CALGARY, ALBERTA
-- (Marketwired)
-- 07/31/15
Western Energy Services Corp. ("Western" or the "Company") (TSX:WRG) is pleased to release its second quarter 2015 financial and operating results and declare a quarterly dividend of $0.075 per share. Additional information relating to the Company, including the Company's financial statements and management's discussion and analysis as at and for the three months and six months ended June 30, 2015 and 2014 will be available on SEDAR at www.sedar.com. Non-International Financial Reporting Standards ("Non-IFRS") measures and abbreviations for standard industry terms are included in this press release. All amounts are denominated in Canadian dollars (CDN$) unless otherwise identified.
Second Quarter 2015 Highlights:
-- Second quarter Operating Revenues decreased by $46.7 million (or 60%) to
$30.7 million in 2015 as compared to $77.4 million in 2014. In the
contract drilling segment, Operating Revenues decreased $38.4 million
(or 70%) to $16.7 million in the second quarter of 2015 as compared to
$55.1 million in the second quarter of 2014. Contract drilling Operating
Days decreased approximately 68% in the second quarter of 2015, as
compared to the same period in the prior year, due to the decreased
commodity price environment, resulting in significant reductions in the
capital spending programs of Western's customers. Reduced activity and
increased competition resulted in downward pricing pressure which
reduced average day rates in the contract drilling segment in Canada by
approximately 22%. In the United States, average day rates have
increased marginally in the second quarter of 2015, as one of Western's
upgraded rigs worked throughout the quarter on a long term contract. In
the production services segment, hourly rates decreased marginally by 1%
due to increased pricing pressure in all areas, offset by changes in rig
mix concentrating on more rigs working in geographic areas that generate
higher hourly rates. However, decreased utilization resulted in an $8.9
million decrease in Operating Revenues in the production services
segment during the second quarter of 2015, as compared to the second
quarter of 2014;
-- Second quarter 2015 drilling rig utilization - Operating Day in the
Canadian contract drilling segment averaged 10%, which was lower than
the Canadian Association of Oilwell Drilling Contractors ("CAODC")
industry average of 13% and the 34% averaged in the second quarter of
2014. The change relative to the CAODC industry average is due to a
number of Western's customers, who typically drill through spring
breakup, significantly cutting their second quarter drilling programs in
2015, resulting in the discount to the CAODC industry average. In the
United States, drilling rig utilization - Operating Day decreased to 31%
as compared to 80% in the same period of the prior year, mainly due to
reduced activity resulting from the decreased commodity price
environment;
-- Well servicing activity decreased in most of Western's operating areas
due to the decreased commodity price environment, which resulted in
service rig utilization decreasing to 26% in the second quarter of 2015
as compared to 40% in the second quarter of 2014. Despite the
significant decrease in activity, Western continued to gain market share
in the second quarter of 2015, as the CAODC reported that Western worked
the third most Service Hours in the Western Canadian Sedimentary Basin
("WCSB"), while comparatively having the sixth largest well servicing
rig fleet;
-- Second quarter Adjusted EBITDA totalled $4.3 million in 2015 (14% of
Operating Revenue), a $19.7 million decrease (or 82%), as compared to
$24.0 million in the second quarter of 2014 (31% of Operating Revenue).
The year over year decrease in Adjusted EBITDA is due to lower
utilization and pricing in both the contract drilling and production
services segments;
-- During the second quarter of 2015, capital expenditures totalled $7.7
million and included $5.6 million of expansion capital and $2.1 million
of maintenance capital. The majority of the capital expenditures relate
to expansion capital incurred on the completion of Western's 2014 rig
build program.
Year to Date Highlights:
-- Operating Revenues for the six month period ended June 30, 2015
decreased by $95.3 million (or 42%) to $131.7 million as compared to
$227.0 million in the same period of the prior year. Included in
Operating Revenues in the contract drilling segment for the six month
period ended June 30, 2015 is US$4.5 million in shortfall commitment and
standby revenue on idle but contracted rigs in the United States. The
decrease in Operating Revenue is due to decreased utilization and
pricing in the contract drilling segment, coupled with decreased
utilization in the production services segment;
-- On a year to date basis, drilling rig utilization - Operating Day in the
Canadian contract drilling segment averaged 30%, which was 600 bps
higher than the CAODC industry average of 24% but lower than the 57%
averaged in the same period of 2014. The Company's drilling rig
utilization - Operating Day in Canada premium to the CAODC industry
average decreased by 900 bps to 600 bps, as compared to the 1,500 bps
premium realized in the six months ended June 30, 2014. The decrease in
the Company's utilization premium is partially due to increased
competition in the industry due to a reduction in the industry rig count
from 808 rigs at June 30, 2014 to 768 rigs at June 30, 2015, as
competitors continue to decommission older shallower rigs given the
current market conditions, coupled with a delayed start to the summer
drilling season in the second quarter of 2015 which resulted in
Western's customers significantly reducing their capital spending
programs. In the United States for the six months ended June 30, 2015,
drilling rig utilization - Operating Day decreased to 39% as compared to
78% in the same period of the prior year, mainly due to reduced activity
resulting from the decreased commodity price environment;
-- For the six month period ended June 30, 2015, well servicing activity
decreased in most of Western's operating areas due to the decreased
commodity price environment, which resulted in service rig utilization
decreasing to 34% for the six months ended June 30, 2015 as compared to
51% for the six months ended June 30, 2014. Despite the significant
decrease in activity, Eagle continued to gain market share in the first
six months of 2015, as the CAODC reported that Eagle worked the third
most Service Hours in the WCSB for the six months ended June 30, 2015,
while comparatively having the sixth largest well servicing rig fleet;
-- For the first six months of 2015, Adjusted EBITDA decreased by $38.7
million (or 46%) to $44.9 million (34% of Operating Revenue), as
compared to $83.6 million (37% of Operating Revenue) in the first six
months of 2014. The decrease in Adjusted EBITDA is due to the decrease
in activity and pricing across all of Western's divisions, partially
offset by Western's cost structure, with approximately 80% of costs
being variable, and effective reductions of fixed overhead costs;
-- For the six months ended June 30, 2015, capital expenditures totalled
$25.6 million and included $18.7 million of expansion capital and $6.9
million of maintenance capital. The majority of the capital expenditures
relate to expansion capital incurred on the completion of Western's 2014
rig build program;
-- For the six months ended June 30, 2015, 456,900 common shares for a
total cost of $2.5 million were repurchased, cancelled and charged to
share capital, or contributed surplus as applicable, under the Company's
normal course issuer bid (the "NCIB"). To July 30, 2015, since the NCIB
was initiated, 628,000 common shares, for a total cost of $3.4 million,
have been repurchased, cancelled and charged to share capital, or
contributed surplus, as applicable.
Selected Financial Information
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(stated in
thousands,
except share
and per
share
amounts)
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Three months ended June 30 Six months ended June 30
Financial
Highlights 2015 2014 Change 2015 2014 Change
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Revenue 32,037 81,981 (61%) 137,887 243,397 (43%)
Operating
Revenue(1) 30,719 77,352 (60%) 131,677 226,979 (42%)
Gross
Margin(1) 10,403 31,206 (67%) 58,294 98,835 (41%)
Gross Margin
as a
percentage
of Operating
Revenue 34% 40% (15%) 44% 44% -
Adjusted
EBITDA(1) 4,255 24,028 (82%) 44,892 83,576 (46%)
Adjusted
EBITDA as a
percentage
of Operating
Revenue 14% 31% (55%) 34% 37% (8%)
Cash flow
from
operating
activities 41,009 71,912 (43%) 80,346 110,546 (27%)
Capital
expenditures 7,688 27,026 (72%) 25,551 46,389 (45%)
Net income
(loss) (12,607) 4,396 (387%) 2,687 29,896 (91%)
-basic net
income
(loss) per
share (0.17) 0.06 (383%) 0.04 0.40 (90%)
-diluted
net income
(loss) per
share (0.17) 0.06 (383%) 0.04 0.40 (90%)
Weighted
average
number of
shares
-basic 74,579,889 74,328,446 - 74,633,065 73,919,531 1%
-diluted 74,591,816 75,733,872 (2%) 74,652,435 75,440,466 (1%)
Outstanding
common
shares as at
period end 74,435,928 74,780,175 - 74,435,928 74,780,175 -
Dividends
declared 5,591 5,609 - 11,184 11,147 -
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(1) See "Non-IFRS measures" included in this press release.
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Three months ended June 30 Six months ended June 30
Operating
Highlights 2015 2014 Change 2015 2014 Change
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Contract Drilling
Canadian
Operations:
Contract drilling
rig fleet:
-Average 49 49 - 49 49 -
-End of period 49 49 - 49 49 -
Operating Revenue
per Revenue Day(1) 20,589 26,285 (22%) 25,015 26,368 (5%)
Operating Revenue
per Operating
Day(1) 22,285 28,632 (22%) 27,570 28,872 (5%)
Operating Days(1) 464 1,529 (70%) 2,617 5,061 (48%)
Drilling rig
utilization -
Revenue Day(1) 11% 37% (70%) 33% 63% (48%)
Drilling rig
utilization -
Operating Day(1) 10% 34% (71%) 30% 57% (47%)
CAODC industry
average
utilization(1)(2) 13% 25% (48%) 24% 42% (43%)
United States
Operations:
Contract drilling
rig fleet:
-Average 5 5 - 5 5 -
-End of period 5 5 - 5 5 -
Operating Revenue
per Revenue Day
(US$)(1) 27,766(3) 25,900 7% 28,888(3) 24,905 16%
Operating Revenue
per Operating Day
(US$)(1) 32,181(3) 28,568 13% 33,118(3) 28,684 15%
Operating Days(1) 142 365 (61%) 356 711 (50%)
Drilling rig
utilization -
Revenue Day(1) 36% 89% (60%) 45% 90% (50%)
Drilling rig
utilization -
Operating Day(1) 31% 80% (61%) 39% 78% (50%)
Production Services
Well servicing rig
fleet:
-Average 66 65 2% 66 65 2%
-End of period 66 65 2% 66 65 2%
Service Rig
Operating Revenue
per Service
Hour(1) 794 800 (1%) 833 814 2%
Service Hours 15,596 23,433 (33%) 40,308 60,242 (33%)
Service rig
utilization(1) 26% 40% (35%) 34% 51% (33%)
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(1) See "Non-IFRS measures" included in this press release.
(2) Source: The Canadian Association of Oilwell Drilling Contractors
("CAODC"). The CAODC industry average is based on Operating Days
divided by total available days.
(3) Excludes shortfall commitment and standby revenue from take or pay
contracts of US$0.7 million and US$4.5 million for the three and six
months ended June 30, 2015 respectively.
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Financial Position at June 30, June 30, Dec 31,
(stated in thousands) 2015 2014 Change 2014 Change
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Working capital 79,618 71,704 11% 78,336 2%
Property and equipment 840,231 796,997 5% 827,306 2%
Total assets 1,025,776 1,016,112 1% 1,057,118 (3%)
Long term debt 264,234 263,293 - 264,165 -
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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 ("US"). Western provides well servicing operations in Canada through Western Energy Services Partnership's (the "Partnership") division, Eagle Well Servicing ("Eagle") and oilfield rental equipment services in Canada through the Partnership's division, Aero Rental Services ("Aero"). Financial and operating results for Horizon and Stoneham are included in Western's contract drilling segment, while Eagle and Aero's financial and operating results are included in Western's production services segment.
Western currently has a drilling rig fleet of 54 rigs specifically suited for drilling horizontal wells of increased complexity. The average age of the drilling rig fleet is approximately seven years. In total, 96% of Western's fleet are Efficient Long Reach ("ELR") drilling rigs with depth ratings greater than 3,000 meters and all of Western's rigs are capable of drilling conventional and unconventional resource based horizontal wells. Conventional resource plays or formations, such as the Cardium in Canada, typically have higher permeability and tend to be less expensive to develop. As a result of the prior exploitation of conventional resource plays, which due to their increased permeability allows oil and natural gas to flow and be extracted more easily, over time production from these resource plays has declined. Unconventional resource plays or formations, such as the Montney and Duvernay in Canada and the Williston basin in the United States, typically have lower permeability and tend to be more expensive to develop. Horizontal drilling and multi zone hydraulic fracturing have continued to improve the access to and development of these unconventional resource plays.
Western is the sixth largest drilling contractor in Canada with a fleet of 49 rigs operating through Horizon. Of the Canadian fleet, 25 are classified as Cardium rigs, 19 as Montney rigs and 5 as Duvernay rigs. As compared to the Cardium classified rigs, Montney rigs have a larger hookload and capacity, while Duvernay rigs have the largest hookload and capacity. Additionally, Western has five ELR triple drilling rigs deployed in the United States operating through Stoneham. Western is also the sixth largest well servicing company in Canada with a current fleet of 66 rigs operating through Eagle. Western's well servicing rig fleet is one of the newer fleets in the WCSB, with an average age of approximately six years. Western's oilfield rental equipment division, which operates through Aero, provides oilfield rental equipment for frac services, well completions and production work, coil tubing services and drilling.
Crude oil and natural gas prices impact the cash flow of Western's customers, which in turn impacts the demand for Western's services. Overall performance of the Company continued to be affected by the decline in crude oil and natural gas prices for the three and six months ended June 30, 2015. While crude oil prices were strong in the first six months of 2014, they weakened significantly in the last half of 2014 and into the first half of 2015. Partially offsetting the decline in crude oil and natural gas prices for Western's Canadian customers was the strengthening of the US dollar in comparison to the Canadian dollar. The following table summarizes the average oil and natural gas prices, as well as the average foreign exchange rates for the three and six months ended June 30, 2015 and 2014.
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Three months ended Six months ended
June 30 June 30
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2015 2014 Change 2015 2014 Change
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Average oil and natural gas
prices(1)
Oil
West Texas Intermediate
(US$/bbl) 57.87 102.99 (44%) 53.22 100.84 (47%)
Western Canadian Select
(CDN$/bbl) 56.76 91.34 (38%) 49.96 88.58 (44%)
Natural Gas
30 day Spot AECO (CDN$/mcf) 2.68 4.70 (43%) 2.71 5.14 (47%)
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Average foreign exchange
rates
US dollar to Canadian dollar 1.23 1.09 13% 1.24 1.10 13%
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(1) See "Abbreviations" included in this press release.
The significant reduction in commodity prices has resulted in a corresponding decrease in the demand for oilfield services in both Canada and the United States. The CAODC reported that, in Canada, the total number of Operating Days in the WCSB decreased approximately 59% and 49% for the three and six months ended June 30, 2015 respectively, as compared to the same periods in the prior year. Similarly, as reported by Baker Hughes Incorporated, the average number of active drilling rigs in the United States decreased approximately 51% and 37% respectively, for the three and six months ended June 30, 2015, as compared to the three and six months ended June 30, 2014. Well servicing hours were also impacted by the decline in demand, as the CAODC reported that Service Hours in the WCSB decreased approximately 33% and 36% respectively, for the three and six months ended June 30, 2015, as compared to the same periods in the prior year.
Outlook
Currently, 9 of Western's 54 drilling rigs (or 17%) are operating under long term take-or-pay contracts providing a base level of future revenue, with 3 of these contracts expected to expire in each of 2015, 2016 and 2017 respectively. These contracts each 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 each typically generate between 330 to 365 Revenue Days per year.
Western's revised capital budget for 2015 remains unchanged at approximately $42 million, comprised of $23 million of expansion capital and $19 million of maintenance capital. The following table summarizes the 2015 revised capital budget, the capital spending incurred for the six months ended June 30, 2015 and the remaining capital budget expected to be incurred throughout the remainder of 2015:
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Six months ended
June 30, 2015
Capital Expenditures Revised 2015 Capital Capital Budget
(stated in millions) Budget Expenditures Remaining
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Expansion 23 (19) 4
Maintenance 19 (7) 12
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Total Capital
Expenditures 42 (26) 16
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Expansion capital 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 carried forward from the 2014 capital budget. In addition, expansion capital includes $3 million related to the purchase of additional oilfield rental equipment. Spending on maintenance capital is weighted to the second half of 2015, which provides additional flexibility to allow for adjustments if market conditions change. 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. Western will continue to evaluate and expand its operations in a disciplined manner and make any required adjustments to its capital program when customer demand improves.
The continued pressure on crude oil and natural gas prices has resulted in reductions to the capital spending plans for the majority of Western's customers. In some cases, the capital spending reductions have been significant. The extremely low activity in the second quarter of 2015 has generally resulted in a slower start to the summer drilling programs for many of Western's customers. As a result, active drilling rig counts in both Canada and the United States are currently at, or near, five year lows for third quarter activity. Activity levels throughout the oilfield services industry for the remainder of 2015 are expected to be significantly lower as compared to the second half of 2014, when higher commodity prices and strong customer budgets supported increased utilization and a strong pricing environment across all of Western's business lines. Lower activity and pricing pressure will impact Western's Adjusted EBITDA and cash flow from operating activities in 2015. Western's variable cost structure, under which approximately 80% of operating and administrative costs are variable, and a prudent capital budget will aid in preserving balance sheet strength. At June 30, 2015, Western's Net Debt to trailing 12 month Adjusted EBITDA ratio was 1.3. In addition to $83.6 million in cash and cash equivalents at June 30, 2015, Western has $175 million available on the Company's revolving credit facility (the "Revolving Facility"), which does not mature until December 17, 2018, $20 million available on the Company's operating demand revolving loan (the "Operating Facility"), and no principal repayments due on the $265 million senior unsecured notes (the "Senior Notes") until they mature on January 30, 2019. As such, Western is well positioned to manage the current slowdown in activity and maintain its 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 customer spending constraints as a result of lower commodity prices and the challenge to retain skilled labour. Western's view is that its modern drilling and well servicing rig fleets, strong customer base and solid reputation provide a competitive advantage which will enable the Company to attract and retain skilled labour, continue its growth strategy and maintain its higher than industry average utilization.
Quarterly Dividend
On July 30, 2015, Western's Board of Directors declared a quarterly dividend of $0.075 per share, which will be paid on October 15, 2015, to shareholders of record at the close of business on September 30, 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.
Non-IFRS Measures
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 condensed consolidated financial statements 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. These Non-IFRS measures are identified and defined as follows:
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 such as rig fuel, which at the customer's request may be paid for initially by Western, then recharged in its entirety to Western's customers.
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 condensed consolidated statements of operations and comprehensive income, to Operating Revenue and Gross Margin:
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Three months ended Six months ended
June 30 June 30
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(stated in thousands) 2015 2014 2015 2014
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Operating Revenue
Drilling 16,746 55,148 92,353 168,493
Production Services 14,004 22,946 39,577 59,494
Less: inter-company eliminations (31) (742) (253) (1,008)
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30,719 77,352 131,677 226,979
Third party charges 1,318 4,629 6,210 16,418
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Revenue 32,037 81,981 137,887 243,397
Less: operating expenses (28,710) (62,299) (100,185) (174,188)
Add:
Depreciation - operating 6,884 11,329 20,249 29,209
Stock based compensation -
operating 192 195 343 417
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Gross Margin 10,403 31,206 58,294 98,835
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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 incurred in the period.
The following table provides a reconciliation of net income under IFRS, as disclosed in the condensed consolidated statements of operations and comprehensive income, to earnings before interest and finance costs, taxes and depreciation and amortization ("EBITDA"), Adjusted EBITDA and Operating Earnings:
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Three months ended Six months ended
June 30 June 30
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(stated in thousands) 2015 2014 2015 2014
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Net income (loss) (12,607) 4,396 2,687 29,896
Add:
Finance costs 4,763 5,327 9,521 10,730
Income taxes 4,550 1,940 10,972 11,002
Depreciation - operating 6,884 11,329 20,249 29,209
Depreciation - administrative 485 439 914 884
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EBITDA 4,075 23,431 44,343 81,721
Add:
Stock based compensation -
operating 192 195 343 417
Stock based compensation -
administrative 807 289 1,619 836
Other items (819) 113 (1,413) 602
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Adjusted EBITDA 4,255 24,028 44,892 83,576
Subtract:
Depreciation - operating (6,884) (11,329) (20,249) (29,209)
Depreciation - administrative (485) (439) (914) (884)
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Operating Earnings (loss) (3,114) 12,260 23,729 53,483
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Net Debt
The following table provides a reconciliation of long term debt under IFRS, as disclosed in the condensed consolidated balance sheets to Net Debt:
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June 30, December 31,
(stated in thousands) 2015 2014
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Long term debt 264,234 264,165
Current portion of long term debt 1,004 1,062
Less cash and cash equivalents (83,572) (62,662)
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Net Debt 181,666 202,565
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Drilling rig utilization - Operating Day: Calculated based on Operating Days divided by total available days.
Drilling rig utilization - Revenue Day: Calculated based on Revenue Days divided by total available days.
Operating Days: Defined as contract drilling days, calculated on a spud to rig release basis.
Revenue Days: Defined as Operating Days plus rig mobilization days.
Service Hours: Defined as actual well servicing hours completed.
Service rig utilization: Calculated based on Service Hours divided by available hours, being 10 hours per day, per well servicing rig, 365 days per year.
Abbreviations:
-- Barrels ("bbl");
-- Basis point ("bps"): A 1% change equals 100 basis points and a 0.01%
change is equal to one basis point;
-- Canadian Association of Oilwell Drilling Contractors ("CAODC");
-- International Financial Reporting Standards ("IFRS");
-- Thousand cubic feet ("mcf");
-- West Texas Intermediate ("WTI");
-- Western Canadian Sedimentary Basin ("WCSB"); and
-- Western Canadian Select ("WCS").
2015 Second Quarter Results Conference Call and Webcast
Western has scheduled a conference call and webcast to begin at 10:00 a.m. MST (12:00 p.m. EST) on Friday, July 31, 2015.
The conference call dial-in number is 1-866-223-7781.
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 August 14, 2015 by dialing 1-800-408-3053 or 905-694-9451, passcode 6011581.
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 declaration of dividends; 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 ability to adjust capital spending in the second half of 2015 if market conditions change; 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 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 significant customers; 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 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.
Contacts:
Western Energy Services Corp.
Alex R.N. MacAusland
President and CEO
403.984.5916
403.984.5917 (FAX)
Western Energy Services Corp.
Jeffrey K. Bowers
Senior VP Finance and CFO
403.984.5916
403.984.5917 (FAX)
www.wesc.ca
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