After suffering a steep loss in the first quarter of 2016, Essential Energy Solutions Ltd. (TSX:ESN) benefited from resurgence in the oil patch in the 2017 first quarter, delivering a business report on Wednesday that has shares leading TSX-listed stocks.
The Calgary-based company provides oilfield services to oil and natural gas producers primarily in Western Canada, a region that suffered from not only languishing oil prices, but wildfires in the region that crippled output early in 2016. During the first three months of 2017, wells drilled in the Western Canada Sedimentary Basin increased by 112 percent compared to the year earlier period.
In the three months ended March 31, ESN revenue rose to $56.25 million, compared to $26.56 million in the year prior quarter. Gross margin jumped to $14.39 million from only $1.32 million in Q1 2016. After reporting a huge net loss of $42.38 million, or 34 cents per share, in last year's quarter, Essential Energy returned to a net profit of $3.48 million, or 2 cents per share, in the latest quarter.
The company said it saw increased demand for both its Essential Coil Well Service and Tryton segments. The company attributed part of its ability to weather the storm to its low debt and strong balance sheet.
Shares of ESN closed Tuesday at 56 cents, but have surged 28.1% to 73 cents with just over two hours left in the trading day after touching a two-month high at 79 cents earlier in the day.
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