Oilfield services firms in tough

One-time, non-cash charges pushed IROC Energy Services Corp. (TSXV:ISC) to a $9.3 million loss, or 21 cents per share, from continuing operations for the quarter ended Sept. 30.

One-time, non-cash charges pushed IROC Energy Services Corp. (TSXV:ISC) to a $9.3 million loss, or 21 cents per share, from continuing operations for the quarter ended Sept. 30.

Those results compare with a net profit of $2 million, or five cents a share, for the same period in 2008.

The oilfield services company, which has its headquarters in Red Deer, reported on Monday that it had revenues of $10.2 million in the quarter, down from $18.6 million a year ago.

The company said in a release that it recorded an impairment in goodwill equal to $6.8 million for the quarter, as well as an impairment in notes receivable of $1.5 million.

The first related to IROC’s Technology Services segment exceeding fair value, and the other to management’s assessment that the value of notes receivable has been impacted by the economic downturn.

“Results in all our divisions are lower on a year-to-date basis to the end of Sept. 30, 2009, compared to the previous year as a result of the significant reduction in demand for services brought about by the low commodity price environment, the rising Canadian dollar, and the ongoing royalty structure issues in Alberta,” said the company.

It added, however, that its management believes the impact of the global economic crisis on the oil and gas industry has bottom out.

IROC provides a range of products, services and equipment to the oil and gas industry, including well-servicing and equipment, downhole temperature and pressure monitoring tools, and rental services.

Meanwhile, Central Alberta Well Services Corp. (TSXV: CWC), which has its operational head office in Red Deer, announced its third-quarter results last week.

These included revenues of $10.3 million and a new loss of $5.2 million for the three months ended Sept. 30. These figures were down from the corresponding quarter in 2008, when revenues were $23 million and earnings $960,000.

A release by Central Alberta Well Services echoed IROC’s assessment that activity should increase in 2010.

Central Alberta Well Services provides oilfield services, including well servicing, coil tubing, snubbing, nitrogen, well testing and oilfield equipment rentals.

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