/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Dec. 5, 2012 /CNW/ - Cathedral Energy Services Ltd. (the "Company" or
"Cathedral" / TSX: CET) is expecting to exit 2012 with a fleet of 136 (2011 -
125) Measurement-While-Drilling ("MWD") systems and 69 (2011 - 62) frac
flowback units. Based upon customer feedback and bookings to date, Cathedral
is expecting to experience a significant increase in operating activities from
those experienced in 2012 Q3 and Q4. The equipment acquired to date,
provides a solid base of equipment to service the Company's activity levels in
The Company's Board of Directors have approved an initial 2013 capital budget
of $22 million which includes $10 million of growth capital expenditures and
$12 million of maintenance capital expenditures.
The Directional Drilling division is expected to incur $7 million of growth
capital expenditures and $12 million of maintenance capital expenditures.
Growth capital expenditures will include the addition of mud motors and drill
collars for the expected expansion of Company's Houston and Oklahoma City
operation bases and the commencement of the build-out of the Company's At-Bit
Technology system. The At-Bit Technology system allows for MWD measurements
that are sourced from directly behind the drill bit. This reduces
directional drilling risk in critical hole sections and helps to accurately
land well bores. Maintenance capital expenditures is expected to allow for:
1) expanded rollout of the Company's enhanced Fusion MWD platform electronics;
2) addition of mud pulse transmitters to the fleet to allow for expanded
Fusion MWD platform capabilities; 3) continued conversion to Cathedral's
proprietary mud motor bearing section; and 4) expansion of mud motor power
section fleet to accommodate extended repair times and new configurations
requested by customers.
The Production Testing division anticipates incurring $3 million of growth
capital expenditures by way of adding 3 frac flowback units and related
ancillary equipment. This equipment is expected to be utilized in the
Company's expansion of its Production Testing division into the Eagleford
(Texas) resource play.
Cathedral intends to finance its initial 2013 capital budget from cash flow
from operations and, if necessary, its existing credit facility.
Cathedral believes its continuous improvement in technologies, service
delivery and cost efficiencies will differentiate it from its competitors, now
and in the future.
It is management's expectation to maintain Cathedral's per share dividend at
its current rate of $0.075 per quarter or $0.30 per year.
The Company continues to actively repurchase its common shares pursuant to a
Normal Course Issuer Bid. To date, the Company has repurchased 673,077
common shares at an average cost of $5.29 per common share.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable Canadian
securities laws. All statements other than statements of present or
historical fact are forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"anticipate", "achieve", "believe", "plan", "intend", "objective",
"continuous", "ongoing", "estimate", "outlook", "expect", "may", "will",
"project", "should" or similar words suggesting future outcomes. In
particular, this news release contains forward-looking statements relating to,
among other things: projected capital expenditures and the financing thereof;
areas of further growth; activity levels; U.S. expansion and expected dividend
level. The Company believes the expectations reflected in such forward-looking
statements are reasonable as of the date hereof but no assurance can be given
that these expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing
conclusions or making the forecasts or projections set out in forward-looking
statements. Those material factors and assumptions are based on information
currently available to the Company, including information obtained from third
party industry analysts and other third party sources. In some instances,
material assumptions and material factors are presented elsewhere in this news
release in connection with the forward-looking statements. You are cautioned
that the following list of material factors and assumptions is not
exhaustive. Specific material factors and assumptions include, but are not
-- the performance of the Company's businesses, including current
business and economic trends;
-- oil and natural gas commodity prices and production levels;
-- capital expenditure programs and other expenditures by the
Company and its customers;
-- the ability of the Company to retain and hire qualified
-- the ability of the Company to obtain parts, consumables,
equipment, technology, and supplies in a timely manner to carry
out its activities;
-- the ability of the Company to maintain good working
relationships with key suppliers;
-- the ability of the Company to market its services successfully
to existing and new customers;
-- the ability of the Company to obtain timely financing on
-- currency exchange and interest rates;
-- risks associated with foreign operations including Venezuela;
-- the ability of the Company to realize the benefit of its
conversion from an income trust to a corporation;
-- risks associated with finalizing ancillary joint venture
agreements that are required prior to the commencement of
operations of the Venezuela joint venture;
-- risks associated with Venezuela joint venture company being
awarded work by the Venezuela state run oil and natural gas
-- changes under governmental regulatory regimes and tax,
environmental and other laws in Canada, United States ("U.S.")
and Venezuela; and
-- a stable competitive environment.
Forward-looking statements are not a guarantee of future performance and
involve a number of risks and uncertainties some of which are described
herein. Such forward-looking statements necessarily involve known and
unknown risks and uncertainties, which may cause the Company's actual
performance and financial results in future periods to differ materially from
any projections of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include, but are
not limited to, the risks identified in this news release and in the Company's
Annual Information Form under the heading "Risk Factors". Any
forward-looking statements are made as of the date hereof and, except as
required by law, the Company assumes no obligation to publicly update or
revise such statements to reflect new information, subsequent or otherwise.
All forward-looking statements contained in this news release are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in the Company's current
Annual Information Form and Annual Report which have been filed with Canadian
provincial securities commissions and are available on www.sedar.com.
Cathedral Energy Services Ltd. (the "Company"/"Cathedral") and its wholly
owned subsidiary, Cathedral Energy Services Inc., are engaged in the business
of providing selected oilfield services to oil and natural gas companies in
western Canada and selected oil and natural gas basins in the United States.
The Company is in the process of establishing operations in Venezuela for
providing directional drilling services through its wholly owned subsidiaries
Directional Plus International Ltd. and Directional Plus de Venezuela, C.A.
The Company's operating activities are divided into directional drilling and
production testing business units. The Company's shares trade on the TSX
under the symbol: CET. For more information, visit
Requests for further information should be directed to:
Mark L. Bentsen, President and Chief Executive Officer or P. Scott
MacFarlane, Chief Financial Officer
Cathedral Energy Services Ltd., 6030 - 3rd Street S.E., Calgary, Alberta T2H
SOURCE: Cathedral Energy Services Ltd.
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CO: Cathedral Energy Services Ltd.
-0- Dec/05/2012 21:14 GMT
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