,764 35,566
per share - basic (2) 0.16 0.18
per share - diluted (2) 0.16 0.17
Dividends declared 17,848 13,488
per share (2) 0.0825 0.0667
Three Months Ended
March 31,
Shares Outstanding 2015 2014
End of period (2) 217,037,911 203,260,062
Weighted average
- basic (2) 216,131,621 201,975,414
- diluted (2) 221,250,593 210,566,073
As at
Financial Position ($000's) March 31, 2015 December 31, 2014
Net working capital 305,890 307,081
Total assets 1,109,023 1,088,080
Long-term financial liabilities (4) 353,633 378,662
Shareholders' equity (5) 602,378 540,037
1 CES uses certain performance measures that are not recognizable under International Financial Reporting Standards ("IFRS"). These performance measures include net income before interest, taxes, depreciation and amortization, gains and losses on disposal of assets, goodwill impairment, unrealized foreign exchange gains and losses, unrealized derivative gains and losses, and stock-based compensation ("EBITDAC"), and Funds Flow From Operations. Management believes that these measures provide supplemental financial information that is useful in the evaluation of CES' operations. Readers should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with IFRS as an indicator of CES' performance. CES' method of calculating these measures may differ from that of other organizations and, accordingly, these may not be comparable. Please refer to the Non-GAAP measures section of CES' MD&A for the three months ended March 31, 2015.
2 Pursuant to the three-for-one split of CES' outstanding common shares effective at the close of business on July 18, 2014, all historical per share data has been retroactively adjusted to reflect the stock split.
3 Represents net income attributable to the shareholders of the Company.
4 Includes long-term portion of the Deferred acquisition consideration, the Senior Facility, the Senior Notes, vehicle and equipment financing, and finance leases.
5Represents Shareholders' equity attributable to the shareholders of the Company.

Cautionary Statement

Except for the historical and present factual information contained herein, the matters set forth in this press release, may constitute forward-looking information or forward-looking statements (collectively referred to as "forward-looking information") which involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CES, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward- looking information. When used in this press release, such forward-looking information uses such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", and other similar terminology. This information ref lects CES' current expectations regarding future events and operating performance and speaks only as of the date of this press release. Forward- looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, including, but not limited to, the factors discussed below.
The management of CES 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 contained in this document speak only as of the date of the document, and CES assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws or regulations. The material assumptions in making forward-looking statements include, but are not limited to, assumptions relating to demand levels and pricing for the Oilfield Chemistry offerings of the Company; fluctuations in the price and demand for oil and natural gas; anticipated activity levels of the Company's significant customers; commodity pricing; genera l economic and financial market conditions; timing and the financial contribution achieved from our 2014 planned capital expenditures; the successful integration of recent acquisitions; the Company's ability to finance its operations; levels of drilling and other activity in the WCSB, the Permian and other basins, the effects of seasonal and weather conditions on operations and facilities; changes in laws or regulations; currency exchange fluctuations; the ability of the Company to attract and retain skilled labour and qualified management; and other unforeseen conditions which could impact the Company's business of supplying Oilfield Chemistry to the Canadian and US markets and the Company's ability to respond to such conditions.

In particular, this press release contains forward-looking information pertaining to the following: future estimates as to dividend levels, including the payment of a dividend to shareholders of record on May 29, 2015; the potential means of funding dividends; the intention to make future dividend payments; the certainty and predictability of future cash flows and earnings; the sufficiency of liquidity and capital resources to meet long-term payment obligations; the seasonality of CES' business and anticipated reduction in exposure to the effects of spring break-up in the WCSB; the duration of spring break-up; the long-term capital investments required for CES to execute on its business plan; the expected timing for completion of expansions at JACAM facilities; the commissioning date of the barite grinding facility in Corpus Christi; management's opinion of the impact of any potential litigation or disputes; the application of critical accounting estimates and judgements; the collectability of accounts receivable; the retention of accounts, rationalization of costs and completion of strategic investments in 2015; CES' ability to increase or maintain its market share, including expectations that PureChem and JACAM will increase market-share in the oilfield consumable chemical market; supply and demand for CES' products and services, including expectations for growth in CES' production and speciality chemical sales and expected growth in the consumable chemicals market; industry activity levels; commodity prices; treatment under governmental regulatory and taxation regimes; expectations regarding expansion of services in Canada and the United States; development of new technologies; expectations regarding CES' growth opportunities in Canada and the United States; the effect of acquisitions on the Company; expectations regarding the performance or expansion of CES' operations; expectations regarding demand for CES' services and technology; investments in research and development and technology advancements; access to debt and capital markets; and competitive conditions.

CES' actual results could differ materially from those anticipated in the forward-looking information as a result of the following factors: general economic conditions in Canada, the United States, and internationally; fluctuations in demand for consumable fluids and chemical oilfield services, and the recent downturn in oilfield activity; a decline in activity in the WCSB, the Permian and other basins in which the Company operates; volatility in market prices for oil, natural gas, and natural gas liquids and the effect of this volatility on the demand for oilfield services generally; the recent declines in prices for oil, and pricing differentials between world pricing and pricing in North America; competition, and pricing pressures from customers in the current commodity environment; currency risk as a result of recent fluctuations in value of the U.S. dollar; liabilities and risks, including environmental liabilities and risks inherent in oil and natural gas operations; sourcing, pricing and availability of raw materials, consumables, component parts, equipment, suppliers, facilities, and skilled management, technical and field personnel; the collectability of accounts receivable, particularly in the current low oil and natural gas price environment; ability to integrate technological advances and match advances of competitors; availability of capital; uncertainties in weather and temperature affecting the duration of the oilfield service periods and the activities that can be completed; the ability to successfully integrate and achieve synergies from the Company's acquisitions; changes in legislation and the regulatory environment, including uncertainties with respect to programs to reduce greenhouse gas and other emissions and regulations restricting the use of hydraulic fracturing; reassessment and audit risk associated with the Conversion and other tax filing matters; changes to the fiscal regimes applicable to entities operating in the WCSB and the US; access to capital and the liquidity of debt markets; fluctuations in foreign exchange and interest rates, and the other factors considered under "Risk Factors" in CES' Annual Information Form for the year ended December 31, 2014 and "Risks and Uncertainties" in CES' MD&A. dated May 14, 2015.

CES has filed its first quarter 2015 unaudited condensed consolidated financial statements and notes thereto as at March 31, 2015 and for the three months ended March 31, 2015, and accompanying management discussion and analysis in accordance with National Instrument 51-102 - Continuous Disclosure Obligations adopted by the Canadian securities regulatory authorities. Additional information about CES will be available on CES' SEDAR profile at and CES' website at


Contact Information:

Canadian Energy Services & Technology Corp.
Tom Simons
President and Chief Executive Officer
(403) 269-2800

Canadian Energy Services & Technology Corp.
Craig F. Nieboer, CA
Chief Financial Officer
(403) 269-2800
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