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Abstract
IROC Systems Corp is an Alberta based oilfield services company that, through the IROC Energy Services Partnership, supplies a comprehensive and diverse range of products, services and equipment to the oil and gas industry, including: IROC's well servicing division, Eagle Well Servicing, which operates free standing single and double service rigs across Central and Southern Alberta; IROC's drilling division, Mission Drilling, which began operations in the first quarter of 2007 when IROC purchased four drilling rigs rated to depths of approximately 3400 meters; IROC's rental division, Aero Rentals, which offers a wide range of rental equipment to the oil and gas industry in Alberta; IROC's environmental division, Envirocore, which offers lease building and road construction services; IROC's safety division, IROC Safety, which has developed key technologies to address remote air quality monitoring, designed and deployed air breathing systems and provides a complete range of safety services for drilling, completion, production and plant shut-down operations; IROC's communications division, Oricomm, which provides premium communication solutions to a variety of customers in the oil and gas industry; and Canada Tech Corp, which has developed and offers a wide line of memory gauges and permanent monitoring systems that measure pressure and temperature in the downhole and surface environment of oil and gas wells.
IROC's revenue from continuing operations for the year ended December 31, 2006 increased 112% from $29.4 million to $62.3 million year over year. Revenue from continuing operations for the fourth quarter ended December 31, 2006 increased 27%, from $13.5 million to $17.2 million compared to the same period in 2005. The increases in both the three and twelve month periods were achieved by increased equipment capacity from internal growth initiatives, business acquisitions completed in fiscal 2005 and price increases and high utilization of equipment in certain divisions. Improvements in overall operating results reflect the impact of strategic growth plans initiated in fiscal 2005 and that continued through 2006 to expand the services offered by IROC. Significant growth and expansion throughout the past year within the well servicing division, communication and monitoring division, the addition of the downhole tools subsidiary and the establishment of a rental division has resulted in a changing mix of revenues, costs and margins for IROC for fiscal 2006 as compared to fiscal 2005.