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Calgary, Alberta--(Newsfile Corp. - March 22, 2021) - Raise Production Inc. (TSXV: RPC) ("Raise" or the "Company") provides an update on recent activities related to its operations.
The Company's revenue for the year ended December 31, 2020 is down 45% from the prior year and full HARPTM pump sales are down 70% year over year. Over the past year, it was necessary for the Company to complete significant cost reductions, as stated in its previous press releases, and obtain government assistance through the Canada Emergency Wage Subsidy ("CEWS") and Canada Emergency Rent Subsidy ("CERS") in order to maintain a positive cash position. Approximately $342,000 of government assistance for CEWS and CERS has been received to date and the Company's current cash position is approximately $270,000. The Company will continue to rely on this government assistance until the end of the program in June 2021, subject to meeting the eligibility requirements.
The significant cost reductions completed by the Company over the past year consisted of moving premises, shutting down the Company's internal manufacturing operations, terminating 4 employees, selling machinery, early termination of machinery and vehicle leases, and reducing working hours for the remaining 8 staff resulting in up to 40% salary reductions. Additional cost reductions will be necessary to continue to preserve cash until an alternate corporate strategy is determined.
The global impact of COVID-19 as well as the decline in oil prices in Canada and the United States have resulted in significant uncertainty as to the health of the global economy and specifically the oil and gas industry. Decreased activity levels as a result of the unprecedented demand destruction and low commodity price environment associated with the COVID‐19 pandemic have impacted the Company's customers' capital and operating spending budgets, which have resulted in a negative effect on the Company's sales.
The Company continues to evaluate all options available to Raise as a result of the extremely challenging past year and the continued decline in sales volume and the Company's cash position. The Company currently believes its current cash position will be sufficient to satisfy its financial obligations into mid-2021 based on its actual sales to date and additional cost reductions being implemented.
The Board of Directors and Management would like to thank all shareholders for their support and encouragement as the Company continues to navigate through this extraordinary difficult period.
About Raise Production Inc.
The Company is a technologically driven and 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
Eric Laing, President and Chief Executive Officer
Raise Production Inc.
6708, 30th Street SE
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 news release constitutes forward-looking statements under applicable securities legislation. Such statements relate to possible future events, including, but not limited to: the Company's business strategy, objectives, strength and focus; government assistance; strategic alternatives; sales and marketing activities, the Company's cash position; and statements regarding the Company's future cashflow and profitability expectations. All statements other than statements of present or historical fact are forward-looking statements. 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.
The forward-looking statements or information contained in this press release are based on a number of assumptions that may prove to be incorrect. Assumptions have been made regarding, among other things: the ability to obtain financing to provide working capital to fund operations, the availability of credit, the ability to commercialize products and operations and meet projected sales forecasts, the potential to increase recoverable reserves for customers by utilization of the HARPTM, REALTM and HARTTM systems, estimates regarding current and projected cash resources and cash flow anticipated sales; the ability to implement strategic objectives and plans; the ability to adequately protect proprietary information and technology from its competitors; the ability to obtain partnering opportunities; the ability to expand the Company's training and product assembly initiative to target locations; the ability to attract and retain key personnel and key collaborators; the ability to attract new customers and develop and maintain existing customers; the availability of skilled labour, services and equipment, general economic and financial market conditions, the legislative and regulatory environment of the jurisdictions where the Company carries on business and the ability to successfully compete in targeted markets; the Company's expectations regarding the impacts, direct and indirect, of the COVID-19 pandemic on Raise's business, customers, business partners, employees, supply chain, other stakeholders and the overall economy; and the future demand for the Company's services and equipment, in particular, in light of the recent decline in oil prices in Canada and the United States and the COVID-19 pandemic.
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, 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.
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Raise's cash position, profitability, sales, cost reductions, financing activities and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as a set forth in the above paragraph. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Raise's future business operations. Raise disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.
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