Intercept Energy Services Reports First Quarter – March 31, 2015 Results

EDMONTON, AB/ ACCESSWIRE / May 26, 2015 / Intercept Energy Services Inc. (“IES” or the “Corporation”)
(TSX-V: IES / OTCBB: IESCF), a leading Oilfield Services Firm (“OFS”) specializing in frac water heating, unconventional energy extraction, oilfield equipment, oilfield waste disposal and recovery of reusable products from waste, today reported financial results for the first quarter ended March 31, 2015.

First Quarter Ended March 31, 2015 Highlights

-Gross revenues were lower by 15 percent to $1.2 million for the three months ended March 31, 2015 compared to $1.4 million for the same quarter last year, mainly due to decrease in the average charge out rates for its Heating Units in the USA due to the general overall slowdown of the oil and gas activities in the regions where the Corporation operates.
-During the first quarter of 2015 the Corporation closed on a non-brokered private placement and issued 20 million units at $0.05 per unit for gross proceeds of $1 million. Each unit consists of one common share of the Corporation and one share purchase warrant that entitles the holder to purchase one additional common share of the Corporation for a period of two years from the closing date at a price of $0.075 per share for the first twelve months and $0.10 for the remaining twelve months.
-The Corporation had a total of 5 Heating Units operating as at the end of March 31, 2015 compared to 4 Heating Units as at the end March 31, 2014;
-Net loss before other items for the quarter ended March 31, 2015 was $0.9 million compared to a net loss before other items of $0.3 million for the same quarter last year and increase in loss before other items by 166 percent , mainly due to decrease in overall revenues and decrease in average charge out rates for its Heating Units during the current quarter due to slower oil and gas activities in the regions where the Corporation operates;
-Net loss for the quarter ended March 31, 2015 was $1.1 million compared to a net loss of $0.4 million for the same quarter last year an increase in loss by 170 percent, mainly due decrease in overall revenues and decrease in average charge out rates for its Heating Units during the current quarter due to slower oil and gas activities in the regions where the Corporation operates and increase in finance expenses as the Corporation entered into higher rate lease financing for its Equipment during the second half of 2014.

Commenting on first quarter ended March 31, 2015 results, Mr. Swapan Kakumanu, IES, Chief Financial Officer stated, “Our first quarter results were impacted by the overall slowdown of in oil and gas activities in the regions we currently operate. The Company is taking necessary steps to stream line operations and adjust costs with the new changed economic environment. We expect to see continued pressure on our charge out rates on our Heating Units during the remainder of 2015.”

The following pages are taken from the Completed Financial Statements and are available through SEDAR at http://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00006007 or on the Company’s website.

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March 31, 2015 condensed interim financial statements

INTERCEPT ENERGY SERVICES INC.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian dollars – Unaudited)

	March 31, 2015 Unaudited	December 31, 2014 Audited

ASSETS

Current assets
Cash	$ 1,458,051	$ 109,577
Trade and other receivables	2,449,444	3,251,976
Prepaids and deposits	28,752	37,113
Total current assets	3,936,247	3,398,666

Non-current assets
Equipment	3,270,620	3,446,677
TOTAL ASSETS	$ 7,206,867	$ 6,845,343

LIABILITIES

Current liabilities
Trade and other payables	$ 3,488,346	$ 2,922,406
Current portion of loans and borrowings	858,804	830,693
Current portion of finance lease obligations	367,399	346,465
Current portion of derivative liability	31,195	42,311
Total current liabilities	4,745,744	4,141,875

Non-current liabilities
Loans and borrowings	346,719	340,702
Finance lease obligations	1,933,450	2,031,376
Derivative liability	59,713	38,460
Total long term liabilities	2,339,882	2,410,538
TOTAL LIABILITIES	7,085,626	6,552,413

EQUITY
Share capital	12,144,885	11,554,885
Contributed surplus	6,446,992	6,078,559
Deficit	(18,470,636)	(17,340,514)
TOTAL EQUITY	121,241	292,930
TOTAL LIABILITIES AND EQUITY	$ 7,206,867	$ 6,845,343

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INTERCEPT ENERGY SERVICES INC.

CONDENSED INTERIM STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS

(Expressed in Canadian dollars – Unaudited)

Three months ended

March 31,

Three months ended

March 31,

2015

2014

REVENUE

Rental income

$ 1,159,273

$ 1,365,346

EXPENSES

Consulting fees

202,451

127,241

Depreciation

176,057

144,294

Equipment maintenance and rental

138,479

50,042

Fuel and sundry direct operating costs

368,850

587,067

Occupancy costs

90,159

44,102

Office and sundry

141,844

49,309

Professional fees

80,571

67,014

Royalties

108,056

217,083

Salaries and wages

535,074

362,161

Share based compensation

8,433

33,189

Travel, marketing and conferences

38,764

33,167

Allowance for doubtful debts

347,181

–

Foreign exchange (gain) loss

(147,493)

–

2,088,426

1,714,669

Loss before other items

(929,153)

(349,323)

OTHER ITEMS

Gain (loss) on derivative liability

(14,256)

(814)

Finance expense

(186,713)

(68,132)

(200,969)

(68,946)

Net loss and total comprehensive loss for the period

$ (1,130,122)

$ (418,269)

Basic and diluted loss per common share

(0.01)

(0.00)

Weighted average number of common shares outstanding

123,900,890

109,289,794

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INTERCEPT ENERGY SERVICES INC.

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)

(Expressed in Canadian dollars – Unaudited)

Share Capital Number of shares

Share Capital

Amount

Contributed surplus

Deficit

Total

Balance at December 31, 2013

109,289,794

$ 1,117,213

$ 5,646,571

$ (18,398,509)

$ (1,634,725)

Share based compensation

–

33,189

–

33,189

Net income and comprehensive income for the period

–

(418,269)

Balance at March 31, 2014

109,2,79489

$ 11,117,213

$ 5,679,760

$ (18,816,778)

$ (2,019,805)

Balance at December 31, 2014

122,859,794

$ 11,554,885

$ 6,078,559

$ (17,340,514)

$ 292,930

Private placement

20,000,000

1,000,000

–

1,000,000

Warrants

–

(360,000)

360,000

–

Share issue costs

–

(50,000)

–

(50,000)

Share based compensation

–

8,433

–

8,433

Net income and comprehensive income for the period

–

(1,130,122)

Balance at March 31, 2015

142,859,794

$ 12,144,885

$ 6,446,992

$ (18,470,636)

$ 121,241

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INTERCEPT ENERGY SERVICES INC.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars – Unaudited)

Three months ended

March 31, 2015

March 31, 2014

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) and comprehensive income (loss)

$ (1,130,122)

$ (418,269)

Add back (deduct) items not involving cash

Accretion

6,017

9,857

Depreciation

176,057

144,294

Non cash portion of (gain) loss on derivative liability

14,256

(814)

Share based compensation

8,433

33,189

(925,359)

(231,743)

Changes in non-cash working capital items:

Trade and other receivables

802,532

(543,263)

Prepaids and deposits

8,361

(8,341)

Inventory

–

(11,816)

Trade and other payables

565,940

800,425

1,376,833

237,005

Net cash from (used) in operating activities

451,474

5,262

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of equipment

–

(18,882)

Net generated (used) in investing activities

–

(18,882)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of shares

1,000,000

–

Share issue costs

(50,000)

–

Loans and borrowings

28,111

247,565

Loans and borrowings repayments

–

(2,571)

Derivative liability

(4,119)

(9,490)

Finance leases

(76,992)

(172,232)

Net cash generated (used) from financing activities

897,000

63,272

Net increase (decrease) in cash for the period

1,348,474

49,652

Cash, beginning of period

109,577

8,845

Cash, beginning of period

$ 1,458,051

$ 58,497

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About Intercept Energy Services Inc. (“IES”)

Intercept Energy Services Inc. employs innovative and proprietary technology to provide the highest efficiency heated water, used by oil and gas exploration and production companies; in the fracturing process in Canada and the United States. Through the utilization of HE Heaters(TM), IES is able to reduce fuel consumption and emissions, enhances safety and productivity, enable extreme cold weather operations with significantly lower operating costs that result in a direct competitive advantage for its customers. For more information, visit http://Intercept ES.com

IES is based in Edmonton, Alberta, Canada.

For more information, visit the IES website: www.InterceptES.com

Contacts:

Mr. Keith Morlock Mr. Swapan Kakumanu
President & Chief Operating Officer Chief Financial Officer
1.877.975.0558 1.877.975.0558
kmorlock@Interceptes.com skakumanu@Interceptes.com

Media:

Ms. Julie Shepherd
Accentuate PR
1.973.331.9063
julie@accentuatepr.com

Neither the 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 the accuracy of this release.

Forward-looking statements

Certain information regarding IES in this news release, including management’s assessment of its future development plans and access to various external sources of capital, may constitute forward looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with heating technology and oilfield services operations, general risks associated with oil and gas exploration, development, production, marketing and disposal of waste, loss of markets, environmental risks, competition from other service providers, delays resulting from inability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward–looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect IES’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward–looking statements or information contained in this news release are made as of the date hereof and IES does not undertake any obligation to update publicly or revise any forward–looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE: Intercept Energy Services Inc.

ReleaseID: 429256

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