VANCOUVER, British Columbia, Aug. 09, 2017 (GLOBE NEWSWIRE) -- Hanwei Energy Services Corp. (TSX:HE) (“Hanwei” or the “Company”), today reported its financial results for the three months ended June 30, 2017. All amounts are in Canadian Dollars unless otherwise noted.

Hanwei's principal business operations are in two complementary segments of the oil and gas industry as an operator and developer of its own producing and exploratory oil and gas assets in Alberta and Manitoba and as a specialized pipe supplier to the industry, both in Canada and internationally.

• Total Company revenues for the three months ended June 30, 2017 increased to $3.5 million as compared to $1.4 million for the same period of the prior year. This $2.1 million or 150% increase was primarily driven by the Company’s FRP pipe business. 
  
  
• FRP pipe sales for three months ended June 30, 2017 totalled $2.8 million, as compared to $1.0 million for the same period of the prior year. This $1.8 million or 180% increase in revenues was primarily due to shipments for China market orders totalling $2.5 million.  While China market sales for this period were a significant increase over the same period of the prior year, the Company does not expect a material sales rebound in this market in the balance of the year as several projects remain constrained by current low oil and gas prices.
  -- Sales in the Company’s Canada market were $131,000 for the three months ended June 30, 2017 as compared to $543,000 for the prior year. The reduction was due to timing of projects in this market, which the Company anticipates will move forward in the second half of the year.
  
  
• Revenues from the Company’s oil and gas business for three months ended June 30, 2017 totalled $0.8 million as compared to $0.4 million for the same period of the prior year representing a $0.4 million or 100% increase.
  -- The Company produced approximately 224 barrels of oil equivalent per day (boed) with a netback of $18.39 per boe for three months ended June 30, 2017 as compared to 158 boed with a netback of $3.10 per boe for the same period of the prior year.
  -- The increase was due to higher commodity prices during the period with the Company’s oil production mainly from its two Nisku horizontal wells on its Leduc Lands and enhanced stabilized test production at the Company’s new vertical well and horizontal well on its Entice Lands. These two wells at the Entice Lands remain on test production as the Company continues to review its reservoir performance, water cut, and oil and gas production.
  -- Subsequent to the three months ended June 30, 2017 the Company’s oil production on its Leduc Lands was shut in on July 5, 2017. This was due to a lack of available gas handling capacity at the Company’s third party owned and operated gas treatment facility.  The facility operator is in the process of expanding its gas treatment capacity but at this time there is no confirmed date for the completion of this work.  As such the Company is also reviewing alternate gas handling solutions for its Leduc Lands.

• Adjusted EBITDA from continuing operations for the three months ended June 30, 2017 was negative $7,000 as compared to negative Adjusted EBITDA of $410,000 for the same period of the prior year. The improvement in Adjusted EBITDA was contributed by the aforementioned growth in FRP pipe sales as well as  sales and production increases in the oil and gas business. 
  
  
• The Company had a loss from continuing operations of $0.5 million for the three months ended June 30, 2017 as compared to loss from continuing operations of $1.4 million for the same period of the prior year. 
  
  
• As of June 30, 2017 the Company had:
  -- Cash and cash equivalents (inclusive of short term current investments) of $1.0 million representing a decrease of $2.9 million from a March 31, 2017 cash and cash equivalents balance of $3.9 million primarily due to investments in oil and gas assets in Canada and repayment of short-term loans in Harvest;
  -- Net Asset Value per share for the Company’s continuing operations of $0.14 (on 194,201,234 shares outstanding);
  -- A total principal amount of all bank loans of $3.8 million, representing a 24% debt to equity ratio (total bank debt divided by total shareholders' equity) as compared to 32% as at March 31, 2017.

About Hanwei Energy Services Corp.

Hanwei Energy Services Corp.’s principal business operations are in two complementary key segments of the oil and gas industry as both an equipment supplier to the industry (as a leading manufacturer of high pressure, fiberglass reinforced plastic (“FRP”) pipe products and associated technologies serving major energy customers in the global energy market) and as oil and gas producer with properties in Alberta and joint venture interests in Manitoba.

www.hanweienergy.com

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES

Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company’s Annual Information Form dated June 20, 2017 and Management Discussion and Analysis for the year ended March 31, 2017 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com.  The forward-looking information in this press release describes the Company’s expectations as of the date of this press release.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.

For more information, please contact: 
Graham Kwan
Executive Vice President, Strategic Development and Corporate Affairs
604-685-2239
gkwan@hanweienergy.com

Yucai (Rick) Huang
Chief Financial Officer
604-685-2239
yhuang@hanweienergy.com