FOR: TRICAN WELL SERVICE LTD.
TSX SYMBOL: TCW
Date issue: December 11, 2017
Time in: 8:30 AM e
CALGARY, ALBERTA--(Marketwired - Dec. 11, 2017) - Trican Well Service Ltd. (TSX:TCW) ("Trican" or the "Company") is pleased to announce its Capital Program of $44 million for the first half of 2018, update the status of the Company's Normal Course Issuer Bid ("NCIB"), and provide an operational update.
FIRST HALF 2018 CAPITAL PROGRAM
Trican expects a modest first half 2018 capital program with an allocation of $22 million for major components, $4 million for maintenance and replacement capital, $11 million for growth initiatives, $4 million for infrastructure and support projects, and $3 million to reactivate our remaining idle hydraulic fracturing capacity for second half of 2018 operations.
Growth and Reactivation Capital
We are not planning to build or grow our hydraulic horsepower (HHP) beyond our current total footprint of 680,000 HHP. Growth initiatives relate to a number of small projects to support hydraulic fracturing, fluid management and coil tubing operations that will: (1) directly increase our activity; (2) reduce our costs; and/or (3) increase our revenue rates. The investments are primarily focused on items supporting our 2018 equipment reactivations and items which improve our ability to handle the increased well service intensity. Planned reactivations, previously disclosed in our Management's Discussion and Analysis dated November 1, 2017, include the activation of all of our hydraulic fracturing equipment by the end of 2018.
NCIB PROGRAM UPDATE
The NCIB program commenced on October 3, 2017, and as at the date hereof, Trican has invested $25.8 million repurchasing an aggregate of 5,693,956 common shares at an average cost of $4.54 per share. Trican may still purchase an additional 28,580,419 common shares over the next 10 months of the program and expects to continue to do so, subject to available excess cash flow and trading restrictions that may arise due to ongoing corporate activities.
Q3 strong activity levels continued into the first half of Q4. However, late in November through early December, a number of our customers finalized their 2017 capital programs. We expect that this factor, combined with the typical December holiday slowdown, will result in lower overall proppant volumes for Q4 2017 when compared to the third quarter 2017 proppant volumes of 563,000 tonnes. During October and November Trican proppant volumes were approximately 310,000 tonnes. The expected reduction in Q4 sequential proppant volumes is not indicative of our anticipated first quarter activity levels nor has the fourth quarter slowdown in activity resulted in changes to our services pricing levels. We continue to have visibility for significant first half 2018 demand for our services and are currently working with our customers to commence Q1 2018 well completion activities in late December to ensure we are able to meet our customers' service requirements.
Headquartered in Calgary, Alberta, Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.
Certain statements contained in this document constitute forward-looking information and statements (collectively "forward-looking statements"). These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "estimate", "expect", "intend", "plan", "planned", and other similar terms and phrases. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. We believe the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this document should not be unduly relied upon. These statements speak only as of the date of this document.
In particular, this document contains forward-looking statements pertaining to, but not limited to, the following:
-- expectations regarding the timing and amounts related to the Company'splanned 2018 capital expenditures; -- anticipated adjustments to our active equipment fleet including related workforce recruitment and retention; -- expected allocation of free cash flow to our NCIB program; -- anticipated industry activity levels and overall supply and demand, as well as customer work programs and equipment utilization levels; and -- expectations regarding quantity of proppant pumped in the fourth quarter of 2017;
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and in the "Risk Factors" section of our Annual Information Form dated March 29, 2017:
-- volatility in market prices for oil and natural gas;
-- liabilities inherent in oil and natural gas operations;
-- competition from other suppliers of oil and gas services;
-- competition for skilled personnel;
-- changes in income tax laws or changes in other laws and incentive
Readers are cautioned that the foregoing lists of factors are not exhaustive. Forward-looking statements are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although management of Trican believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trican can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: crude oil and natural gas prices; the impact of increasing competition; the general stability of the economic and political environment; the timely receipt of any required regulatory approvals; Trican's, Canyon's and the combined company's ability to continue its operations for the foreseeable future and to realize its assets and discharge its liabilities and commitments in the normal course of business; industry activity levels; Trican's policies with respect to acquisitions; the ability of Trican to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate our business in a safe, efficient and effective manner; the ability of Trican to obtain capital resources and adequate sources of liquidity; the performance and characteristics of various business segments; the regulatory framework; the timing and effect of pipeline, storage and facility construction and expansion; and future commodity, currency, exchange and interest rates.
The forward-looking statements contained in this document are expressly qualified by this cautionary statement. We do not undertake any obligation to publicly update or revise any forward-looking statements except as required by applicable law.
Additional information regarding Trican including Trican's most recent Annual Information Form is available under Trican's profile on SEDAR (www.sedar.com).
- END RELEASE - 11/12/2017
For further information:
President and Chief Executive Officer
Chief Financial Officer
Senior Vice President, Corporate Development
Phone: (403) 266-0202
Fax: (403) 237-7716
2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8
Please visit our website at www.tricanwellservice.com
FOR: TRICAN WELL SERVICE LTD.
TSX SYMBOL: TCW
INDUSTRY: Energy and Utilities - Equipment, Energy and Utilities -
Oil and Gas
RELEASE ID: 20171211CC0019
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