For the three-month period ended July 31, 2010, the Company had a net profit of $260,982 versus a loss of $115,525 for the corresponding period last year. The year over year difference in the quarterly results is largely reflected in New West Drilling working on a large SAGD contract for the full quarter versus working on the same contract for only a portion of the first quarter in 2009. New West Drilling’s net profit for the quarter was $438,860 offset by the net loss of Bearstone of $121,370 and New West Energy Services of $56,508. Bearstone’s loss for a start up period of two months operation included development of the new waste tracking system.
New West’s wholly owned subsidiary, New West Drilling Fluids Inc, has developed several water based drilling fluid systems that form the core of the company’s products. One of the systems is patented and all of the others are proprietary. The patented system named BITUDRIL has proven to be very effective and has been the product of choice for three major oil companies in the development of their steam assisted gravity drainage ("SAGD") oil sands projects. Bitudril is expected to form a major part of New West’s revenue base.
New West is currently very active in establishing and solidifying connections with several of the approximate 20 oil companies that maintain leases in the oilsands. Several delayed oilsands projects have been taken off the back burner and moved forward due largely to the stabilized price of oil in the mid $70 US/barrel range.
Nwe West was awarded a steam assisted gravity drainage ("SAGD") multi-well oilsands drilling fluids operation (the "Project") for a major exploration and production oil company, scheduled to commence in January of 2011.
The Project consists of 98 SAGD injector and producer wells (49 each) scheduled to be completed over a 24 month span, commencing in January of 2011 and generating projected total revenue of approximately $6 million. The Corporation is scheduled to commence, in November 2010, a second SAGD project with another major international oil and gas company that will consist of approximately 108 wells. Anticipated revenues from this project are approximately $6-7 million.
New West also started up Bearstone, a new wholly owned environmental oilfield services company in June 2010. The company provides drilling waste management and other related environmental services to oil and gas companies throughout Western Canada.
Bearstone forecasts sales of $4.9 million for the remaining 9 months that are projected to provide a net after tax profit of 7% to 8% of sales.