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DVT Divestco Inc.

0.01
0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type
Divestco Inc. TSXV:DVT TSX Venture Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.01 0.01 0.015 0 01:00:00

Divestco Reports Q3 2011 Results

29/11/2011 12:17am

Marketwired Canada


Divestco Inc. ("Divestco" or the "Company")(TSX VENTURE:DVT) announces its
operating results for the three and nine months ended September 30, 2011.


Accounting Policy Changes

On January 1, 2011, Divestco adopted International Financial Reporting Standards
("IFRS") for purposes of financial reporting, using a transition date of January
1, 2010. Accordingly, the Company's condensed consolidated interim financial
statements for the three and nine months ended September 30, 2011 and the
comparative information for the three months and nine months ended September 30,
2010, have been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as issued by the International Accounting
Standards Board ("IASB"). Previously, the Company prepared its interim and
annual consolidated financial statements in accordance with Canadian generally
accepted accounting principles ("previous GAAP"). The adoption of IFRS has not
had an impact on the Company's operations and strategic decisions.


Results for the Three Months Ended September 30, 2011

Divestco realized net income for the third quarter of 2011 of $255,000 ($nil per
share - basic and diluted) compared to a net loss of $49.7 million ($1.18 per
share - basic and diluted) for the same period in 2010. Excluding an accounting
loss of $40.9 million related to the sale of the Company's seismic data assets
in Q3 2010, the increase was mainly due to a reduction in operating expenses of
$9.5 million (55%).


During Q3 2011, Divestco generated revenue of $9.6 million compared to $8.5
million in Q3 2010, an increase of $1.1 million (12%). EBITDA was $1.7 million
in Q3 2011, a $10.5 million increase from a loss of $8.8 million for the same
period in 2010. The Company generated funds from operations of $1.6 million
($0.03 per share - basic and diluted) for the third quarter of 2011, compared to
negative funds from operations of $6.3 million ($0.15 per share - basic and
diluted) for the same period in 2010, an increase of 7.9 million.


Results for the Nine Months Ended September 30, 2011

Divestco realized a net loss for the first nine months of 2011 of $3.8 million
($0.06 per share - basic and diluted) compared to a net loss of $58.5 million
($1.39 per share - basic and diluted) for the same period in 2010. Excluding an
accounting loss of $40.9 million related to the sale of the Company's seismic
data assets in Q3 2010, the improvement from 2010 was primarily due to the
following:


- Decrease in general and administrative expenses of $3.5 million (23%) mainly
due to a large bad debt expense incurred in 2010 and not repeated in 2011


- Sublease loss provision of $2.1 million incurred in 2010

- Reduction in salaries by $1.7 million (11%)

- Reduction in finance costs of $1.8 million (78%), primarily resulting from
lower interest on long-term debt


- Decrease in depreciation and amortization by $18.8 million (76%) 

During the first nine months of 2011, Divestco generated revenue of $29 million,
a decrease of $2.2 million (7%) from $31.2 million for the same period in 2010.
EBITDA was $2.8 million, a $5.6 million increase from a loss of $2.8 million for
the same period in 2010. The Company generated funds from operations of $2.8
million ($0.05 per share - basic and diluted) for the nine months ended
September 30, 2011, compared a negative $1.9 million ($0.05 per share - basic
and diluted) for the same period in 2010, an increase of 4.7 million.


Late in 2010, Divestco commenced rebuilding its seismic data library by
initiating a 71 square kilometer 3D seismic survey which was completed in early
2011. The Company also obtained the trading rights to an existing 3D survey
covering an adjacent area of 66 square kilometers in Q1 2011 through a data
exchange. In Q2 2011, the Company commenced a 3D survey in central Alberta which
was completed in October 2011 and covers an area of approximately 200 square
kilometers. In Q3 2011, Divestco commenced a small 3D survey and completed it in
October 2011.


Mr. Stephen Popadynetz, CEO, President and CFO: "We are continuing to positively
restructure our Company and as a result, we have incurred several one time
expenses which will not impact the Company going forward. Despite these charges,
Divestco had a profitable quarter and continues to improve on its cash flow. Our
results will continue to reflect the changes we have made and we are
anticipating improved results going forward. We are well on track to sustained
profitability and positive earnings and we look forward to delivering better
results as the year progresses for our shareholders."


Non-GAAP Measures

The Company's interim condensed consolidated financial statements have been
prepared in accordance with IFRS. Certain measures in this document do not have
any standardized meaning as prescribed by IFRS and are considered non-GAAP
measures.


Divestco uses EBITDA and operating income as key measures to evaluate the
performance of segments, divisions and the Company, with the closest GAAP
measure being net income. EBITDA and operating income are measures commonly
reported and widely used by investors as indicators of the Company's operating
performance and ability to incur and service debt, and as a valuation metric.
The Company believes EBITDA and operating income assist investors in comparing
the Company's performance on a consistent basis without regard to financing
decisions, and depreciation and amortization, which are non-cash in nature and
can vary significantly depending upon accounting methods or non-operating
factors such as historical cost.


EBITDA and operating income are not calculations based on IFRS and should not be
considered alternatives to net income in measuring the Company's performance;
nor should they be used as exclusive measures of cash flow, because they do not
consider the impact of working capital growth, capital expenditures, debt
principal reductions and other sources and uses of cash, which are disclosed in
the consolidated statement of cash flows. Investors should carefully consider
the specific items included in Divestco's computation of EBITDA and operating
income. While EBITDA and operating income have been disclosed herein to permit a
more complete comparative analysis of the Company's operating performance and
debt servicing ability relative to other companies, investors should be
cautioned that EBITDA and operating income as reported by Divestco may not be
comparable in all instances to EBITDA and operating income as reported by other
companies.


EBITDA is calculated as follows:



                                   Three Months Ended     Nine Months Ended 
                                         September 30          September 30 
----------------------------------------------------------------------------
(Thousands)                           2011       2010       2011       2010 
----------------------------------------------------------------------------
                                                                            
Net Income (Loss)                   $  255   $(49,685)  $ (3,842)  $(58,457)
Income Tax Expense (Benefit)            (4)    (9,611)        61    (12,920)
Other Loss (Income)                    (29)    41,500        (27)    41,406 
----------------------------------------------------------------------------
Operating Income (Loss)             $  222   $(17,796)  $ (3,808)  $(29,971)
Finance costs                          303      1,233        507      2,325 
Depreciation and Amortization        1,167      7,753      6,081     24,847 
----------------------------------------------------------------------------
EBITDA                               1,692     (8,810)     2,780     (2,799)
----------------------------------------------------------------------------



Divestco reports funds from operations because it is a key measure used by
management to evaluate its performance and to assess the ability of the Company
to finance operating activities and capital expenditures. Funds from operations
excludes certain working capital changes and other sources and uses of cash,
which are disclosed in the consolidated statement of cash flows.


Funds from operations is not a calculation based on IFRS and should not be
considered an alternative to the consolidated statement of cash flows. Funds
from operations is a measure that can be used to gauge Divestco's capacity to
generate discretionary cash flow. Investors should be cautioned that funds from
operations as reported by Divestco may not be comparable in all instances to
funds from operations as reported by other companies. While the closest GAAP
measure is cash flows from operating activities, funds from operations is
considered relevant because it provides an indication of how much cash generated
by operations is available before proceeds from divested assets and changes in
certain working capital items.


Funds from operations is calculated as follows:



                                                          Nine Months Ended 
                                                               September 30 
----------------------------------------------------------------------------
(Thousands)                                                2011        2010 
----------------------------------------------------------------------------
                                                                            
Cash Flows from Operating Activities                   $  5,090    $ 11,625 
Changes in Non-Cash Working Capital Balances Related                        
 to Operating Activities                                 (2,292)    (14,759)
Changes in Long-term Prepaid Expense                          -        (238)
Interest Paid                                               391       1,698 
Income Taxes Refunded                                      (352)       (260)
----------------------------------------------------------------------------
Funds from (used in) Operations                        $  2,837    $ (1,934)
----------------------------------------------------------------------------



Financial Highlights



(Thousands, except per share                                                
 amounts)                                   Three Months Ended September 30 
----------------------------------------------------------------------------
                                      2011       2010    $ Change  % Change 
----------------------------------------------------------------------------
                                                                            
Revenue                            $ 9,565   $  8,516   $   1,049        12%
                                                                            
Operating Expenses                   7,873     17,326      (9,453)      -55%
----------------------------------------------------------------------------
                                                                            
EBITDA                               1,692     (8,810)     10,502      -119%
                                                                            
Finance Costs                          303      1,233        (930)      -75%
                                                                            
Depreciation and Amortization        1,167      7,753      (6,586)      -85%
----------------------------------------------------------------------------
                                                                            
Operating Income (Loss)                222    (17,796)     18,018      -101%
                                                                            
Other Loss (Income)                    (29)    41,500     (41,529)     -100%
                                                                            
Income Tax Expense (Benefit)            (4)    (9,611)      9,607      -100%
----------------------------------------------------------------------------
                                                                            
Net Income (Loss)                  $   255   $(49,685)  $  49,940      -101%
 Per Share - Basic and Diluted           -      (1.18)       1.18      -100%
----------------------------------------------------------------------------
                                                                            
Funds from (used in) Operations    $ 1,639   $ (6,294)  $   7,933      -126%
 Per Share - Basic and Diluted        0.03      (0.15)       0.18      -120%
----------------------------------------------------------------------------
                                                                            
Shares Outstanding                  59,903     41,958      17,945        43%
                                                                            
Weighted Average Shares                                                     
 Outstanding                                                                
 Basic                              59,785     41,971      17,814        42%
 Diluted                            59,785     41,971      17,814        42%
----------------------------------------------------------------------------

(Thousands, except per share                                                
 amounts)                                    Nine Months Ended September 30 
----------------------------------------------------------------------------
                                      2011       2010    $ Change  % Change 
----------------------------------------------------------------------------
                                                                            
Revenue                            $29,017   $ 31,241   $  (2,224)       -7%
                                                                            
Operating Expenses                  26,237     34,040      (7,803)      -23%
----------------------------------------------------------------------------
                                                                            
EBITDA                               2,780     (2,799)      5,579      -199%
                                                                            
Finance Costs                          507      2,325      (1,818)      -78%
                                                                            
Depreciation and Amortization        6,081     24,847     (18,766)      -76%
----------------------------------------------------------------------------
                                                                            
Operating Income (Loss)             (3,808)   (29,971)     26,163       -87%
                                                                            
Other Loss (Income)                    (27)    41,406     (41,433)     -100%
                                                                            
Income Tax Expense (Benefit)            61    (12,920)     12,981      -100%
----------------------------------------------------------------------------
                                                                            
Net Income (Loss)                  $(3,842)  $(58,457)  $  54,615       -93%
 Per Share - Basic and Diluted       (0.06)     (1.39)       1.33       -96%
----------------------------------------------------------------------------
                                                                            
Funds from (used in) Operations    $ 2,837   $ (1,934)  $   4,771      -247%
 Per Share - Basic and Diluted        0.05      (0.05)       0.10      -200%
----------------------------------------------------------------------------
                                                                            
Shares Outstanding                  59,903     41,958      17,945        43%
                                                                            
Weighted Average Shares                                                     
 Outstanding                                                                
 Basic                              59,535     41,962      17,573        42%
 Diluted                            59,535     41,962      17,573        42%
----------------------------------------------------------------------------



Segment Review Summary



For the three months ended September 30, 2011 Thousands)                    
----------------------------------------------------------------------------
                        Software              Seismic  Corporate            
                        and Data  Services       Data    & Other      Total 
----------------------------------------------------------------------------
Revenue                  $ 2,309   $ 3,464   $  3,792   $      -   $  9,565 
EBITDA                       966       122      2,942     (2,338)     1,692 
Finance costs                  -        (1)        (1)       305        303 
Depreciation and                                                            
 Amortization                710       241         29        187      1,167 
Operating Income (Loss)      256      (118)     2,914     (2,830)       222 
----------------------------------------------------------------------------
                                                                            
For the three months ended September 30, 2010 (Thousands)                   
----------------------------------------------------------------------------
                                                       Corporate            
                        Software  Services       Data    & Other      Total 
----------------------------------------------------------------------------
Revenue                  $ 2,359   $ 4,319   $  1,838   $      -   $  8,516 
EBITDA                       599       290     (2,416)    (7,283)    (8,810)
Finance costs                  -        (1)         -      1,234      1,233 
Depreciation and                                                            
 Amortization                648       341      6,604        160      7,753 
Impairment of goodwill                                                      
 and intangibles               -         -          -          -          - 
Operating Income (Loss)      (49)      (50)    (9,020)    (8,677)   (17,796)
----------------------------------------------------------------------------
                                                                            
For the nine months ended September 30, 2011 (Thousands)                    
----------------------------------------------------------------------------
                                                       Corporate            
                        Software  Services       Data    & Other      Total 
----------------------------------------------------------------------------
Revenue                  $ 6,848   $13,070   $  9,099   $      -   $ 29,017 
EBITDA                     2,398     2,435      6,685     (8,738)     2,780 
Finance costs                  -        (2)        (5)       514        507 
Depreciation and                                                            
 Amortization              2,747       805      1,001      1,528      6,081 
Operating Income (Loss)     (349)    1,632      5,689    (10,780)    (3,808)
----------------------------------------------------------------------------
                                                                            
For the nine months ended September 30, 2010 (Thousands)                    
----------------------------------------------------------------------------
                                                       Corporate            
                        Software  Services       Data    & Other      Total 
----------------------------------------------------------------------------
Revenue                  $ 7,083   $14,148   $ 10,010   $      -   $ 31,241 
EBITDA                     2,428     2,154      3,897    (11,278)    (2,799)
Finance costs                  -         -          -      2,325      2,325 
Depreciation and                                                            
 Amortization              2,076     1,244     20,894        633     24,847 
Operating Income (Loss)      352       910    (16,997)   (14,236)   (29,971)
----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Interim Statement of Financial Position



As at                                 September 30, 2011  December 31, 2010 
----------------------------------------------------------------------------
(Thousands - Unaudited)                                                     
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
                                                                            
Current Assets                                                              
  Cash                                        $    1,089         $    3,696 
  Funds held in trust                                 16                 15 
  Accounts receivable                             10,744             11,759 
  Prepaid expenses, supplies and                                            
   deposits                                          149                237 
  Income taxes receivable                             50                287 
----------------------------------------------------------------------------
                                                  12,048             15,994 
                                                                            
Investment in affiliated company                     150                100 
Participation surveys in progress                  5,863              1,253 
Property and equipment                             5,619              3,026 
Intangible assets                                 14,589             14,611 
----------------------------------------------------------------------------
                                                                            
                                              $   38,269         $   34,984 
----------------------------------------------------------------------------
                                                                            
Liabilities and Shareholders' Equity                                        
                                                                            
Current Liabilities                                                         
  Bank indebtedness                           $    3,100         $    2,050 
  Accounts payable and accrued                                              
   liabilities                                     7,193              8,248 
  Deferred revenue                                 2,628              2,710 
  Current loss on sublease loss                                             
   provision                                         972              1,729 
  Current portion of long-term debt                                         
   obligations                                     1,446                368 
  Current portion of tenant inducement               149                  - 
----------------------------------------------------------------------------
                                                  15,488             15,105 
                                                                            
Deferred rent obligations                          1,205                  - 
Long-term debt obligations                         3,835                188 
Sublease loss provision                            1,334              1,621 
Tenant Inducements                                 1,845                  - 
Other long-term liabilities                          100                  - 
----------------------------------------------------------------------------
                                                  23,807             16,914 
----------------------------------------------------------------------------
                                                                            
Shareholders' Equity                                                        
  Equity instruments                              75,433             75,253 
  Contributed surplus                              5,644              5,590 
  Deficit                                        (66,615)           (62,773)
----------------------------------------------------------------------------
                                                  14,462             18,070 
----------------------------------------------------------------------------
                                                                            
                                              $   38,269         $   34,984 
----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Interim Statement of Income (Loss) and Comprehensive
Income (Loss)




                                 For the three months   For the nine months 
                                   ended September 30    ended September 30 
----------------------------------------------------------------------------
(Thousands, Except Per Share                                                
 Amounts - Unaudited)                 2011       2010       2011       2010 
----------------------------------------------------------------------------
                                                                            
Revenue                           $  9,565   $  8,516   $ 29,017   $ 31,241 
----------------------------------------------------------------------------
                                                                            
Operating expenses                                                          
 Salaries and benefits               4,231      6,276     14,497     16,224 
 General and administrative          3,588      8,513     11,686     15,159 
 Sublease loss                           -      2,107          -      2,107 
 Stock compensation expense             54        430         54        550 
----------------------------------------------------------------------------
                                     7,873     17,326     26,237     34,040 
----------------------------------------------------------------------------
                                                                            
Finance costs                          303      1,233        507      2,325 
                                                                            
Depreciation and amortization        1,167      7,753      6,081     24,847 
                                                                            
Other loss (income)                    (29)    41,500        (27)    41,406 
----------------------------------------------------------------------------
                                                                            
Loss before income taxes               251    (59,296)    (3,781)   (71,377)
----------------------------------------------------------------------------
                                                                            
Income taxes                                                                
 Current (recovery)                     (4)       (33)        61       (112)
 Deferred (reduction)                    -     (9,578)         -    (12,808)
----------------------------------------------------------------------------
                                        (4)    (9,611)        61    (12,920)
----------------------------------------------------------------------------
                                                                            
Net income (loss) and                                                       
 comprehensive income (loss) for                                            
 the period                            255    (49,685)  $ (3,842)  $(58,457)
----------------------------------------------------------------------------
                                                                            
Net income (loss) per share                                                 
 Basic and Diluted                $      -   $  (1.18)  $  (0.06)  $  (1.39)
                                                                            
Weighted average number of                                                  
 shares                                                                     
 Basic and Diluted                  59,785     41,971     59,535     41,962 



Divestco Inc.

Condensed Consolidated Interim Statement of Changes in Equity



                                                                            
                       Number of          Number of                         
                          Shares    Share  Warrants                  Equity 
(Thousands - Unaudited)   Issued  Capital    Issued   Warrants  Instruments 
----------------------------------------------------------------------------
                                                                            
Balance at January 1,                                                       
 2010                     41,958  $70,518         -  $       -    $  70,518 
                                                                            
Net loss and                                                                
 comprehensive loss for                                                     
 the period                                                                 
                                                                            
                                                                            
Distribution of Pulse                                                       
 shares to Divestco                                                         
 shareholders                                                               
                                                                            
Transactions with                                                           
 owners, recorded in                                                        
 equity contributions                                                       
 by and distributions                                                       
 to owners:                                                                 
 Issue of Class A                                                           
  common shares            1,155      728                               728 
 Reclassification on                                                        
  exercise of stock                                                         
  options                             555                               555 
 Reclassification on                                                        
  repayment of                                                              
  convertible                                                               
  dedentures                                                                
 Share-based payment                                                        
  transactions                                                              
----------------------------------------------------------------------------
                                                                            
Balance at September                                                        
 30, 2010                 43,113  $71,801         -  $       -    $  71,801 
----------------------------------------------------------------------------
                                                                            
Balance at January 1,                                                       
 2011                     58,938  $73,445    15,825  $   1,808    $  75,253 
                                                                            
Net loss and                                                                
 comprehensive loss for                                                     
 the period                                                                 
                                                                            
Transactions with                                                           
 owners, recorded in                                                        
 equity contributions                                                       
 by and distributions                                                       
 to owners:                                                                 
 Issue of Class A                                                           
  common shares              965      129       455         52          181 
 Share-based payment                                                        
  transactions                                                              
 Share issue costs                     (1)                               (1)
----------------------------------------------------------------------------
                                                                            
Balance at September                                                        
 30, 2011                 59,903  $73,573    16,280  $   1,860    $  75,433 
----------------------------------------------------------------------------

                                          Equity                            
                                      portion of     Retained               
                        Contributed  convertible     Earnings               
(Thousands - Unaudited)     Surplus   debentures    (Deficit)  Total Equity 
----------------------------------------------------------------------------
                                                                            
Balance at January 1,                                                       
 2010                    $    5,562      $    56   $   31,411     $ 107,547 
                                                                            
Net loss and                                                                
 comprehensive loss for                                                     
 the period                                           (58,457)      (58,457)
                                                                            
                                                                            
Distribution of Pulse                                                       
 shares to Divestco                                                         
 shareholders                                         (19,999)      (19,999)
                                                                            
Transactions with                                                           
 owners, recorded in                                                        
 equity contributions                                                       
 by and distributions                                                       
 to owners:                                                                 
 Issue of Class A                                                           
  common shares                                                         728 
 Reclassification on                                                        
  exercise of stock                                                         
  options                      (555)                                      - 
 Reclassification on                                                        
  repayment of                                                              
  convertible                                                               
  dedentures                     56          (56)                         - 
 Share-based payment                                                        
  transactions                  550                                     550 
----------------------------------------------------------------------------
                                                                            
Balance at September                                                        
 30, 2010                $    5,613      $     -   $  (47,045)    $  30,369 
----------------------------------------------------------------------------
                                                                            
Balance at January 1,                                                       
 2011                    $    5,590      $     -   $  (62,773)    $  18,070 
                                                                            
Net loss and                                                                
 comprehensive loss for                                                     
 the period                                            (3,842)       (3,842)
                                                                            
Transactions with                                                           
 owners, recorded in                                                        
 equity contributions                                                       
 by and distributions                                                       
 to owners:                                                                 
 Issue of Class A                                                           
  common shares                                                         181 
 Share-based payment                                                        
  transactions                   54                                      54 
 Share issue costs                                                       (1)
----------------------------------------------------------------------------
                                                                            
Balance at September                                                        
 30, 2011                $    5,644      $     -   $  (66,615)    $  14,462 
----------------------------------------------------------------------------



Divestco Inc.

Condensed Consolidated Statement of Cash Flows



For the nine months ended September 30                    2011         2010 
----------------------------------------------------------------------------
(Thousands - Unaudited)                                                     
----------------------------------------------------------------------------
                                                                            
Cash flows from operating activities                                        
Net loss for the period                               $ (3,842)    $(58,457)
Items not affecting cash:                                                   
Equity investment gain                                     (21)         (15)
Depreciation and amortization                            6,081       24,847 
Sublease loss                                             (607)       2,107 
Amortization of tenant inducements                        (113)           - 
Deferred rent obligations                                  638            - 
Income taxes                                                61      (12,920)
Data exchanges                                               -       (1,775)
Loss on sale of data libraries                               -       41,496 
Gain on sale of property and equipment                       -          (90)
Unrealized foreign exchange loss                            (2)          (3)
Non-cash employment benefits                                81            - 
Share based payments                                        54          551 
Finance costs                                              507        2,325 
----------------------------------------------------------------------------
                                                         2,837       (1,934)
Changes in non-cash working capital balances             2,292       14,759 
Changes in long-term prepaid expense                         -          238 
Interest paid                                             (391)      (1,698)
Income taxes refunded                                      352          260 
----------------------------------------------------------------------------
                                                         5,090       11,625 
----------------------------------------------------------------------------
                                                                            
Cash flows from (used in) financing activities                              
Bank indebtedness                                        1,050            - 
Issue of common shares, net of related expenses             99          728 
Repayment of long-term debt obligations                   (321)     (28,691)
Repayment of debentures                                      -       (3,750)
Deferred financing costs                                  (153)         (50)
Proceeds received from long-term debt obligations                           
 (net of committed revolver repayments)                  5,000        1,735 
----------------------------------------------------------------------------
                                                         5,675      (30,028)
----------------------------------------------------------------------------
                                                                            
Cash flows from (used in) investing activities                              
Additions to intangible assets                          (2,465)      (2,196)
Decrease (increase) in participation surveys in                             
 progress                                               (4,610)       2,134 
Purchase of property and equipment                      (5,562)        (699)
Additions to tenant inducements                          3,424            - 
Payment made on sublease loss provision                   (488)           - 
Investments in affiliates                                  (29)           - 
Proceeds on sale of data libraries                           -       54,436 
Proceeds on sale of property and equipment                   -           93 
Deferred development costs                              (1,883)      (2,040)
Changes in non-cash working capital balances            (1,759)     (11,608)
----------------------------------------------------------------------------
                                                       (13,372)      40,120 
----------------------------------------------------------------------------
                                                                            
Increase (decrease) in cash                             (2,607)      21,717 
                                                                            
Cash, beginning of period                                3,696          768 
----------------------------------------------------------------------------
                                                                            
Cash, end of period                                   $  1,089     $ 22,485 
----------------------------------------------------------------------------



Divestco is an exploration services company that provides a comprehensive and
integrated portfolio of data, software, and services to the oil and gas
industry. Through continued commitment to align and bundle products and services
to generate value for customers, Divestco is creating an unparalleled set of
integrated solutions and unique benefits for the marketplace. Divestco's breadth
of data, software and services offers customers the ability to access and
analyze the information required to make business decisions and to optimize
their success in the upstream oil and gas industry. Divestco is headquartered in
Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol
"DVT".


This press release contains forward-looking information related to the Company's
capital expenditures, projected growth, view and outlook towards future oil and
gas prices and market conditions, and demand for its products and services.
Statements that contain words such as "could', "should", "can", "anticipate",
"expect", "believe", "will", "may" and similar expressions and statements
relating to matters that are not historical facts constitute "forward-looking
information" within the meaning applicable by Canadian securities legislation.
Although management of the Company believes that the expectations reflected in
such forward-looking information are reasonable, there can be no assurance that
such expectations will prove to have been correct because, should one or more of
the risks materialize, or should the assumptions underlying forward-looking
statements or forward-looking information prove incorrect, actual results may
vary materially from those described in this press release as intended, planned,
anticipated, believed, estimated or expected. Except where required by law, the
Company does not assume any obligation to update these forward-looking
statements or forward-looking information if conditions or opinions should
change. Readers should not place undue reliance on forward-looking statements or
forward- looking information. All of the forward-looking statements and
forward-looking information of the Company contained in this press release are
expressly qualified, in their entirety, by this cautionary statement.


In particular, this press release contains forward-looking statements pertaining
to the following: the Company's ability to reduce debt, improve liquidity,
correct its working capital deficiency and maintain profitability in the current
economy; availability of external and internal funding for future operations;
relative future competitive position of the Company; nature and timing of
growth; future sales of the Company's seismic data library; oil and natural gas
production levels; planned capital expenditure programs; supply and demand for
oil and natural gas; future demand for products/services; commodity prices;
fluctuations in interest rates; impact of Canadian federal and provincial
governmental regulation on the Company; expected levels of operating costs,
general administrative costs, costs of services and other costs and expenses;
future ability to execute dispositions of assets or businesses; expectations
regarding the Company's ability to raise capital and to add to seismic data
through new seismic shoots and acquisition of existing seismic data; treatment
under tax laws.


These forward-looking statements are based upon assumptions including: that
future prices for crude oil and natural gas, future interest rates and future
availability of debt and equity financing will be at levels and costs that allow
the Company to manage, operate and finance its business and develop its software
products and various oil and gas datasets including its seismic data library,
and meet its future obligations; that the regulatory framework in respect of
royalties, taxes and environmental matters applicable to the Company and its
customers will not become so onerous on both the Company and its customers as to
preclude the Company and its customers from viably managing, operating and
financing its business and the development of its software and data; and that
the Company will continue to be able to identify, attract and employ qualified
staff and obtain the outside expertise as well as specialized and other
equipment it requires to manage, operate and finance its business and develop
its properties.


These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Company's control, including:
general economic, market and business condition; volatility in market prices for
crude oil and natural gas; ability of Divestco's clients to explore for, develop
and produce oil and gas; availability of financing and capital; fluctuations in
interest rates; demand for the Company's product and services; weather and
climate conditions; competitive actions by other companies; availability of
skilled labour; failure to obtain regulatory approvals in a timely manner;
adverse conditions in the debt and equity markets; and government actions
including changes in environment and other regulations.


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1 Year Divestco Inc. Chart

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