Mr. John Babic reports

DALMAC ENERGY REPORTS SECOND QUARTER 2015 FINANCIAL RESULTS

Dalmac Energy Inc. has released its fiscal 2015 second-quarter financial results for the three-month and six-month periods ended Oct. 31, 2014.

Second-quarter financial highlights:

• Revenues of $8.6-million;
• Earnings before interest, taxes, depreciation and amortization, and stock-based compensation increased 67 per cent to $1,432,000 from $857,000;
• Gross margin improved to 30 per cent from 22 per cent;
• Positive net income of $213,000 from $8,000;
• Reduction in general and administrative and wages expenses, increase in amortization.

Revenue in the second quarter was $8.6-million as compared with $9.3-million in the second quarter of the prior year. Regional drilling and completions activity didn't kick into gear for Dalmac until the third month of the second quarter of 2015. Management noted a considerable pickup in servicing activity during the month of October and expects this trend to continue until spring breakup. For the six-month period, revenues were $15.8-million compared with $16.9-million last year.

Gross margin as a percentage of revenue increased to 30 per cent for the quarter and to 26.4 per cent for the year to date. This demonstrates an overall improvement in gross margin by 34 per cent and 63 per cent, respectively, as compared with the same periods in the previous year. This affirms management's strategy toward improving internal controls along with the implementation of the new computerized dispatching and invoicing system. The improvement in the current gross margin coupled with lease restatements resulted in a 67-per-cent EBITDAS gain for the second quarter of 2015 and a 982-per-cent gain for the year to date as compared with the same period in the prior year.

Net income for the quarter was $213,000 as compared with $8,000 in the second quarter of 2014. The net loss for year to date 2015 was $147,000 as compared with a loss of $1.21-million at the same time in the previous year.

                          FINANCIAL HIGHLIGHTS
            (in thousands of dollars except per-share data) 
 
                                             Q2      Q2     YTD     YTD
                                           2015    2014    2015    2014
                                                                    
Revenues                                 $8,611  $9,330 $15,810 $16,944 
Gross margin                              2,542   2,063   4,168   2,737  
Gross margin %                               30%     22%     26%     16%    
General and administrative expenses (1)     442     479     793   1,039  
EBITDAS (loss)                            1,432     857   2,010     186    
EBIDTAS per share -- basic                 0.06    0.04    0.09    0.01   
Interest                                    169     183     339     366    
Amortization                                831     645   1,661   1,364  
Net income (loss)                           213       8    (147) (1,210)
Net income (loss) per share -- basic       0.01   (0.00)  (0.01)  (0.05) 
Net income (loss) per share -- diluted     0.01   (0.00)  (0.01)  (0.05) 

(1) EBITDAS stands for earnings before interest, taxes, depreciation,
    amortization and stock-based compensation.

Dalmac remains optimistic that the remainder of fiscal 2015 will translate into a very profitable year. In spite of the slower start in drilling and completions activity for the first six months of the year, the current activity is showing a significant pickup. Seasonal fluid transfers and well stimulation work orders associated with drilling and completions activity are currently under way. This will also lead to more steady fluid transfer runs from new wells which are coming on-line. The winter drilling season is traditionally the busiest part of Dalmac's operating year. Unless the current softening of oil prices deter the existing drilling and completion programs already in place, management expects that the activity levels for the remainder of fiscal 2015 will be trending at a record pace. Any potential disruptions of drilling and completion activity due to the current volatility of oil prices will be mitigated on Dalmac's part by the fact that the majority of the company's revenue is generated from recurring fluid transfers from existing production wells.

Management feels that the current upswing in oil field activity, coupled with numerous productivity improvements such as the implementation of the new computerized dispatching and invoicing system, should translate to more growth and continued sustainable profitability in the future.

Conference call

A conference call to discuss the results will be held Friday, Nov. 28, 2013, at 1:30 p.m. EST/11:30 a.m. MST. To participate in the conference call, please dial 416-204-9524 local in Toronto or toll-free 1-800-505-9587, and request the Dalmac Energy conference.

We seek Safe Harbor.