STEP Energy Services Announces First Quarter Operational and Financial Update – Press Release

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CALGARY, Alberta, April 10, 2023 (GLOBE NEWSWIRE) — STEP Energy Services Ltd. (the “Company” or “STEP”) is providing a first quarter 2023 operational and financial update as well as reporting continued improvement in its balance sheet.

Operational Update

Canada

STEP’s Canadian operations had a robust first quarter 2023 in both fracturing and coiled tubing, leading to its best quarterly revenue performance. Favourable weather conditions and client alignment resulted in solid utilization in both service lines. STEP’s four large fracturing crews operated primarily in the gas and condensate rich areas of the Montney while its smaller low-pressure crew was active in the oil rich Cardium and Viking formations, driving record fracturing revenue for the quarter. The extended cold weather into late March provided a longer operating cycle for STEP’s nine coiled tubing units, with the service line recognizing its best top line performance since the third quarter of 2018. In line with the strong operating performance, Canada is expected to produce strong Adjusted EBITDA for the quarter.

Effective January 1, 2023, STEP started to record fracturing fluid ends as maintenance expense rather than sustaining capital. This change in accounting estimate was made after a detailed analysis of the useful life for these components. Canadian operations is expected to recognize between $2.5-3.0 million for fluid end expense in the first quarter, which includes an approximately $1.0 million expense to reflect the change in useful life.

United States

STEP’s U.S. operations saw mixed results in the first quarter. Coiled tubing continued its trend of sequential quarterly increases, leading to record top line performance, with strong demand from leading public E&Ps across all basins for STEP’s industry leading coiled tubing capabilities. As disclosed in STEP’s 2022 fourth quarter public release, STEP’s U.S. fracturing service line was negatively impacted by shifting client schedules related to…

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