CALGARY, ALBERTA--(Marketwired - Dec 12, 2013) - Secure Energy Services Inc. ("Secure" or the "Corporation") (SES.TO) is pleased to announce its 2014 capital budget. The 2014 capital budget is a continuation of the Corporation's strategy to: design, construct and expand facilities in key under-serviced markets in both Canada and the United States; reduce waste, recycle and reuse fluids at Secure facilities; and to provide full cycle environmental and midstream solutions in the energy services market.
The Corporation's Board of Directors has approved an initial 2014 capital budget of $225 million aligned with this strategic focus. Included in the $225 million is $20 million of carry over capital from 2013 projects related to the Edson, Kindersley and Keene full service terminals ("FSTs"). The remaining $205 million of the Corporation's capital budget consists of new facilities, expansions and equipment in strategic growth and expansion areas in both Canada and the United States.
The Corporation expects to invest the $225 million capital budget as follows:
Processing Recovery and Disposal ("PRD") division capital budget of $205 million allocated as follows:
- Growth capital of $155 million consisting of:
- Carryover capital of $20 million relating to the completion of three FST's;
- Construction of the Corporation's first full service rail ("FSR") facility;
- One FST and two stand-alone water disposal ("SWD") facilities;
- Converting two existing SWD's to FST's;
- Construction of one land fill;
- Water and oil recycling initiatives and long lead items;
- Expansion capital of $45 million relating to additional truck unload stations, tanks, treaters, pumps and disposal wells; and
- Sustaining capital of $5 million for normal course maintenance operations.
Drilling Services ("DS") division capital budget of $14 million allocated as follows:
- Growth capital of $14 million consisting of an oil based mud blending plant and rental equipment.
Onsite Services ("OS") division capital budget of $6 million allocated as follows:
- Growth capital of $6 million consisting of heavy duty equipment and specialized tools for ongoing onsite projects.
In conjunction with the recently completed $110 million equity financing, the Corporation has approximately $140 million drawn on its total available revolving credit facility of $400 million, with an available $50 million accordion. The Corporation intends to fund the 2014 capital budget with cash flow from operations and the amount available on the revolving credit facility.
The organic growth and expansion capital detailed above will enhance our competitive positioning and expand our service offerings both in Canada and the US. The Corporation's PRD division is a capital intensive business requiring upfront lead time to obtain the appropriate regulatory approvals, order the necessary long lead items and construct the facilities. Given the approval and construction timelines for these types of facilities, it is expected that the majority of the above capital program for 2014 will not have any cash flow impact until 2015. Achieving the above capital program will present new growth platforms for Secure, its customers and shareholders, consistent with the Corporation's focused strategy of helping its customers with new facilities and services in both under-serviced and capacity constrained markets.
Update on 2013 capital budget
The Corporation is expecting capital expenditures (excluding acquisitions) of approximately $195 million for the year ended December 2013, which is in-line with previously announced budgeted amounts and expectations. This amount includes long leads for the 2014 capital budget.
About Secure Energy Services Inc.
Secure is a TSX publicly traded energy services company that focuses on providing specialized services to upstream oil and natural gas companies.
The Corporation operates three divisions:
Processing, Recovery and Disposal Division: Operating under the name Secure Energy Services Inc., the Processing, Recovery and Disposal Division focuses on clean oil terminalling, custom treating of crude oil, crude oil marketing, produced and waste water disposal, oilfield waste processing, landfill disposal and oil purchase/resale service.
Drilling Services Division: Operating under the name Marquis Alliance Energy Group Inc., the trade name XL Fluid Systems ("XL Fluids") and the trade name Target Rentals ("Target"), the Drilling Services division provides drilling fluid systems and drilling equipment rentals and services. The drilling fluids service line comprises the majority of the revenue for the division which includes the design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas. The Drilling Services division focuses on providing products and systems that are designed for more complex wells, such as medium to deep wells, horizontal wells and horizontal wells drilled into the oil sands.
On Site Division: The On Site division, operating under the name of Frontline Integrated Services, offers integrated water services through frac pond rentals; "CleanSite" waste container services, environmental services which include pre-drilling assessment planning, drilling waste management, remediation and reclamation of former wellsites, facilities, commercial, and industrial properties, and laboratory services; pipeline integrity (inspection, excavation, repair, replacement and rehabilitation); and demolition and decommissioning. These services are offered throughout the WCSB.
Certain statements contained in this document constitute "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as forward-looking statements). When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", and similar expressions, as they relate to Secure, or its management, are intended to identify forward-looking statements. Such statements reflect the current views of Secure with respect to future events and operating performance and speak only as of the date of this document. In particular, this document contains forward-looking statements pertaining to: the amount of the Corporation's 2014 capital budget, the allocation of the 2014 capital budget among the PRD, DS and OS divisions and the intended use thereof.
Forward-looking statements concerning expected operating and economic conditions are based upon prior year results as well as the assumption that increases in market activity and growth will be consistent with industry activity in Canada, United States, and internationally and growth levels in similar phases of previous economic cycles. Forward-looking statements concerning the availability of funding for future operations are based upon the assumption that the sources of funding which the Corporation has relied upon in the past will continue to be available to the Corporation on terms favorable to the Corporation and that future economic and operating conditions will not limit the Corporation's access to debt and equity markets. Forward-looking statements concerning the relative future competitive position of the Corporation are based upon the assumption that economic and operating conditions, including commodity prices, crude oil and natural gas storage levels, interest rates, the regulatory framework regarding oil and natural gas royalties, environmental regulatory matters, the ability of the Corporation and its subsidiaries' to successfully market their services and drilling and production activity in North America will lead to sufficient demand for the Corporation's services and its subsidiaries' services including demand for oilfield services for drilling and completion of oil and natural gas wells, that the current business environment will remain substantially unchanged, and that present and anticipated programs and expansion plans of other organizations operating in the energy service industry will result in increased demand for the Corporation's services and its subsidiary's services. Forward-looking statements concerning the nature and timing of growth are based on past factors affecting the growth of the Corporation, past sources of growth and expectations relating to future economic and operating conditions. Forward-looking statements in respect of the costs anticipated to be associated with the acquisition and maintenance of equipment and property are based upon assumptions that future acquisition and maintenance costs will not significantly increase from past acquisition and maintenance costs.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to those factors referred to and under the heading "Business Risks" and under the heading "Risk Factors" in the Corporation's annual information form ("AIF") for the year ended December 31, 2012. Although forward-looking statements contained in this Press Release are based upon what the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements in this Press Release are expressly qualified by this cautionary statement. Unless otherwise required by law, Secure does not intend, or assume any obligation, to update these forward-looking statements.