March 17, 2008 / 12:32 PM / 10 years ago

Ensign Energy fourth-quarter profit up 13 percent

TORONTO, March 17 (Reuters) - Fourth-quarter profit at Ensign Energy Services Inc (ESI.TO) jumped 13 percent due to a stock-based compensation recovery and a reduced income tax rate, the company said on Monday.

Canada’s No. 2 oilfield-services firm said the “malaise” that began in the country’s oil and gas industry in 2006 will likely continue into 2008, but strong crude oil prices could support its operations in Alberta’s lucrative oil sands.

Income in the quarter through Dec. 31 was C$72.6 million, or 47 Canadian cents per share, up from C$63.9 million, or 41 Canadian cents a share a year earlier.

The company’s profits were boosted by a C$15.1-million compensation recovery, compared with a C$3.4-million expense in the year-earlier period, and a Canadian income tax reduction that amounted to a C$14.2-million decline in future income tax liability balances.

Revenue fell about 8 percent to C$388.3 million, due mostly to slower activity in the company’s Canadian operations.

Looking ahead, Ensign said the combined effect of soft natural gas prices, a strong Canadian dollar, and higher royalties from energy operations in Alberta would hurt the short-term prospects for its industry.

Despite a good start to 2008, the company said it expects “reduced levels of activity within the industry over the next several quarters before the overall business climate in the Canadian oilfield services industry begins to recover.”

$1=$0.99 Canadian Reporting by Jonathan Spicer; Editing by Bernadette Baum

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