Calgary, Alberta--(Newsfile Corp. - May 27, 2021) - Raise Production Inc. (TSXV: RPC) ("Raise" or the "Company") has released its financial results for the quarter ended March 31, 2021. Selected financial and operational information is outlined below and should be read in conjunction with Raise's financial statements and management's discussion and analysis for the quarter ended March 31, 2021, which are available on SEDAR at www.sedar.com.
HIGHLIGHTS FOR THE QUARTER
- The Company negotiated an exclusive license agreement with Q2 Artificial Lift Services ("Q2 ALS") for the manufacturing, sales and service of the Company's HARPTM and REALTM products.
- The Company continued to implement actions to preserve its cash position while maintaining its ability to effectively service and supply its customers.
- The net loss for quarter ended March 31, 2021 decreased 75% compared to the quarter ended March 31, 2020 and 62% compared to the quarter ended December 31, 2020 primarily as a result of the Company's cost cutting actions.
- Revenue from contracts with customers for the quarter ended March 31, 2021 increased 129% compared to the quarter ended March 31, 2020 and decreased 15% compared to the quarter ended December 31, 2020 primarily as a result of the Company's inventory sales to Q2 ALS beginning in November 2020 and accounting for 77% of all sales over the last two quarters.
PRESIDENT'S UPDATE
The Company is providing an update to its shareholders on its financial results and recent activities related to its operations.
The Company has three systems that can be used independently or in combination in horizontal wellbores:
- the High Angle Reciprocating Pump ("HARPTM");
- the Raise Efficient Artificial Lift ("REALTM") Horizontal Separator
- the Horizontal Artificial Recovery Technology ("HARTTM").
As stated in the Company's last press release dated April 28, 2021, it has entered into an exclusive rights agreement with Q2 ALS for the manufacturing, sales and service of the Company's HARPTM and REALTM products in exchange for a ten-year royalty payment on all Raise products sold as complete components or parts.
Q2 ALS is one of the largest innovators and suppliers of artificial lift equipment in the world with its head office and manufacturing facility in Red Deer, Alberta and 34 service locations throughout North America as well as an international footprint. Q2 ALS will be responsible for all IP legal fees associated with the technology for the term of the royalty agreement. To ensure the transition and continuity of the Raise product lines, certain key employees have been transferred to Q2 ALS including a senior design engineer and senior technical sales and service support engineer.
As stated in previous press releases, the Company has taken significant steps to reduce its overhead and this has included moving premises, shutting down the Company's internal manufacturing operations, terminating eight employees, selling machinery, terminating machinery and vehicle leases, and reducing working hours for the remaining staff resulting in up to 60% salary reductions. The Company has also recently initiated an auction sale of surplus shop equipment which ends on June 2, 2021. All remaining HARPTM and REALTM inventory has now been transferred to Q2 ALS on a pay as used basis.
Raise will continue pursuing alternate corporate strategies including a partner to develop the HARTTM horizontal pumping system while realizing payments from royalties and maintaining a minimum cost structure and will provide additional updates as it proceeds and evaluates potential alternative scenarios.
| RESULTS OF OPERATIONS Statements of Loss and Comprehensive Loss | ||||||
| Three Months ended March 31 | ||||||
| 2021 | 2020 | |||||
| Revenue from contracts with customers | $ | 271,983 | $ | 118,877 | ||
| Cost of sales | 157,347 | 62,183 | ||||
| Gross margin | 114,636 | 56,694 | ||||
| Other income | - | 1,869 | ||||
| Expenses: | ||||||
| General and administration | 149,811 | 437,272 | ||||
| Finance costs | 62,651 | 65,826 | ||||
| Depreciation and amortization | 21,959 | 59,103 | ||||
| Inventory impairment | 16,753 | - | ||||
| Research expenses | 12,006 | 36,982 | ||||
| Stock-based compensation | 5,688 | 65,428 | ||||
| 268,868 | 664,611 | |||||
| Net loss | $ | (154,232 | ) | $ | (606,048 | ) |
| Net loss per share - basic and diluted | $ | 0.00 | $ | (0.01 | ) | |
About Raise Production Inc.
The Company is an innovative oilfield service company that focuses its efforts on the production service sector, utilizing its proprietary products to enhance and increase ultimate production in both conventional and unconventional oil and gas wells.
For further information please contact:
Tom Kehoe, Investor Relations
E-mail: tkehoe@raiseproduction.com
Eric Laing, President and Chief Executive Officer
E-mail: elaing@raiseproduction.com
Susan Scullion, Chief Financial Officer
E-mail: sscullion@raiseproduction.com
Raise Production Inc.
6708 - 30th Street S.E.
Calgary, Alberta T2C 1N9
Tel: (403) 699-7675
Web site at: www.raiseproduction.com
Neither 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 accuracy of this news release.
Certain information included in this press release constitutes forward-looking statements under applicable securities legislation. Forward-looking statements or information typically contain or can be identified by statements that include words such as "anticipate", "assume", "based", "believe", "can", "continue", "depend", "estimate", "expect", "forecast", "if", "intend", "may", "plan", "project", "propose", "result", "upon", "will", "within" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this document include but are not limited to: the Company's business strategy, short and long term objectives, strength and focus; strategic alternatives, including with respect to the HARTTM technology; the use of the company's patented products to enhance and increase production in conventional and unconventional horizontal oil and natural gas wells; the license agreement with Q2 ALS and the impact thereof, including the marketing, sale, distribution, production, manufacturing, assembly, installation, servicing and inventory management of HARPTM and REALTM systems; royalty income resulting from the license agreement with Q2 ALS; sales and marketing activities, including the expansion of such activities to target locations in the USA and Canada; increased visibility in the market; estimates and source of funds of future product development and capital and operating expenditures; estimates in respect of potential maintenance warranty claims related to the commercialization of HARP; capital raising; the availability of credit; the Company's credit risk; continued usage of service providers and contractors, including Q2 ALS; estimates regarding current cash resources and cash flow, project revenue, and its ability to meet strategic objectives into 2021; anticipated sales; profitability expectations; commercialization plans and the timing thereof; the results and timing of product testing; operating and other costs and the effects thereof; the effect of oil and natural gas market conditions on the Company; financial results and the impacts of International Financial Reporting Standards on these statements.
The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to publicly update or revise any of the included forward-looking statements, except as required by applicable Canadian securities law. Forward-looking statements are based upon the current opinions, estimates, projections, assumptions and expectations of management of the Company as at the effective date of such statements and, in some cases, information supplied by third parties. Although the Company believes that 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. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statement will not occur. These risks and uncertainties include but are not limited to: deployment and commercialization of the Company's products, competition in the market, regulatory changes, reliance on third party distributors including Q2 ALS, the risk that the low commodity price environment will be sustained for an indefinite period, the impact of the COVID-19 pandemic and the resulting effects on economic conditions, restrictions imposed by public health authorities or governments, fiscal and monetary responses by governments and financial institutions and disruptions to global supply chains and other general industry, economic, market and business conditions, delays or changes in plans with respect to developing, manufacturing, marketing and distributing and installing the Company's products. Readers are cautioned that the foregoing list of risks, uncertainties and assumptions are not exhaustive. Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this news release and such forward-looking statements should not be interpreted or regarded as guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, investors should review the Company's continuous disclosure filings that are available at www.sedar.com.
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