2014 was a challenging year for the oilfield services industry. The crash in oil prices not only had a negative impact on oil & gas producers but also on oilfield services companies.
Several oil & gas companies have announced a substantial reduction in their capital spending, which will of course hurt oilfield services providers. However, the worst may be over for oilfield services providers.
Many oilfield services companies are also focusing on developing products and services that can help their producer clients in reducing costs. One such company is Calgary-based Questor Technology Inc. (TSX-Venture:QST), an international environmental oilfield services provider focused on clean air technologies. The company is engaged in the design and manufacturing of high combustion efficiency waste gas incinerators for sale or for use on a rental basis and also provides combustion-related oilfield services.
Earlier today, Questor reported its financial results for 2014. In its press release, the company said, "the significant decline in global oil prices over the past eight months has caused its customers to look for opportunities to reduce costs, defer capital spending and refocus on more profitable areas. The solutions that Questor is providing enable our customers to reduce costs, comply with regulations and improve the profitability of their operations."
QST noted that the existing water handling costs are in the order of $9-$20 per barrel of water which causes producers to shut in many wells, specifically at current oil prices. The company’s technology can bring down this cost to $3 per barrel. At a time when oil prices are struggling, such cost savings can be significant.
For the full year ended December 31, 2014, QST reported revenue of $12.41 million, representing an increase of 30% over 2013. The company saw a 10% increase in sale of incinerators. Revenue from rental of incinerators increased 160%. Revenue from incinerator and combustion services rose 89%.
Earnings per share for 2014 were $0.114, compared to $0.101 reported in 2013. The company’s bottom line was boosted by the positive impact of exchange rates.
Audrey Mascarenhas, President and CEO of Questor, said that the heightened global focus on emissions from flaring, climate change and the health concerns arising from the impacts of poor air quality has made it essential for its clients to address these issues in their operations in order to comply with regulations, obtain approval for projects and gain the social license to operate from the community.
