Questor Technology Announces a 98 Percent Revenue Increase

Questor Technology Inc (TSXV:QST) announced its financial and operating results of 2018. The Calgary based company is in the cleantech space and was founded in 1994.

The company said that the revenue in the first quarter of 2018 was $6 million which is an 98 percent increase from the same period in 2017. The company’s rental revenue increased to $4.3 million from $1.5 million due to higher activity in the United States.

As quoted in the press release:

The Company invested $8.2 million in rental unit expansion since March 31, 2017 resulting in 150% more rental units compared to the first quarter in 2017. The Company continued to realize stong rental utilization during the three months ended March 31, 2018 which was consistent with the same period of 2017.

Gross profit increased by 163 percent as result of higher rental revenue and its impact on revenue mix. Rental revenue mix increased from 50% in 2017 to 72% in 2018, rental revenues carry lower cost of sales which resulted in improved overall margins and gross profit.

The Company invested $2.3 million into the rental fleet for the three months ended March 31, 2018. The new rental equipment has been mobilized to the United States region.

PRESIDENT’S MESSAGE

Questor’s President and Chief Executive Officer, Audrey Mascarehas commented on the financial and operating results for the first quarter of 2018. “We invested $2.3MM this quarter to continue to grow the rental fleet in Colorado to assist our clients in meeting Regulation 7, which mandates enclosed combustion like Questor’s for oilfield operations to deal effectively with emissions. In addition to providing rental units for flow backs, we continue to deliver hybrid units to the Colorado market to solve the emission requirements in the production and operations phase. The hybrid units allow our clients to purchase a base level of capacity and rent additional capacity to meet the shorter term demands of high initial production or limited gas pipeline take away capacity. The benefits to the client are lower capital and operating costs, reduced lease footprint and clean enclosed combustion to meet stringent emission regulations in a capital constrained environment.

Recently, Questor’s Q5000s were independently tested on a client’s site at over 99.99%. The significance of this live test under normal flowing conditions is that clients are now able to increase their permitted VOC destruction from the default 95% to 99%, when they use a Questor incinerator.   This translates directly into an increase in oil production or sufficient operating room within their new air permits. Questor already has new clients benefitting from this performance uplift.

In addition to meeting industry’s requirements for emissions control resulting from drilling, fracturing and production operations, Questor is seeing a significant demand for emissions control for well abandonment operations.  Recent Colorado State regulations require producers to abandon inactive wells prior to being eligible to receive permits for drilling new wells.  Colorado has mandated the use of enclosed combustion for all Plugging and Abandonment (P&A) operations. To address these needs Questor redirected part of the 2018 capital budget to design, built and deploy three new specially designed P&A hydraulic trailer-combustor set-ups this quarter, all of which have been rented.  With continuing demand Questor will add new P&A units which allow clients to set up and demobilize in minutes while being transported from site to site.

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