CALGARY,
Feb. 26, 2015 /CNW/ - Western Energy
Services Corp. ("Western" or the "Company") (TSX: WRG) is pleased
to release its fourth quarter 2014 and year end financial and
operating results. Additional information relating to the
Company, including the Company's financial statements and
management's discussion and analysis as at and for the years ended
December 31, 2014 and 2013 will be
available on SEDAR at www.sedar.com. All amounts are
denominated in Canadian dollars (CDN$) unless otherwise
identified.
Fourth Quarter 2014 Highlights:
- Operating Revenue totalled $129.2
million, a $9.4 million
increase (or 8%) over the same period in the prior year as contract
drilling day rates improved in both Canada and the
United States and utilization and pricing improved in the
production services segment;
- Contract drilling operating days remained relatively constant
year over year as a larger average drilling rig fleet in
Canada was offset by lower
utilization in Canada and
the United States.
Utilization per operating day in the Canadian contract drilling
segment decreased to 59%, which was higher than the CAODC industry
average of 45% but lower than 65% in the fourth quarter of
2013. In the United States,
contract drilling utilization per operating day remained strong at
85% as compared to 87% in the same period of the prior year, as the
fleet was essentially fully utilized in both periods;
- Well servicing activity increased in most of Western's
operating areas, particularly the focus on steam assisted gravity
drainage ("SAGD") work in the oil sands in northern Alberta resulted in well servicing utilization
improving to 58% in the fourth quarter of 2014 as compared to 53%
in the fourth quarter of 2013;
- Adjusted EBITDA totalled $50.4
million (39% of Operating Revenue) in the fourth quarter of
2014 as compared to $43.5 million
(36% of Operating Revenue) in the same period of the prior
year. The increase in Adjusted EBITDA is mainly due to
improved rates in the contract drilling segment and higher pricing
and utilization in the production services segment;
- Although actual results were as expected, and have improved
year over year, as a result of the declining commodity price
environment and the reduced outlook for oilfield services activity
and pricing, Western recorded an impairment loss on goodwill in the
production services segment of $22.7
million, as well as a loss on the decommissioning of a
shallow drilling rig, used drilling equipment and underutilized
oilfield rental equipment totalling $7.2
million;
- During the fourth quarter of 2014, capital expenditures
totalled $31.1 million and included
$23.6 million of expansion capital,
$5.6 million of maintenance capital
and $1.9 million for rotational
equipment. Capital spending mainly relates to Western's rig build
program which incurred costs on the construction of one slant well
servicing rig and four drilling rigs, one of which was commissioned
in the period;
- On December 18, 2014, Western
increased its four year extendible credit facility (the "Revolving
Facility") to $175.0 million from
$125.0 million previously, with a
maturity date extension to December 17,
2018, and increased Western's operating demand revolving
loan (the "Operating Facility") to $20.0
million from $10.0 million
previously.
Full Year 2014 Highlights:
- Operating Revenue totalled $474.1
million, a $121.0 million
increase (or 34%) over the prior year due to higher utilization,
improved day rates, and a larger average drilling rig fleet in the
contract drilling segment, as well as improved utilization and
pricing, in addition to the increased size and scale of Western's
production services segment following the acquisition of IROC
Energy Services Corp. ("IROC") in April of 2013;
- Contract drilling utilization per operating day in Canada averaged 58%, as compared to the CAODC
industry average of 44% and 55% in the prior year. In
the United States, contract
drilling utilization per operating day increased by 1,600 bps to
83% as compared to 67% in 2013. With the exception of
downtime related to the completion of two 1,500 hp AC pad
conversions in the first half of 2014, the United States fleet was essentially fully
utilized in 2014;
- Total well servicing hours in Western's production services
segment increased 64% to 127,768 from 77,879 in 2013. The
increase is attributed to improved utilization, which increased to
54% in 2014 as compared to 45% in the prior year, coupled with the
increased size and scale of Western's well servicing operations
subsequent to the IROC acquisition;
- Adjusted EBITDA totalled $176.8
million (37% of Operating Revenue) in 2014 as compared to
$117.4 million (33% of Operating
Revenue) in 2013. The increase in Adjusted EBITDA reflects
the increased activity, improved day rates and the larger drilling
rig fleet in the contract drilling segment, as well as improved
utilization and pricing, in addition to the increased size and
scale of Western's production services segment and effective cost
control in all of Western's divisions;
- Capital expenditures totalled $108.6
million and include $85.2
million of expansion capital, $14.8
million of maintenance capital and $8.6 million of rotational equipment. Capital
spending mainly relates to the drilling rig build program in the
contract drilling segment as three drilling rigs were commissioned
in 2014, with an additional three drilling rigs under construction
at year end. Additionally, two 1,500 hp AC pad conversions
were completed in the United
States in the second quarter of 2014.
Selected Financial Information
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| (stated in thousands, except share
and per share amounts) |
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Three months ended December
31 |
|
Year ended December 31 |
| Financial Highlights |
2014 |
2013 |
Change |
|
2014 |
2013 |
Change |
| Revenue |
139,210 |
129,713 |
7% |
|
507,832 |
379,943 |
34% |
| Operating Revenue(1) |
129,181 |
119,831 |
8% |
|
474,120 |
353,124 |
34% |
| Gross Margin(1) |
57,826 |
52,980 |
9% |
|
207,231 |
147,559 |
40% |
| Gross Margin as a percentage of
Operating Revenue |
45% |
44% |
2% |
|
44% |
42% |
5% |
| Adjusted EBITDA(1) |
50,419 |
43,543 |
16% |
|
176,777 |
117,423 |
51% |
| Adjusted EBITDA as a percentage of
Operating Revenue |
39% |
36% |
8% |
|
37% |
33% |
12% |
| Cash flow from operating
activities |
47,830 |
36,866 |
30% |
|
181,351 |
114,358 |
59% |
| Capital expenditures |
31,071 |
27,529 |
13% |
|
108,604 |
95,234 |
14% |
| Net income (loss) |
(8,164) |
15,797 |
(152%) |
|
36,450 |
35,246 |
3% |
| -basic net income (loss) per share |
(0.11) |
0.22 |
(150%) |
|
0.49 |
0.51 |
(4%) |
| -diluted net income (loss) per
share |
(0.11) |
0.21 |
(152%) |
|
0.48 |
0.50 |
(4%) |
| Weighted average number of shares |
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| -basic |
74,882,690 |
73,374,219 |
2% |
|
74,396,701 |
69,032,574 |
8% |
| -diluted |
74,927,714 |
73,654,868 |
2% |
|
75,427,149 |
69,873,460 |
8% |
| Outstanding common shares as at period
end |
74,866,028 |
73,386,191 |
2% |
|
74,866,028 |
73,386,191 |
2% |
| Dividends declared |
5,614 |
5,504 |
2% |
|
22,376 |
20,983 |
7% |
| (1) See "Financial Measures
Reconciliations" included in this press release. |
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Three months ended December 31, |
Year ended December
31 |
| Operating Highlights |
2014 |
2013 |
Change |
2014 |
2013 |
Change |
| Contract Drilling |
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| Canadian Operations: |
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| Contract drilling rig fleet: |
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| -Average |
50 |
|
46 |
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9% |
|
49 |
45 |
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9% |
| -End of period |
49 |
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47 |
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4% |
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49 |
47 |
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4% |
| Operating Revenue per revenue
day(1) |
27,104 |
|
26,060 |
|
4% |
|
26,178 |
24,829 |
|
5% |
| Operating Revenue per operating
day(2) |
29,710 |
|
28,884 |
|
3% |
|
28,699 |
27,513 |
|
4% |
| Drilling rig operating days(3) |
2,724 |
|
2,754 |
|
(1%) |
|
10,478 |
9,098 |
|
15% |
| Drilling rig utilization per revenue
day(4) |
65% |
|
72% |
|
(10%) |
|
64% |
61% |
|
5% |
| Drilling rig utilization rate per operating
day(5) |
59% |
|
65% |
|
(9%) |
|
58% |
55% |
|
5% |
| CAODC industry average utilization
rate(5) |
45% |
|
43% |
|
5% |
|
44% |
40% |
|
10% |
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| United States Operations: |
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| Contract drilling rig fleet: |
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| -Average |
5 |
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5 |
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-% |
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5 |
5 |
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-% |
| -End of period |
5 |
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5 |
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-% |
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5 |
5 |
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-% |
| Operating Revenue per revenue day
(US$)(1) |
28,309 |
|
23,457 |
|
21% |
|
26,124 |
22,507 |
|
16% |
| Operating Revenue per operating day
(US$)(2) |
31,876 |
|
26,559 |
|
20% |
|
29,680 |
26,942 |
|
10% |
| Drilling rig operating days(3) |
385 |
|
402 |
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(4%) |
|
1,506 |
1,228 |
|
23% |
| Drilling rig utilization per revenue
day(4) |
95% |
|
99% |
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(4%) |
|
94% |
81% |
|
16% |
| Drilling rig utilization per operating
day(5) |
85% |
|
87% |
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(2%) |
|
83% |
67% |
|
24% |
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| Production Services |
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| Well servicing rig fleet: |
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| -Average |
65 |
|
65 |
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-% |
|
65 |
48 |
|
35% |
| -End of period |
65 |
|
65 |
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-% |
|
65 |
65 |
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-% |
| Operating Revenue per service
hour(2) |
837 |
|
804 |
|
4% |
|
817 |
766 |
|
7% |
| Total service hours |
34,456 |
|
31,403 |
|
10% |
|
127,768 |
77,879 |
|
64% |
| Service rig utilization rate(6) |
58% |
|
53% |
|
9% |
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54% |
45% |
|
20% |
| (1) |
Operating Revenue per revenue day is calculated using Operating
Revenue divided by operating and mobilization days. |
| (2) |
Operating Revenue per operating day and per service hour are
calculated using Operating Revenue divided by operating days and
service hours, respectively. |
| (3) |
Drilling rig operating days are calculated on a spud to rig
release basis. |
| (4) |
Drilling rig utilization rate per revenue day is calculated
based on operating and mobilization days divided by total available
days. |
| (5) |
Drilling rig utilization rate per operating day is calculated
on operating days only (i.e. spud to rig release basis) divided by
total available days. |
| (6) |
Service rig utilization rate is calculated based on actual well
servicing hours divided by available hours, being 10 hours per day,
per well servicing rig, 365 days per year. |
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| Financial Position at (stated in
thousands) |
December 31, 2014 |
December 31, 2013 |
Change |
| Working capital |
78,336 |
50,616 |
55% |
| Property and equipment |
827,306 |
783,225 |
6% |
| Total assets |
1,057,118 |
986,792 |
7% |
| Long term debt |
264,165 |
262,877 |
-% |
Western is an oilfield service company focused
on three core business lines: contract drilling, well servicing and
oilfield rental equipment services. Western provides contract
drilling services through its division, Horizon Drilling
("Horizon") in Canada, and its
wholly owned subsidiary Stoneham Drilling Corporation ("Stoneham"),
in the United States.
Subsequent to the acquisition of IROC on April 22, 2013, Western provides well servicing
operations in Canada through
Western Energy Services Partnership's (the "Partnership") division,
Eagle Well Servicing ("Eagle"). Previously, well servicing
operations were conducted through Western's division, Matrix Well
Servicing ("Matrix"). Western also provides oilfield rental
equipment services in Canada
through the Partnership's division, Aero Rental Services
("Aero"). Financial and operating results for Eagle and Aero
from the date of the acquisition, as well as Matrix, are included
in Western's production services segment.
Western currently has a drilling rig fleet of 54
rigs, with an average age of approximately seven years.
Western is the sixth largest drilling contractor in Canada with a fleet of 49 rigs operating
through Horizon. Additionally, Western has five Efficient
Long Reach ("ELR") triple drilling rigs deployed in the United States operating through
Stoneham. Western is also
the seventh largest well servicing company in Canada with a fleet of 65 rigs operating
through Eagle. Western's well servicing rig fleet is one of
the newest in the Western Canadian Sedimentary Basin ("WCSB"), with
an average age of approximately five years. Western's
oilfield equipment rental division, which operates through Aero,
provides oilfield rental equipment for frac services, well
completions and production work, coil tubing services and
drilling.
Commodity prices such as crude oil and natural
gas impact the cash flow of Western's customers, which in turn
impacts the demand for Western's services. Overall
performance of the Company was affected by the volatility of crude
oil in the second half of 2014. Crude oil prices were strong
in the first six months of 2014, however weakened significantly in
the last half of 2014. During the first six months of 2014,
light oil such as West Texas Intermediate ("WTI") averaged
approximately US$95/bbl, while during
the last half of 2014, WTI averaged approximately US$85/bbl and approximately US$73/bbl in the fourth quarter of 2014.
From its peak in June 2014 of
approximately US$103/bbl to the
December 31, 2014 exit price of
approximately US$53/bbl, WTI
decreased by approximately 49%. Similarly, the price for
heavy oil, such as Western Canadian Select ("WCS"), averaged
approximately $89/bbl in the first
half of 2014, while during the last six months of 2014, WCS
averaged approximately $75/bbl and
approximately $65/bbl in the fourth
quarter of 2014. From its highest price in June 2014 of approximately $95/bbl to approximately $43/bbl at the end of the year, WCS decreased by
approximately 55%. On a year over year basis, the average
price of WTI decreased by approximately 5% in 2014, while WCS
increased by approximately 11% as compared to the prior year.
Natural gas prices have marginally improved to average
approximately $4/mcf in the fourth
quarter of 2014, a 3% increase as compared to the same period in
2013. However, from February
2014 when AECO averaged approximately $7/mcf to the exit price of approximately
$3/mcf at December 31, 2014, AECO decreased by
approximately 57%. Year over year, the AECO 30-day spot rate
increased on average by 44% as heating demand increased in the
first quarter due to a cold winter, resulting in decreased storage
levels across North America.
Despite the reduction in commodity prices in the
last half of the year, strong demand for oilfield services resulted
in increased drilling of horizontal wells in both conventional and
unconventional resource plays. Horizontal wells in the WCSB,
as a percentage of all wells drilled, increased in the year ended
December 31, 2014 to 75%, as compared
to 70% in the prior year. This has resulted in continued
demand in the WCSB for Western's ELR drilling rigs, as industry
utilization rates for the year ended December 31, 2014 averaged 44%, which is
consistent with the five year average and an improvement over the
prior year when industry utilization averaged 40%.
Outlook
Western's drilling rig fleet is specifically
suited for drilling horizontal wells of increased complexity.
In total, 96% of Western's fleet are ELR drilling rigs with depth
ratings greater than 3,000 meters and all of Western's rigs are
capable of drilling resource based horizontal wells.
Currently, 12 of Western's 54 drilling rigs (or 22%) are operating
under long term take-or-pay contracts, with 5 of these contracts
committed into 2016 and 2017, providing a base level of future
revenue. These contracts typically generate 250 operating
days per year in Canada, as spring
breakup restricts activity during the second quarter, while in
the United States these contracts
typically range from 330 to 365 revenue generating days per
year.
Western's revised capital budget for 2015 totals
approximately $46 million comprised
of $21 million of carry forward
capital from 2014, $6 million in
expansion capital and $19 million in
maintenance capital. The revised capital budget reflects a
net decrease of $18 million from
Western's previously announced budget of $64
million. The following table summarizes the changes in
the 2015 capital budget:
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Capital Expenditures
(stated in millions) |
Original 2015
Budget |
Cancellations |
Increased 2014
Carry Forward |
Revised 2015
Budget |
Variance |
| Expansion |
6 |
- |
- |
6 |
- |
| Maintenance |
36 |
(17) |
- |
19 |
(17) |
| Carry forward |
22 |
(4) |
3 |
21 |
(1) |
| Total Capital Expenditures |
64 |
(21) |
3 |
46 |
(18) |
Revised carry forward capital of $21 million relates to the completion of two
5,000m telescopic ELR double drilling rigs, one 6,000m ELR AC
triple pad drilling rig and one slant well servicing rig.
Expansion capital of $6 million
relates to additional oilfield rental equipment, while maintenance
capital of $19 million includes
$13 million for the contract drilling
segment and $6 million for the
production services segment. Included in the maintenance
capital budget is $1 million related
to rotational equipment. In addition, the majority of the
capital budget has been deferred until the second half of 2015 and
will be further postponed or cancelled if market conditions
continue to deteriorate. Western believes the 2015 capital
budget provides a prudent use of cash resources and ensures that it
continues to maintain its balance sheet flexibility, allowing for
the execution on strategic opportunities as they arise, or
alternatively adjust downward, if the downturn in oilfield service
activity is prolonged. This budget demonstrates the Company's
commitment to maintaining its drilling and well servicing rig
fleets while expanding Western's strategic presence in the oilfield
rental equipment market. Western will continue to evaluate and
expand its operations in a disciplined manner and make any required
adjustments to its capital program as customer demand improves.
The continued pressure on crude oil and natural
gas prices, which are currently near five year lows, has resulted
in reductions to the capital spending plans for the majority of our
customers. In some cases, the capital spending reductions
have been significant. While activity in the first two months
of 2015 has been constant, although lower than in the same period
of the prior year, Western currently expects an early end to first
quarter activity, due to the current commodity price
environment. Activity levels throughout the oilfield services
industry for the remainder of 2015 are expected to be significantly
lower as compared to 2014, resulting in utilization and price
reductions across all of Western's business lines. Lower
activity and pricing pressure, will impact Western's Adjusted
EBITDA and cash flow from operating activities. Western's
variable cost structure, under which approximately 80% of operating
and administrative costs are variable, and prudent capital budget
will aid in preserving balance sheet strength. At
December 31, 2014, Western's net debt
to trailing 12 month EBITDA ratio was 1.1. In addition to
$62.7 million in cash and cash
equivalents at December 31, 2014,
Western has $175 million available on
the Revolving Facility, which does not mature until December 17, 2018, $20
million available on the Operating Facility, and no
principle repayments are due on the $265
million Senior Notes until they mature on January 30, 2019. As such, Western is well
positioned to manage the current slowdown in activity and maintain
a sustainable dividend.
Oilfield service activity will be impacted by
the development of resource plays in Alberta and northeast British Columbia including those related to
liquefied natural gas projects, increased crude oil transportation
capacity through rail and pipeline development and foreign
investment into Canada.
Currently, the largest challenges facing the oilfield service
industry are producer spending constraints as a result of lower
commodity prices, pricing differentials on Canadian crude oil, and
the challenge to attract and retain skilled labour. The
Company believes Western's modern drilling and well servicing rig
fleet, above industry average utilization, and corporate culture
will provide a distinct advantage in retaining and attracting
qualified individuals. Western's view is that its modern
fleet, strong customer base and solid reputation provide a
competitive advantage which will enable the Company to continue its
growth strategy and higher than industry average utilization.
Quarterly Dividend
On February 26,
2015, Western's Board of Directors declared a quarterly
dividend of $0.075 per share, which
will be paid on April 16, 2015, to
shareholders of record at the close of business on March 31, 2015. The dividends are eligible
dividends for Canadian income tax purposes. On a prospective
basis, the declaration of dividends will be determined on a
quarter-by-quarter basis by the Board of Directors.
Normal Course Issuer Bid
On December 15,
2014, Western initiated a normal course issuer bid (the
"Bid"), which has been filed with and accepted by the Toronto Stock
Exchange. Pursuant to the Bid, Western may purchase for
cancellation up to 5,550,000 common shares of the Company.
23,400 common shares for a total cost of approximately $0.1 million were repurchased in the fourth
quarter of 2014.
Financial Measures Reconciliations
Western uses certain measures in this press
release which do not have any standardized meaning as prescribed by
International Financial Reporting Standards ("IFRS"). These
measures which are derived from information reported in the
consolidated statements of operations and comprehensive income may
not be comparable to similar measures presented by other reporting
issuers. These measures have been described and presented in
this press release in order to provide shareholders and potential
investors with additional information regarding the Company.
Operating Revenue
Management believes that in addition to revenue,
Operating Revenue is a useful supplemental measure as it provides
an indication of the revenue generated by Western's principal
operating activities, excluding flow through third party
charges.
Gross Margin
Management believes that in addition to net
income, Gross Margin is a useful supplemental measure as it
provides an indication of the results generated by Western's
principal operating activities prior to considering administrative
expenses, depreciation and amortization, how those activities are
financed, the impact of foreign exchange, how the results are
taxed, how funds are invested, and how non-cash items and one-time
gains and losses affect results.
The following table provides a reconciliation of
revenue under IFRS, as disclosed in the consolidated statements of
operations and comprehensive income, to Operating Revenue and Gross
Margin:
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Three months ended December
31 |
Year
ended December 31 |
| (stated in thousands) |
2014 |
2013 |
2014 |
2013 |
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| Operating Revenue |
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Drilling |
94,877 |
90,754 |
350,105 |
284,469 |
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Production Services |
34,447 |
29,275 |
125,404 |
69,004 |
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Less: inter-company eliminations |
(143) |
(198) |
(1,389) |
(349) |
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129,181 |
119,831 |
474,120 |
353,124 |
| Third party charges |
10,029 |
9,882 |
33,712 |
26,819 |
| Revenue |
139,210 |
129,713 |
507,832 |
379,943 |
| Less: operating expenses |
(98,524) |
(92,901) |
(363,603) |
(280,980) |
| Add: |
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Depreciation - operating |
16,740 |
15,916 |
61,991 |
47,701 |
| |
Stock based compensation - operating |
400 |
252 |
1,011 |
895 |
| Gross Margin |
57,826 |
52,980 |
207,231 |
147,559 |
Adjusted EBITDA
Management believes that in addition to net
income, earnings before interest and finance costs, taxes,
depreciation and amortization, other non-cash items and one-time
gains and losses ("Adjusted EBITDA") is a useful supplemental
measure as it provides an indication of the results generated by
the Company's principal operating segments similar to Gross Margin
but also factors in the cash administrative expenses incurred in
the period.
Operating Earnings
Management believes that in addition to net
income, Operating Earnings is a useful supplemental measure as it
provides an indication of the results generated by the Company's
principal operating segments similar to Adjusted EBITDA but also
factors in the depreciation expense charged in the period.
The following table provides a reconciliation of net income
under IFRS, as disclosed in the consolidated statements of
operations and comprehensive income, to EBITDA, Adjusted EBITDA and
Operating Earnings:
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Three months ended December
31 |
Year ended December 31 |
| (stated in thousands) |
2014 |
2013 |
2014 |
2013 |
| |
|
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|
|
| Net income (loss) |
(8,164) |
15,797 |
36,450 |
35,246 |
| Add: |
|
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|
| |
Finance costs |
4,897 |
5,155 |
20,782 |
17,058 |
| |
Income taxes |
5,784 |
5,302 |
22,311 |
13,000 |
| |
Depreciation - operating |
16,740 |
15,916 |
61,991 |
47,701 |
| |
Depreciation - administrative |
444 |
345 |
1,776 |
1,431 |
| EBITDA |
19,701 |
42,515 |
143,310 |
114,436 |
| Add: |
|
|
|
|
| |
Stock based compensation - operating |
400 |
252 |
1,011 |
895 |
| |
Stock based compensation - administrative |
1,073 |
413 |
2,827 |
1,596 |
| |
Impairment loss on property and equipment |
7,247 |
- |
7,247 |
- |
| |
Impairment loss on goodwill |
22,668 |
- |
22,668 |
- |
| |
Other items |
(670) |
363 |
(286) |
496 |
| Adjusted EBITDA |
50,419 |
43,543 |
176,777 |
117,423 |
| Subtract: |
|
|
|
|
| |
Depreciation - operating |
(16,740) |
(15,916) |
(61,991) |
(47,701) |
| |
Depreciation - administrative |
(444) |
(345) |
(1,776) |
(1,431) |
| Operating Earnings |
33,235 |
27,282 |
113,010 |
68,291 |
2014 Fourth Quarter Results Conference Call
and Webcast
Western has scheduled a conference call and
webcast to begin at 12:00 p.m. MST
(2:00 p.m. EST) on Friday, February 27, 2015.
The conference call dial-in number is
1-888-231-8191.
A live webcast of the conference call will be
accessible on Western's website at www.wesc.ca by selecting
"Investors", then "Webcasts". Shortly after the
live webcast, an archived version will be available for
approximately 14 days.
An archived recording of the conference call
will also be available approximately one hour after the completion
of the call until March 13, 2015 by
dialing 1-855-859-2056 or 416-849-0833, passcode 64127463.
Forward-Looking Statements and Information
This press release contains certain statements
or disclosures relating to Western that are based on the
expectations of Western as well as assumptions made by and
information currently available to Western which may constitute
forward-looking information under applicable securities laws.
All such statements and disclosures, other than those of historical
fact, which address activities, events, outcomes, results or
developments that Western anticipates or expects may, or will occur
in the future (in whole or part) should be considered
forward-looking information. In some cases forward-looking
information can be identified by terms such as "forecast",
"future," "may", "will", "expect", "anticipate,", "believe",
"potential", "enable", "plan", "continue", "contemplate", "pro
forma", or other comparable terminology.
In particular, forward-looking information in
this press release includes, but is not limited to, statements
relating to the future demand for the Company's services and
equipment; the terms of existing and future drilling contracts in
Canada and the US and the revenues
resulting therefrom (including the number of operating days
typically generated from the Company's contracts); the Company's
expansion and maintenance capital plans for 2015, including the
ability of current capital resources to cover Western's financial
obligations and the 2015 capital budget; the Company's expected
sources of funding to support such capital plans and the Company's
plans to postpone capital spending if market conditions continue to
deteriorate; expectations as to the increase in crude oil
transportation capacity through rail and pipeline development;
expectations as to the necessary approvals for liquefied natural
gas projects being obtained; the expectation of continued foreign
investment into the Canadian oilfield industry; the expectation of
an early end to first quarter activity; the expectation of
significantly lower activity levels in the oilfield services
industry in 2015 (compared to 2014); and the expectation that
producer spending constraints will continue to be a large challenge
facing the Company in 2015.
The material assumptions in making the
forward-looking statements in this press release include, but are
not limited to, assumptions relating to, demand levels and pricing
for oilfield services; fluctuations in the price and demand for oil
and natural gas; the continued low levels of and pressures on
commodity pricing; the continued business relationship between the
Company and its one significant customer; general economic and
financial market conditions; the development of liquefied natural
gas projects, crude oil transport and pipeline approval and
development; the Company's ability to finance its operations; the
effects of seasonal and weather conditions on operations and
facilities; the competitive environment to which the various
business segments are, or may be, exposed in all aspects of their
business; the ability of the Company's various business segments to
access equipment (including spare parts and new technologies);
changes in laws or regulations; currency exchange fluctuation; the
ability of the Company to attract and retain skilled labour and
qualified management; the ability to retain and attract significant
customers; and other unforeseen conditions which could impact the
use of services supplied by Western including Western's ability to
respond to such conditions.
Although Western believes that the expectations
and assumptions on which such forward-looking statements and
information are based on are reasonable, undue reliance should not
be placed on the forward-looking statements and information as
Western cannot give any assurance that they will prove to be
correct. Since forward-looking statements and information
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a
number of factors and risks. These include, but are not
limited to, the risk that the demand for oilfield services will not
continue to improve for the remainder of 2015 and that commodity
price levels will remain low, and other general industry, economic,
market and business conditions. Readers are cautioned that
the foregoing list of risks, uncertainties and assumptions are not
exhaustive. Additional information on these and other risk
factors that could affect Western's operations and financial
results are included in Western's annual information form which may
be accessed through the SEDAR website at www.sedar.com. The
forward-looking statements and information contained in this press
release are made as of the date hereof and Western does not
undertake any obligation to update publicly or revise any
forward-looking statements and information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Western Energy Services Corp.