Making sense of Aqua Terra’s Canadian IPO filing

Published October 12th, 2017

Oilfield services provider Aqua Terra has filed for an initial public offering in Canada, to raise funds both to reduce its debt burden, and to fuel organic and acquisitive growth.

The company, which generated adjusted EBITDA of Can$3.2 million (US$2.6 million) on revenues of Can$30.3 million (US$25.5 million) in 2016, is looking to take advantage of a recovery in activity in the land-based oil and natural gas market in North America, where it provides water disposal services to onshore E&P companies.

Although Aqua Terra generated negative cashflow from operations last year, a rise in produced water and flowback volumes across its geographically diverse portfolio of greenfield and brownfield disposal assets should enable it to reverse that trend.

Risks for prospective investors include a Can$35 million debt pile, a copyright dispute over the company’s name, and the fact that more than 50% of its revenue comes from just ten key customers.