TOT Total Energy Services Inc

Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months and year ended December 31, 2023.

Financial Highlights ($000’s except per share data)

	Three months endedDecember 31								Year endedDecember 31
		2023			2022	Change				2023		2022	Change
Revenue	$	213,758		$	211,479	1	%		$	892,396	$	759,813	17	%
Operating income		23,510			15,605	51	%			84,622		49,343	71	%
EBITDA(1)		45,276			35,872	26	%			168,961		131,320	29	%
Cashflow		44,457			38,590	15	%			163,321		130,795	25	%
Net income (loss)		(7,861	)		12,264	nm				41,594		37,999	9	%
Attributable to shareholders		(7,847	)		12,244	nm				41,625		38,008	10	%
Per Share Data (Diluted)
EBITDA(1)	$	1.11		$	0.84	32	%		$	4.11	$	3.06	34	%
Cashflow	$	1.09		$	0.91	20	%		$	3.97	$	3.04	31	%
Attributable to shareholders:
Net income (loss)	$	(0.19	)	$	0.29	nm			$	1.01	$	0.88	15	%
Common shares (000’s)(4)
Basic		39,975			41,652	(4	%)			40,409		42,216	(4	%)
Diluted		40,623			42,524	(4	%)			41,147		42,980	(4	%)
										December 31		December 31
Financial Position at										2023		2022	Change
Total Assets									$	861,658	$	878,615	(2	%)
Long-Term Debt and Lease Liabilities (excluding current portion)										100,834		127,628	(21	%)
Working Capital(2)										123,439		112,154	10	%
Net Debt(3)										-		15,474	(100	%)
Shareholders’ Equity										530,758		522,023	2	%

Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.

nm – calculation not meaningful

Total Energy’s results for the fourth quarter and year ended December 31, 2023 reflect continued stable industry conditions. North American market share gains resulting from equipment upgrades and modestly improved pricing contributed to improved fourth quarter results in 2023 as compared to 2022. Fourth quarter Australian revenue was lower compared to the prior year due to lower service rig activity. $16.2 million of non-recurring income tax expense and $10.6 million of related interest and penalties were recorded in the fourth quarter of 2023 as a result of a Tax Court of Canada ruling upholding Canada Revenue Agency reassessments related to the Company’s 2009 income trust conversion. Despite the $26.8 million reduction in net income resulting from this reassessment, Total Energy achieved record consolidated financial results for 2023.

Contract Drilling Services (“CDS”)

		Three months endedDecember 31								Year endedDecember 31
		2023			2022		Change			2023			2022		Change
Revenue	$	74,700		$	69,185		8	%	$	287,333		$	252,663		14	%
EBITDA(1)	$	23,880		$	17,976		33	%	$	75,710		$	60,002		26	%
EBITDA(1) as a % of revenue		32	%		26	%	23	%		26	%		24	%	8	%
Operating days(2)		2,588			2,600		-			10,311			10,485		(2	%)
Canada		1,890			1,588		19	%		6,913			6,263		10	%
United States		356			689		(48	%)		2,052			2,734		(25	%)
Australia		342			323		6	%		1,346			1,488		(10	%)
Revenue per operating day(2), dollars	$	28,864		$	26,610		8	%	$	27,867		$	24,098		16	%
Canada		27,162			24,751		10	%		26,076			22,369		17	%
United States		30,483			28,270		8	%		28,700			25,126		14	%
Australia		36,582			32,207		14	%		35,791			29,484		21	%
Utilization		30	%		30	%	-			30	%		30	%	-
Canada		27	%		22	%	23	%		25	%		22	%	14	%
United States		32	%		58	%	(45	%)		47	%		58	%	(19	%)
Australia		74	%		70	%	6	%		74	%		82	%	(10	%)
Rigs, average for period		94			94		-			94			94		-
Canada		77			76		1	%		77			76		1	%
United States		12			13		(8	%)		12			13		(8	%)
Australia		5			5		-			5			5		-

(1)	See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2)	Operating days includes drilling and paid standby days.

CDS segment revenue during the fourth quarter of 2023 was higher compared with the previous year quarter due to increased revenue per operating day arising from the deployment of upgraded equipment. Negatively impacting utilization in the United States was the transfer of a triple drilling rig to Canada during the second quarter of 2023 and a general slowdown in industry activity, which was partially offset by higher pricing due in part to the mix of equipment operating. Higher utilization following the return to service of an upgraded drilling rig combined with higher revenue per operating day due to rate increases arising from rig upgrades and fewer standby days due to wet weather in 2023 compared to 2022 contributed to improved year over year fourth quarter results in Australia.

Rentals and Transportation Services (“RTS”)

		Three months endedDecember 31											Year endedDecember 31
		2023				2022			Change				2023				2022			Change
Revenue	$	19,544			$	20,043			(2	%)		$	84,906			$	66,954			27	%
EBITDA(1)	$	6,927			$	6,171			12	%		$	30,904			$	23,361			32	%
EBITDA(1) as a % of revenue		35	%			31	%		13	%			36	%			35	%		3	%
Revenue per utilized piece of equipment, dollars	$	14,139			$	12,483			13	%		$	55,041			$	44,376			24	%
Pieces of rental equipment		7,700				9,440			(18	%)			7,700				9,440			(18	%)
Canada		6,790				8,540			(20	%)			6,790				8,540			(20	%)
United States		910				900			1	%			910				900			1	%
Rental equipment utilization		18	%			18	%		-				18	%			16	%		13	%
Canada		16	%			16	%		-				16	%			15	%		7	%
United States		33	%			33	%		-				35	%			29	%		21	%
Heavy trucks		67				71			(6	%)			67				71			(6	%)
Canada		46				48			(4	%)			46				48			(4	%)
United States		21				23			(9	%)			21				23			(9	%)

(1)	See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.

Fourth quarter revenue in the RTS segment decreased marginally as compared to the same period in 2022 due to the deferral of certain projects in Canada that was partially offset by market share gains in the United States. Higher year over year fourth quarter EBITDA and EBITDA margin was due to improved revenue per utilized piece of equipment. A significant number of underutilized rental pieces were disposed of in Canada during 2023.

Compression and Process Services (“CPS”)

		Three months endedDecember 31											Year endedDecember 31
		2023				2022			Change				2023				2022			Change
Revenue	$	95,439			$	93,668			2	%		$	417,646			$	331,669			26	%
EBITDA(1)	$	14,074			$	10,771			31	%		$	53,817			$	36,933			46	%
EBITDA(1) as a % of revenue		15	%			11	%		36	%			13	%			11	%		18	%
Horsepower of equipment on rent at period end		39,496				41,243			(4	%)			39,496				41,243			(4	%)
Canada		13,856				18,768			(26	%)			13,856				18,768			(26	%)
United States		25,640				22,475			14	%			25,640				22,475			14	%
Rental equipment utilization during the period (HP)(2)		67	%			75	%		(11	%)			73	%			61	%		20	%
Canada		76	%			66	%		15	%			77	%			47	%		64	%
United States		61	%			84	%		(27	%)			70	%			79	%		(11	%)
Sales backlog at period end, $ million	$	162.8			$	219.5			(26	%)		$	162.8			$	219.5			(26	%)

(1)	See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2)	Rental equipment utilization is measured on a horsepower basis.

The year over year increase in the CPS segment’s fourth quarter revenue was due primarily to higher United States fabrication sales, increased equipment overhaul activity and improved utilization of the Canadian compression rental fleet. EBITDA and EBITDA margin increased due to improved fabrication sales margins and a greater relative revenue contribution from the higher margin parts and service business. The fabrication sales backlog decreased to $162.8 million compared to the $219.5 million backlog at December 31, 2022. Sequentially, the quarter end backlog increased by $9.9 million from September 30, 2023.

Well Servicing (“WS”)

		Three months ended December 31											Year ended December 31
		2023				2022			Change				2023				2022			Change
Revenue	$	24,075			$	28,583			(16	%)		$	102,511			$	108,527			(6	%)
EBITDA (1)	$	3,997			$	6,222			(36	%)		$	19,833			$	23,395			(15	%)
EBITDA (1) as a % of revenue		17	%			22	%		(23	%)			19	%			22	%		(14	%)
Service hours(2)		24,631				29,566			(17	%)			106,551				117,306			(9	%)
Canada		13,293				14,460			(8	%)			52,281				57,123			(8	%)
United States		4,707				5,374			(12	%)			23,488				19,157			23	%
Australia		6,631				9,732			(32	%)			30,782				41,026			(25	%)
Revenue per service hour(2), dollars	$	977			$	967			1	%		$	962			$	925			4	%
Canada		931				960			(3	%)			949				918			3	%
United States		924				955			(3	%)			969				899			8	%
Australia		1,109				983			13	%			980				948			3	%
Utilization(3)		29	%			33	%		(13	%)			31	%			32	%		(3	%)
Canada		26	%			28	%		(7	%)			26	%			27	%		(4	%)
United States		47	%			53	%		(11	%)			59	%			48	%		23	%
Australia		25	%			37	%		(32	%)			29	%			39	%		(26	%)
Rigs, average for period		79				79			-				79				79			-
Canada		56				56			-				56				56			-
United States		11				11			-				11				11			-
Australia		12				12			-				12				12			-

(1)	See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.
(2)	Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby.
(3)	The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.

Fourth quarter Canadian activity in the WS segment was negatively impacted by reduced well abandonment activity following the conclusion of government incentive programs. Segment EBITDA for the fourth quarter decreased as compared to 2022 due to lower activity in all jurisdictions and competitive North American pricing that was partially offset by increased pricing in Australia.

Corporate

During the fourth quarter of 2023, Total Energy remained focused on the safe and efficient operation of its business and the execution of its 2023 capital expenditure program in preparation for the upcoming North American winter drilling season. $75.2 million of capital expenditures were made to December 31, 2023, with $14.2 million of 2023 capital expenditure commitments carried forward into 2024.

Total Energy exited the fourth quarter of 2023 with $123.4 million of positive working capital, including $47.9 million of cash, and $125 million of available credit under its $175 million of revolving bank credit facilities. The weighted average interest rate on the Company’s outstanding debt at December 31, 2023 was 5.25%.

Outlook

Industry conditions remain relatively stable. Oil and natural gas producers continue to be measured in their drilling and completion programs as they pursue acquisition opportunities and execute shareholder return strategies. While recent North American natural gas spot market price weakness may adversely impact near term natural gas drilling activity, the pending completion of several LNG export facilities is expected to provide relief to the North American natural gas market.

Total Energy’s previously announced 2024 preliminary capital expenditure budget of $46.5 million includes $22.4 million of growth capital. Included in 2024 growth capital is the recertification and upgrade of three Australian service rigs that are being reactivated under long term contracts. The first rig was completed and commenced operations in late February and the remaining two rigs are expected to be completed and commence operations during the second and third quarters of 2024, respectively. Included in 2023 capital expenditure commitments carried into 2024 is the completion of an Australian drilling rig that is expected to commence operations in July 2024 under a long term contract as well as several natural gas compression rental units being constructed for deployment in the United States under long term contracts.

Total Energy’s wholly owned subsidiary, Savanna Energy Services Australia Pty Ltd. (“Savanna Australia”) today completed the acquisition of Saxon Energy Services Australia Pty Ltd. (“Saxon”). US $34.8 million cash was paid at closing, with an additional US $2.0 million less any applicable post-closing deductions to be paid on the first anniversary of closing. Concurrent with the acquisition of Saxon, Muhammad Yasir Nisar was appointed Assistant Vice President, Drilling Services of Total Energy.

Dividend Increase

The Board of Directors of Total Energy has declared a dividend of $0.09 per common share for the quarter ended March 31, 2024, a 13% increase from the fourth quarter 2023 dividend. The dividend is payable on April 15, 2024 to shareholders of record at the close of business on March 29, 2024. The ex-dividend date is March 28, 2024. Unless otherwise indicated, all dividends declared by the Company are “eligible dividends” within the meaning of subsection 89(1) of the Income Tax Act (Canada).

Conference Call

At 9:00 a.m. (Mountain Time) on March 8, 2024 Total Energy will conduct a conference call and webcast to discuss its fourth 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 Energy’s website at www.totalenergy.ca by selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (800) 319-4610 or (416) 915-3239. 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 April 8, 2024 by dialing (855) 669-9658 (passcode 0705).

Selected Financial Information

Selected financial information relating to the three months and year ended December 31, 2023 and 2022 is included in this news release. This information should be read in conjunction with the 2023 Consolidated Financial Statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and in the Company’s 2023 Annual Report.

Consolidated Statements of Financial Position(in thousands of Canadian dollars)(audited)

		December 31				December 31
			2023				2022
Assets
Current assets:
Cash and cash equivalents		$	47,935			$	34,061
Accounts receivable			137,604				154,581
Inventory			98,179				91,614
Prepaid expenses and deposits			16,735				18,847
Income taxes receivable			-				496
Current portion of lease asset			-				378
			300,453				299,977
Property, plant and equipment			557,152				567,515
Income taxes receivable			-				7,070
Goodwill			4,053				4,053
		$	861,658			$	878,615
Liabilities & Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities		$	116,794			$	114,274
Deferred revenue			39,321				63,895
Income taxes payable			9,771				-
Dividends payable			3,198				2,490
Current portion of lease liabilities			5,880				5,173
Current portion of long-term debt			2,050				1,991
			177,014				187,823
Long-term debt			90,947				117,997
Lease liabilities			9,887				9,631
Deferred income tax liability			53,052				41,141
Shareholders' equity:
Share capital			251,283				261,109
Contributed surplus			4,805				3,590
Accumulated other comprehensive loss			(25,506	)			(17,032	)
Non-controlling interest			521				552
Retained earnings			299,655				273,804
			530,758				522,023
		$	861,658			$	878,615

Consolidated Statements of Comprehensive Income(in thousands of Canadian dollars except per share amounts)

		Three months endedDecember 31								Year endedDecember 31
			2023				2022				2023				2022
		(unaudited)				(unaudited)				(audited)				(audited)
Revenue		$	213,758			$	211,479			$	892,396			$	759,813
Cost of services			155,976				162,291				678,246				589,809
Selling, general and administration			13,242				11,082				46,828				39,671
Other expense (income)			(92	)			2,115				(300	)			1,035
Share-based compensation			729				351				2,186				1,142
Depreciation			20,393				20,035				80,814				78,813
Operating income			23,510				15,605				84,622				49,343
Gain on sale of property, plant and equipment			1,373				232				3,525				3,164
Finance costs, net			(12,235	)			(2,094	)			(17,425	)			(7,374	)
Net income before income taxes			12,648				13,743				70,722				45,133
Current income tax expense			17,077				1,289				17,217				1,250
Deferred income tax expense			3,432				190				11,911				5,884
Total income tax expense			20,509				1,479				29,128				7,134
Net income (loss)		$	(7,861	)		$	12,264			$	41,594			$	37,999
Net income (loss) attributable to:
Shareholders of the Company		$	(7,847	)		$	12,244			$	41,625			$	30,008
Non-controlling interest			(14	)			20				(31	)			(9	)
Income (loss) per share
Basic		$	(0.20	)		$	0.29			$	1.03			$	0.90
Diluted		$	(0.19	)		$	0.29			$	1.01			$	0.88

Consolidated Statements of Comprehensive Income (Loss)

		Three months endedDecember 31								Year endedDecember 31
			2023				2022				2023				2022
		(unaudited)				(unaudited)				(audited)				(audited)
Net income (loss)		$	(7,861	)		$	12,264			$	41,594			$	37,999
Foreign currency translation			(1,440	)			965				(8,474	)			9,672
Total other comprehensive income (loss) for the period			(1,440	)			965				(8,474	)			9,672
Total comprehensive income (loss)		$	(9,301	)		$	13,229			$	33,120			$	47,671
Total comprehensive income (loss) attributable to:
Shareholders of the Company		$	(9,287	)		$	13,209			$	33,151			$	47,680
Non-controlling interest			(14	)			20				(31	)			(9	)

Consolidated Statements of Cash Flows(in thousands of Canadian dollars)

		Three months endedDecember 31								Year endedDecember 31
			2023				2022				2023				2022
		(unaudited)				(unaudited)				(audited)				(audited)
Cash provided by (used in):
Operations:
Net income (loss) for the period		$	(7,861	)		$	12,264			$	41,594			$	37,999
Add (deduct) items not affecting cash:
Depreciation			20,393				20,035				80,814				78,813
Share-based compensation			729				351				2,186				1,142
Gain on sale of property, plant and equipment			(1,373	)			(232	)			(3,525	)			(3,164	)
Finance costs, net			12,235				2,094				17,425				7,374
Foreign currency translation			(136	)			2,115				(4,420	)			1,035
Current income tax expense			17,077				1,289				17,217				1,250
Deferred income tax expense			3,432				190				11,911				5,884
Income taxes recovered (paid)			(39	)			484				119				462
Cashflow			44,457				38,590				163,321				130,795
Changes in non-cash working capital items:
Accounts receivable			25,373				9,564				16,977				(64,103	)
Inventory			3,285				1,777				(6,565	)			(1,690	)
Prepaid expenses and deposits			7,319				466				2,112				(9,639	)
Accounts payable and accrued liabilities			(15,805	)			(4,543	)			(5,325	)			40,417
Deferred revenue			(14,265	)			8,755				(24,574	)			47,621
Cash provided by operating activities			50,364				54,609				145,946				143,401
Investing:
Purchase of property, plant and equipment			(15,611	)			(14,713	)			(75,242	)			(56,735	)
Proceeds on disposal of property, plant and equipment			5,106				332				11,516				6,292
Changes in non-cash working capital items			(5,599	)			(1,373	)			(3,107	)			8,181
Cash used in investing activities			(16,104	)			(15,754	)			(66,833	)			(42,262	)
Financing:
Repayment of long-term debt			(10,500	)			(28,574	)			(26,991	)			(70,529	)
Repayment of lease liabilities			(1,198	)			(1,359	)			(5,912	)			(4,966	)
Dividends to shareholders			(3,198	)			(2,517	)			(12,142	)			(4,999	)
Repurchase of common shares			-				(4,491	)			(13,587	)			(12,638	)
Shares issued on exercise of share options			-				42				42				158
Interest paid			(1,314	)			(2,198	)			(6,649	)			(7,469	)
Cash used in financing activities			(16,210	)			(39,097	)			(65,239	)			(100,443	)
Change in cash and cash equivalents			18,050				(242	)			13,874				696
Cash and cash equivalents, beginning of period			29,885				34,303				34,061				33,365
Cash and cash equivalents, end of period		$	47,935			$	34,061			$	47,935			$	34,061

Segmented Information

The Company provides a variety of products and services to the energy and other resource industries through five reporting segments, which operate substantially in three geographic regions. These reporting segments are Contract Drilling Services, which includes the contracting of drilling equipment and the provision of labor required to operate the equipment, Rentals and Transportation Services, which includes the rental and transportation of equipment used in energy and other industrial operations, Compression and Process Services, which includes the fabrication, sale, rental and servicing of gas compression and process equipment and Well Servicing, which includes the contracting of service rigs and the provision of labor 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 December 31, 2023 (unaudited, in thousands of Canadian dollars)

	Contract				Rentals and				Compression				Well				Corporate(1)				Total
	Drilling				Transportation				and Process				Servicing
	Services				Services				Services
Revenue	$	74,700			$	19,544			$	95,439			$	24,075			$	-			$	213,758
Cost of services		47,897				10,485				78,813				18,781				-				155,976
Selling, general and administration		3,436				2,260				3,294				1,324				2,928				13,242
Other (income) loss		(85	)			(35	)			113				-				(85	)			(92	)
Share-based compensation		-				-				-				-				729				729
Depreciation		9,668				5,111				2,528				2,853				233				20,393
Operating income (loss)		13,784				1,723				10,691				1,117				(3,805	)			23,510
Gain on sale of property, plant and equipment		428				93				855				27				(30	)			1,373
Finance costs, net		(21	)			(50	)			(110	)			(23	)			(12,031	)			(12,235	)
Net income (loss) before income taxes		14,191				1,766				11,436				1,121				(15,866	)			12,648
Goodwill		-				2,514				1,539				-				-				4,053
Total assets		364,968				169,847				255,055				69,398				2,390				861,658
Total liabilities		64,810				29,502				93,980				6,383				136,225				330,900
Capital expenditures		6,282				1,446				7,669				208				6				15,611

	Canada		United States		Australia		Total
Revenue	$	116,289	$	77,779	$	19,690	$	213,758
Non-current assets(2)		384,448		129,817		46,940		561,205

As at and for the three months ended December 31, 2022 (unaudited, in thousands of Canadian dollars)

	Contract				Rentals and				Compression				Well				Corporate(1)				Total
	Drilling				Transportation				and Process				Servicing
	Services				Services				Services
Revenue	$	69,185			$	20,043			$	93,668			$	28,583			$	-			$	211,479
Cost of services		49,225				12,152				79,703				21,211				-				162,291
Selling, general and administration		2,007				1,912				3,208				1,153				2,802				11,082
Other income		-				-				-				-				2,115				2,115
Share-based compensation		-				-				-				-				351				351
Depreciation		9,138				4,868				2,618				3,165				246				20,035
Operating income (loss)		8,815				1,111				8,139				3,054				(5,514	)			15,605
Gain on sale of property, plant and equipment		23				192				14				3				-				232
Finance costs, net		(9	)			(16	)			(124	)			(9	)			(1,936	)			(2,094	)
Net income (loss) before income taxes		8,829				1,287				8,029				3,048				(7,450	)			13,743
Goodwill		-				2,514				1,539				-				-				4,053
Total assets		346,870				182,095				260,019				83,628				6,003				878,615
Total liabilities		62,545				20,292				122,320				6,003				145,432				356,592
Capital expenditures		6,865				3,490				3,928				400				30				14,713

	Canada		United States		Australia		Total
Revenue	$	89,191	$	97,228	$	25,060	$	211,479
Non-current assets(2)		373,637		146,886		51,045		571,568

(1)	Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2)	Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

As at and for the year ended December 31, 2023 (audited, in thousands of Canadian dollars)

	Contract				Rentals and				Compression				Well				Corporate(1)				Total
	Drilling				Transportation				and Process				Servicing
	Services				Services				Services
Revenue	$	287,333			$	84,906			$	417,646			$	102,511			$	-			$	892,396
Cost of services		201,363				46,210				352,079				78,594				-				678,246
Selling, general and administration		10,988				8,634				13,416				4,448				9,342				46,828
Other income		(65	)			(35	)			25				-				(225	)			(300	)
Share-based compensation		-				-				-				-				2,186				2,186
Depreciation		37,775				19,731				10,350				11,944				1,014				80,814
Operating income (loss)		37,272				10,366				41,776				7,525				(12,317	)			84,622
Gain on sale of property, plant and equipment		663				807				1,691				364				-				3,525
Finance costs, net		(65	)			(113	)			(463	)			(74	)			(16,710	)			(17,425	)
Net income (loss) before income taxes		37,870				11,060				43,004				7,815				(29,027	)			70,722
Goodwill		-				2,514				1,539				-				-				4,053
Total assets		364,968				169,847				255,055				69,398				2,390				861,658
Total liabilities		64,810				29,502				93,980				6,383				136,225				330,900
Capital expenditures		46,810				7,223				14,452				6,516				241				75,242

	Canada		United States		Australia		Total
Revenue	$	419,618	$	381,396	$	91,382	$	892,396
Non-current assets(2)		384,448		129,817		46,940		561,205

As at and for the year ended December 31, 2022 (audited, in thousands of Canadian dollars)

	Contract				Rentals and				Compression				Well				Corporate				Total
	Drilling				Transportation				and Process				Servicing					(1)
	Services				Services				Services
Revenue	$	252,663			$	66,954			$	331,669			$	108,527			$	-			$	759,813
Cost of services		185,579				37,713				286,259				80,258				-				589,809
Selling, general and administration		7,374				6,902				10,071				5,130				10,194				39,671
Other expense		-				-				-				-				1,035				1,035
Share-based compensation		-				-				-				-				1,142				1,142
Depreciation		35,785				19,518				9,725				12,832				953				78,813
Operating income (loss)		23,925				2,821				25,614				10,307				(13,324	)			49,343
Gain on sale of property, plant and equipment		292				1,022				1,594				256				-				3,164
Finance costs, net		(23	)			(75	)			(412	)			(26	)			(6,838	)			(7,374	)
Net income (loss) before income taxes		24,194				3,768				26,796				10,537				(20,162	)			45,133
Goodwill		-				2,514				1,539				-				-				4,053
Total assets		346,870				182,095				260,019				83,628				6,003				878,615
Total liabilities		62,545				20,292				122,320				6,003				145,432				356,592
Capital expenditures		34,835				8,508				9,490				3,792				110				56,735

	Canada		United States		Australia		Total
Revenue	$	371,478	$	263,751	$	124,584	$	759,813
Non-current assets(2)		373,637		146,886		51,045		571,568

(1)	Corporate includes the Company’s corporate activities and obligations pursuant to long-term credit facilities.
(2)	Includes property, plant and equipment, lease asset (excluding current portion) and goodwill.

Total Energy provides contract drilling services, equipment rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The common shares of Total Energy are listed and trade on the TSX under the symbol TOT.

For further information, please contact Daniel Halyk, President & Chief Executive Officer at (403) 216-3921 or Yuliya Gorbach, Vice-President Finance and Chief Financial Officer at (403) 216-3920 or by e-mail at: investorrelations@totalenergy.ca or 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 income (loss) before income taxes plus finance costs plus depreciation. EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income (loss), EBITDA is a 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 income 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 lease liabilities plus current liabilities minus current assets. Management believes this measure provides a useful indication of the Company’s liquidity.
(4)	Basic and diluted shares outstanding reflect the weighted average number of common shares outstanding for the periods. See note 15 to the Company’s 2023 Consolidated Financial Statements.

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, including expectations regarding Total Energy’s future activity levels, market share and compression and process production activity. 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, performance 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.