petrowest energy services trust announces $94.2 million of ... - BMIR

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OUTLOOKPetrowest believes it will exit the year on an upward trend and with a strong balance sheet. The projected2007 exit Debt to EBITDA ratio target is 1.37 times or less and the projected annual average distributionto EBITDA ratio is 85% or less.The Petrowest 2007 projections are based on the following facts and assumptions:• The projected accretiveness of the pending acquisitions.• Larger regional footprint in northern Alberta and British Columbia.• The current positive working capital balance of $25.0 million.• Current long term debt of $25.8 mm versus line of credit of $60 million.• Minimal growth capital required to the end of 2007.• Improving natural gas prices and continued strong oil price.• Clients expressing confidence in a more active second half based on expanded budgets.• Implementation of a DRIP program.• A participation rate (averaging 75% take up) by the active founding vendors in the new DRIPprogram.Management and the Board of Directors of Petrowest recognize that the exit numbers at the end of 2007are sustainable only in the short term. Long term distribution payout ratios at or less than 75% and debtto EBITDA ratios of less than 1:1 are still the primary objectives for sustainable operations and long termstable growth of the Trust.Based on the above facts and assumptions, and recognizing the long term primary objectives of theTrust, Management and the Board of Directors have elected to maintain distributions at the current level.However, changes to circumstances, indications of a prolonged downturn in energy activity, or currentunforeseen circumstances including the failure of the base business operations or the new acquisitions toperform as expected could result in the necessity for future distribution cuts to ensure satisfactory yearend exit numbers and that the Trust will exit the year end on an upward trend.Petrowest is an unincorporated, open-ended, limited purpose, mutual fund trust established under thelaws of Alberta. Petrowest is positioned to be a leading provider of pre-drilling and post-completionenergy services to the northern region of the western Canadian sedimentary basin.The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this newsrelease.For further information, please contact Kenneth N. Drysdale, President and Chief Executive Officer, orJohn B. Paul, Chief Financial Officer, at (780) 830-0881 or info@petro-west.com.MANAGEMENT’S DISCUSSION AND ANALYSISThe following Management’s Discussion and Analysis (MD&A) is dated May 9, 2007. The MD&A shouldbe read in conjunction with Petrowest Energy Services Trust’s (“Petrowest” or the “Trust”) unauditedinterim consolidated financial statements as at and for the three months ended March 31, 2007, as wellas the MD&A’s of the “Acquired Companies” contained in the Trust’s prospectus dated August 28, 2006,the MD&A for the December 31, 2006 year end, and the Trust’s audited consolidated financial statements- 4 -
for the period ended December 31, 2006. The Trust was formed on July 6, 2006, and commenced tradingon the TSX on September 7, 2006. This date should be viewed as the effective start of commercialoperations. Revenue and expense analysis focuses primarily on the changes in the first quarter of 2007.FINANCIAL HIGHLIGHTSFor the three months$000’s except per unit amounts, margins and ratiosendedMarch 31, 2007Financial ResultsRevenue 32,863EBITDA 5,826EBITDA margin 17.7%Net earnings(loss) (2,225)Total assets 281,080Total liabilities 41,152Unitholders’ equity 239,928Financial Position and LiquidityWorking capital 24,973Working capital ratio 2.42:1Total revolving bank term loan and obligationsunder capital leases ( including current portion) 25,846Weighted average number of units outstanding – basic and diluted 28,275,094Distributions per unit $0.30Payout ratio 153%Net earnings(loss) per unit – basic and diluted ($0.08)Unit price – March 31, 2007 $7.09- 5 -
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Page 3: STRATEGIC ALLIANCEPetrowest has ent
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petrowest energy services trust announces $94.2 million of ... - BMIR

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