CALGARY, AB, July 23, 2024 /CNW/ - Western Energy Services Corp. ("Western" or the "Company") (TSX:WRG) announces the release of its second quarter 2024 financial and operating results.  Additional information relating to the Company, including the Company's financial statements and management's discussion and analysis ("MD&A") as at June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 will be available on SEDAR+ at www.sedarplus.ca.  Non-International Financial Reporting Standards ("Non-IFRS") measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, revenue per Operating Day, revenue per Service Hour and Working Capital, as well as abbreviations and definitions for standard industry terms are defined later in this press release.  All amounts are denominated in Canadian dollars (CDN$) unless otherwise identified. Second Quarter 2024 Operating Results: Second quarter revenue of $43.0 million was consistent with the second quarter of 2023.  Contract drilling revenue totalled $27.1 million in the second quarter of 2024, which was $3.5 million (or 11%), lower than $30.6 million in the second quarter of 2023.  Production services revenue was $16.0 million for the three months ended June 30, 2024, an increase of $3.6 million (or 28%) as compared to $12.4 million in the same period of the prior year.  In the second quarter of 2024, revenue in Canada was positively impacted by higher commodity prices, which was offset by lower contract drilling activity in the US, compared to the second quarter of 2023 as described below: In Canada, Operating Days of 656 days in the second quarter of 2024 were 80 days (or 14%) higher compared to 576 days in the second quarter of 2023.  Drilling rig utilization in Canada was 21% in the second quarter of 2024, compared to 19% in the same period of the prior year mainly due to improved crude oil prices and some of the Company's drilling rigs working longer into spring break-up than in 2023.  The Canadian Association of Energy Contractors ("CAOEC") industry Operating Days increased by 8% in the second quarter of 2024, compared to the second quarter of 2023, while the CAOEC industry average utilization increased by five percentage points to 30%1 for the second quarter of 2024, compared to the CAOEC industry average utilization of 25% in the second quarter of 2023.  The increase in the CAOEC industry average utilization is attributable to a 12% decrease in the average number of drilling rigs registered with the CAOEC in the second quarter of 2024 compared to the second quarter of 2023.  If the number of registered drilling rigs with the CAOEC had not decreased, the CAOEC industry average utilization in the second quarter of 2024 would have been approximately 27%, two percentage points higher than the second quarter of 2023.  Revenue per Operating Day averaged $31,765 in the second quarter of 2024, a decrease of 4% compared to the same period of the prior year, mainly due to lower third party revenue; In the United States ("US"), drilling rig utilization averaged 24% in the second quarter of 2024, compared to 37% in the second quarter of 2023, with Operating Days decreasing from 267 days in the second quarter of 2023 to 153 days in the second quarter of 2024 due to lower industry activity.  Average active industry rigs of 6032 in the second quarter of 2024 were 16% lower compared to the second quarter of 2023.  Revenue per Operating Day for the second quarter of 2024 averaged US$30,016, a 6% decrease compared to US$31,896 in the same period of the prior year, mainly due to higher standby revenue in 2023; and In Canada, service rig utilization was 33% in the second quarter of 2024, compared to 23% in the same period of the prior year, as Service Hours increased by 37% to 13,444 hours from 9,844 hours in the same period of the prior year, due to favorable weather resulting in improved activity.  Revenue per Service Hour averaged $1,016 in the second quarter of 2024 and was 3% lower than the second quarter of 2023, due to area specific rig requirements. The Company incurred a net loss of $5.1 million in the second quarter of 2024 ($0.15 net loss per basic common share) as compared to a net loss of $7.8 million in the second quarter of 2023 ($0.23 net loss per basic common share).  The change can mainly be attributed to a $1.2 million increase in Adjusted EBITDA, a $0.9 million decrease in stock based compensation expense and a $0.4 million decrease in finance costs.  Administrative expenses in the second quarter of 2024 were $1.8 million higher than the second quarter of 2023, due to $1.8 million of one-time reorganization costs incurred in 2024. Adjusted EBITDA of $5.3 million in the second quarter of 2024 was $1.2 million (or 27%) higher compared to $4.1 million in the second quarter of 2023.  The increase in Adjusted EBITDA in the second quarter of 2024 was due to higher drilling and production services revenue in Canada, offset partially by $1.8 million of one-time reorganization costs incurred.  Normalizing for the $1.8 million of one-time reorganization costs, Adjusted EBITDA would have totalled $7.1 million for the second quarter of 2024, an increase of 73% from the second quarter of 2023.  Second quarter additions to property and equipment of $5.6 million in 2024 compared to $6.7 million in the second quarter of 2023, consisting of $4.2 million of expansion capital related to rig upgrades and $1.4 million of maintenance capital. Year to Date 2024 Operating Results: Revenue for the six months ended June 30, 2024 decreased by $17.2 million (or 14%), to $105.0 million compared to $122.2 million in the same period of 2023.  Contract drilling revenue totalled $66.8 million for the six months ended June 30, 2024, which was $21.9 million (or 25%), lower than $88.7 million in the same period of the prior year.  Production services revenue totalled $38.4 million for the six months ended June 30, 2024, an increase of $4.6 million (or 14%) as compared to $33.8 million in the same period of the prior year.  In the first half of 2024, revenue was negatively impacted by lower activity in contract drilling in Canada and the US due to lower commodity prices in the first part of 2024, specifically natural gas prices, but positively impacted by higher production services activity in 2024, compared to the first half of 2023 as described below: In Canada, Operating Days of 1,609 days for the six months ended June 30, 2024 were 250 days (or 13%) lower compared to 1,859 days for the six months ended June 30, 2023.  Drilling rig utilization in Canada was 26% for the six months ended June 30, 2024, compared to 30% in the same period of the prior year mainly due to customers cancelling or deferring their programs into the second half of 2024, as a result of lower natural gas prices in 2023 that continued into 2024.  The CAOEC industry Operating Days increased by 2% in the first half of 2024, compared to the first half of 2023, while the CAOEC industry average utilization increased five percentage points to 40%3 for the six months ended June 30, 2024, compared to the CAOEC industry average utilization of 35% in the same period of the prior year.  The increase in the CAOEC industry average utilization is attributable to a 12% decrease in the average number of drilling rigs registered with the CAOEC in the first half of 2024 compared to the first half of 2023.  If the number of registered drilling rigs with the CAOEC had not decreased, the CAOEC industry average utilization for the six months ended June 30, 2024 would have been approximately 36%, one percentage point higher than the six months ended June 30, 2023.  Revenue per Operating Day for the six months ended June 30, 2024 averaged $33,226, which was consistent with the same period of the prior year; In the US, drilling rig utilization averaged 25% for the six months ended June 30, 2024, compared to 41% in the same period of the prior year, with Operating Days decreasing from 594 days in the six months ended June 30, 2023 to 317 days in the same period of 2024 due to lower industry activity.  Average active industry rigs of 6134 for the six months ended June 30, 2024 were 17% lower compared to the six months ended June 30, 2023.  Revenue per Operating Day for the six months ended June 30, 2024 averaged US$30,967, a 5% decrease compared to US$32,515 in the same period of the prior year, mainly due to higher standby revenue in 2023; and In Canada, service rig utilization of 38% for the six months ended June 30, 2024 was higher than 33% in the same period of the prior year with Service Hours increasing by 13% from 28,097 hours in 2023 to 31,843 hours in 2024.  Revenue per Service Hour averaged $1,040 for the six months ended June 30, 2024 and was consistent with the six months ended June 30, 2023. The Company incurred a net loss of $3.7 million for the six months ended June 30, 2024 ($0.11 net loss per basic common share) as compared to a net loss of $3.4 million in the same period in 2023 ($0.10 net loss per basic common share).  The change can mainly be attributed to a $1.3 million decrease in stock based compensation expense, a $0.7 million decrease in finance costs, and a $0.4 million increase in income tax recovery, which were partially offset by a $2.8 million decrease in Adjusted EBITDA.  Administrative expenses for the six months ended June 30, 2024 were $2.4 million higher than the same period of 2023, due to higher employee related costs including one-time reorganization costs of $1.8 million incurred in 2024. Adjusted EBITDA of $20.5 million for the six months ended June 30, 2024 was $2.8 million (or 12%) lower compared to $23.3 million in the same period of 2023 and included one-time reorganization costs of $1.8 million.  After normalizing for the one-time reorganization costs, Adjusted EBITDA for the six months ended June 30, 2024 would have totalled $22.3 million, a decrease of $1.0 million (or 4%) from the same period in the prior year.  Adjusted EBITDA in 2024 was lower due to lower drilling activity in Canada and the US, as well as lower pricing in the US. Year to date 2024 additions to property and equipment of $7.5 million compared to $11.9 million in the same period of 2023, consisting of $4.8 million of expansion capital related to rig upgrades and $2.7 million of maintenance capital. On March 22, 2024, the Company extended the maturity of its $35.0 million syndicated revolving credit facility (the "Revolving Facility") and its $10.0 million committed operating facility (the "Operating Facility" and together the "Credit Facilities") from May 18, 2025 to the earlier of (i) six months prior to the maturity date of the Second Lien Facility (as defined in this press release) which is currently November 18, 2025, or (ii) March 21, 2027 if the Second Lien Facility is extended.  The total commitments under the Credit Facilities are unchanged and there were no changes to the Company's financial covenants, which are described on page 9 of the Company's second quarter 2024 MD&A under "Liquidity and Capital Resources". Selected Financial Information (stated in thousands, except share and per share amounts) Three months ended June 30                    Six months ended June 30 Financial Highlights 2024 2023     Change 2024 2023         Change Revenue 43,033 42,954 - 105,015 122,193 (14 %) Adjusted EBITDA(1) 5,259 4,140 27 % 20,478 23,336 (12 %) Adjusted EBITDA as a percentage of revenue(1) 12 % 10 % 20 % 20 % 19 % 5 % Cash flow from operating activities 19,260 25,373 (24 %) 27,062 31,818 (15 %) Additions to property and equipment 5,635 6,705 (16 %) 7,537 11,870 (37 %) Net loss (5,136) (7,845) 35 % (3,681) (3,424) (8 %)    – basic and diluted net loss per share (0.15) (0.23) 35 % (0.11) (0.10) (10 %) Weighted average number of shares    – basic and diluted 33,843,015 33,841,324 - 33,843,015 33,841,324 - Outstanding common shares as at period end 33,843,015 33,841,324 - 33,843,015 33,841,324 - (1)      See "Non-IFRS Measures and Ratios" included in this press release.                                    Three months ended June 30                                                    Six months ended June 30 Operating Highlights(2) 2024         2023                      Change 2024 2023       Change Contract Drilling Canadian Operations: