From the Wires
Secure Energy Announces $155 Million Capital Budget for 2013
By: Marketwired .
Dec. 5, 2012 08:00 PM
CALGARY, ALBERTA -- (Marketwire) -- 12/06/12 -- Secure Energy Services Inc. ("Secure" or the "Corporation") (TSX:SES) is pleased to announce its 2013 capital budget.
The Corporation's Board of Directors has approved a preliminary 2013 capital budget of $155 million. Included in the $155 million is $15 million of carry over capital from 2012 projects related to the Rocky Mountain House and Judy Creek full service terminals ("FSTs"). The remaining $140 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 $125 million in the Processing Recovery and Disposal ("PRD") division which is allocated as follows:
-- $115 million for growth capital consisting of three FSTs, two stand- alone water disposal facilities (SWDs), two landfills and long lead items; -- $7 million for expansion capital relating to additional treaters and tanks; and -- $3 million in sustaining capital for normal course maintenance operations.
Secure also expects to invest $15 million into the Drilling Services ("DS") division. The capital is allocated evenly between the Canadian and U.S. operations and is largely comprised of onsite solids control equipment. Secure's 2013 capital budget focuses on the Corporation's aggressive expansion plans to invest in organic growth opportunities, recycling services and complimentary services at existing facility locations.
In 2013, the Corporation's primary objectives will be to maintain and strengthen its market position by consistently providing operational excellence, innovative solutions and cost efficiencies to its customers. Secure has a strong balance sheet and is well positioned to capitalize on new opportunities that support its growing customer base. The organic growth and expansion capital detailed above will enhance our competitive positioning and expand our service offering in both 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. It is expected that the majority of the above capital program for 2013 will not have any cash flow impact until 2014, which is typical considering the approval and construction timelines for these types of facilities. Achieving the above capital program will present new opportunities for Secure, its customers and shareholders.
The Corporation intends to fund the 2013 capital budget with cash flow from operations and the Corporation's recently announced $300 million revolving credit facility. Consistent with the Corporation's approach to capital spending, Secure will respond accordingly to market dynamics and manage its expenditures to maintain its balance sheet strength in the future.
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 two divisions:
Processing, Recovery and Disposal Division: Operating under the trade name Secure Energy Services Inc., the processing, recovery and disposal services 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 trade names Marquis Alliance Energy Group Inc. ("Marquis Alliance"), XL Fluids Systems ("XL Fluids") and Imperial Drilling Fluids Engineering ("IDF"), the drilling services division focuses on drilling fluid systems, solids control, equipment rental service, drilling waste management and environmental services. The drilling fluids service line includes the design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas.
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 demand for the Corporation's services and the factors contributing thereto; expansion strategy; the 2013 capital budget; the allocation between the PRD and DS divisions and Canadian and U.S. operations; the intended construction of three FSTs, two SWDs and two landfills; debt service; capital expenditures; completion of facilities; future capital needs; access to capital; acquisition strategy; the Corporation's capital spending on the Rocky Mountain House and Judy Creek, Alberta full service terminals and the timing of completion 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 subsidiaries' 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, 2011. Although forward-looking statements contained in this document 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 document 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.
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