Secure Announces Second Quarter 2013 Results and Increases Capital Expenditure Program by $40 Million
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 08/13/13 -- Secure Energy Services Inc. ("Secure" or the "Corporation") (TSX: SES) today announced financial and operational results for the three and six months ended June 30, 2013. The following should be read in conjunction with the management's discussion and analysis ("MD&A"), the condensed consolidated interim financial statements and notes of Secure which are available on SEDAR at .
SECOND QUARTER AND YEAR TO DATE 2013 FINANCIAL AND OPERATIONAL HIGHLIGHTS
Revenue (excluding oil purchase and resale) for the three and six months ended June 30, 2013 increased 24% and 26% compared to the respective prior year periods while earnings before interest, taxes, depreciation and amortization ("EBITDA") improved 3% and 16% for the three and six months ended June 30, 2013 compared to the same periods in 2012. Financial results were influenced by a later spring break-up and by a wet June throughout the Western Canadian Sedimentary Basin ("WCSB") and North Dakota. Canadian industry activity declined quarter over quarter; wells drilled, rig count and meters drilled decreased 15%, 10% and 1% respectively.
Secure completed the acquisition of Frontline Integrated Services Ltd. ("Frontline") on April 1, 2013 and announced the acquisition of Target Rentals Ltd. ("Target") on July 2, 2013. These acquisitions expand the value chain of services the Corporation offers its customers. In addition to the acquisition of Frontline and Target, growth and expansion capital expenditures incurred during the three and six months ended June 30, 2013 totaled $36.2 million and $77.7 million respectively. The Corporation continues to seize market opportunities by executing organic growth initiatives. In order to capitalize on these continued opportunities, the Corporation has increased its capital expenditure program from $155.0 million to $195.0 million. The increased capital program is intended to add new PRD facilities, expand current facilities, develop new technologies for water and oil recycling, purchase long lead items for 2014 capital projects and for business development activities focused on future opportunities.
Highlights for the PRD division included:
Highlights for the DS division included:
Highlights for the OS division included:
INCREASE IN 2013 CAPITAL PROGRAM
Secure's board of directors has approved the addition of $40 million to Secure's 2013 organic capital budget, increasing the budget from approximately $155.0 million to approximately $195.0 million. The 2013 capital expenditure program consists of the following:
PRD division
DS and Onsite divisions
OUTLOOK
Oil and gas industry fundamentals during the second quarter have improved from the fourth quarter of 2012 and the first quarter of 2013. Commodity prices have increased, heavy oil differentials between world and North American pricing have narrowed and oil transportation bottlenecks have been partially relieved. Expectations are that oil and gas producer capital spending will slowly increase over the next few quarters which in turn will improve activity for oil and gas service providers. In additions, several projects that were delayed by the wet spring are expected to be completed in the second half of the year. Despite the less than optimal field conditions in the second quarter, meters drilled in Canada held relatively constant decreasing by only 1% in the second quarter of 2013 compared to the second quarter of 2012. The number of WCSB horizontal wells licensed in the first half of the year increased to 71% of the total wells licensed in 2013; this is a 5 percentage point increase over the first half of 2012. The relative steady number of meters drilled and continued emphasis on horizontal drilling are positive indicators for the Corporation as it is anticipated these factors create demand for the Corporation's products and services. Secure is well positioned to take advantage of the expected industry upswing through its expanded geographic and service offerings.
The acquisition of Frontline this quarter and the recently announced purchase of Target, brings new growth platforms that complement the Corporation's existing PRD and DS divisions. The management teams of Frontline and Target are experienced with proven capabilities to manage growth. The financial strength of Secure will provide the capital necessary to grow the new operations. The Corporation is excited to apply the environmental and integrated water capabilities existing within Secure to the new groups to expand the value chain of services provided to our customers.
Capital expenditures for the six months ended June 30, 2013 of $84.9 million are reflective of the continued execution of the Corporation's strategy. Capital expenditures on new facilities such as the Kindersley FST, the conversion of the Edson SWD to an FST and construction of the Corporation's first landfill in the US are expected to enhance financial and operational performance going forward. The list of organic opportunities contains several other projects that reflect the ability of Secure to take advantage of market potential that exists today. The Corporation is increasing the 2013 capital expenditure budget from the previously announced total of $155.0 million to $195.0 million to start these projects. The added capital will be deployed in Canada and the US primarily for new growth and expansion projects and long lead items for 2014 projects. The Corporation is well positioned to fund its expanded 2013 capital program with available debt capacity from its credit facilities and cash flow from operations.
Managing growth in a prudent manner ensures the Corporation's strong balance sheet is maintained. Secure has a focused strategy of constructing and expanding facilities and services in key under-serviced capacity constrained markets. A solid balance sheet provides the leverage and flexibility to execute this strategy. It also provides the strength to ensure the dividend program that began in May continues to generate returns to shareholders while continuing to provide Secure the ability to invest in growth and expansion opportunities.
FINANCIAL STATEMENTS AND MD&A
The condensed consolidated financial statements and MD&A of Secure for the three and six months ended June 30, 2013 are available immediately on Secure's website at . The condensed consolidated financial statements and MD&A will be available tomorrow on SEDAR at .
FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release 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 news release. In particular, this news release contains forward-looking statements pertaining to: general market conditions; the oil and natural gas industry; activity levels in the oil and gas sector, including drilling levels; commodity prices for oil, natural gas liquids ("NGLs") and natural gas; the increase in the first six months of 2013 operating days; demand for the Corporation's services; expansion strategy; the amounts of the PRD, DS and OS divisions' 2013 expanded capital budgets and the intended use thereof; debt service; capital expenditures; completion of facilities; future capital needs; access to capital; acquisition strategy; the Corporation's capital spending on the new Rocky Mountain House and Judy Creek, Alberta full service terminals; capital spending on the Kindersley, Saskatchewan FST; capital spending on the Kaybob, Alberta SWD; expansion of the new Edson, Alberta SWD to a FST; the construction of landfills at Saddle Hills and Fox Creek, Alberta; the construction of the landfill at 13 Mile in North Dakota; and capital spending on the Keene and Stanley water disposal facilities in North Dakota; oil purchase and resale revenue; and the closing of the acquisition of Target Rentals Ltd.
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 subsidiary 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 subsidiary's 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 news 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 news 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.
Non GAAP Measures and Operational Definitions
Contacts:
Secure Energy Services Inc.
Rene Amirault
Chairman, President and Chief Executive Officer
(403) 984-6100
(403) 984-6101 (FAX)
Secure Energy Services Inc.
Allen Gransch
Chief Financial Officer
(403) 984-6100
(403) 984-6101 (FAX)
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Datum: 13.08.2013 - 22:58 Uhr
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News-ID 287441
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Oil & Gas
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