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Essential Energy Services Announces 2014 Capital Budget

Essential Energy Services Announces 2014 Capital Budget 
CALGARY, ALBERTA -- (Marketwired) -- 10/23/13 -- Essential Energy
Services Ltd. (TSX:ESN) ("Essential" or the "Company") announces the
2014 capital budget of $50 million comprised of $33 million of growth
capital and $17 million of maintenance capital.  
"Given the anticipated demand from our customers for long-reach coil
tubing, and the challenges the service industry has faced delivering
this equipment to the market, Essential has entered into long-term
build programs with two leading fabricators to deliver deep coil
tubing rigs in 2014, 2015 and 2016," said Garnet Amundson, President
and Chief Executive Officer.  
2014 Capital Budget 
Essential's 2014 growth capital spending is anticipated to consist
primarily of the following: 


 
--  Three Generation IV masted deep coil tubing rigs, built by Option
    Industries Inc. ("Option"); 
--  One Generation III masted deep coil tubing rig, built by National
    Oilwell Varco ("NOV"); 
--  One quintiplex fluid pumper; 
--  One rod rig; and 
--  Rental equipment.

 
With a coil diameter of 2 5/8", the Generation III rigs can reach
4,900 meters and the Generation IV rigs can reach 6,400 meters.  
"We are excited about the new Generation III and Generation IV masted
deep coil tubing rigs," said Mr. Amundson. "By the end of 2014 we
will have seven new state-of-the-art Generation III/IV deep masted
coil rigs. These rigs have the capability to work on long-reach
horizontal wells and are well-suited to work in deep, high pressure
basins including the Montney, Horn River and Duvernay which are
expected to supply proposed liquefied natural gas ("LNG") export
facilities in British Columbia."  
The 2014 capital budget is expected to be funded from operating cash
flow and as required, the credit facility. Essential will monitor
industry conditions into 2014 and may adjust the capital program if
appropriate. 
2015 Capital Plans 
In addition to the coil tubing rigs in the 2014 capital budget,
Essential has arrangements to build one Generation III masted deep
coil tubing rig and three Generation IV masted deep coil tubing rigs
to be delivered in 2015 and 2016. The 2014 capital budget includes
deposits that will be required for the 2015 build program. 
2013 
Capital Spending 
Essential has increased its announced 2013 capital spending budget
from $45 million to $50 million to include deposits and progress
payments payable in 2013 for the 2014 build program. The $50 million
estimated 2013 capital spend is expected to include $37 million for
growth capital and $13 million for maintenance capital. In the third
quarter, Essential took delivery of one Generation III deep masted
coil tubing rig from Surefire Industries ("Surefire"). Surefire was
placed into receivership in September 2013 so Essential will not take
delivery of the remaining two coil tubing rigs that it had placed
deposits on in 2011.  
In the fourth quarter, 2013, Essential expects to take delivery of: 


 
--  One Generation III deep masted coil tubing rig from NOV; 
--  Two Generation IV deep masted coil tubing rigs from Option; 
--  Two mobile free standing, all period double service rigs, one of which
    is SAGD capable; and 
--  One rod rig. 

 
Equipment Count  
Essential anticipates the following equipment count after completion
of 2013 and 2014 capital spending plans:  


 
---------------------------------------------------------------------------
                                                           Timing          
               2012     2013 Net  Forecast      2014           of  Forecast
             Actual Additions(1) Dec 31/13 Additions Additions(2) Dec 31/14
---------------------------------------------------------------------------
Coil tubing -                                                              
 deep            27            3        30         3   Q2, Q3, Q4        33
---------------------------------------------------------------------------
Coil tubing -                                                              
 other           19          (1)        18         0                     18
Coil tubing -                                                              
 total           46            2        48         3                     51
---------------------------------------------------------------------------
                                                                           
---------------------------------------------------------------------------
Nitrogen                                                                   
 pumpers         13            2        15         0                     15
---------------------------------------------------------------------------
Fluid pumpers    18            0        18         1           Q3        19
---------------------------------------------------------------------------
Service rigs     55            0        55         0                     55
---------------------------------------------------------------------------
Rod rigs         14          (1)        13         1           Q4        14
---------------------------------------------------------------------------
 
1.  2013 additions are net of the following retirements: two deep coil
    tubing rigs, four service rigs and two rod rigs.  
2.  Delivery of one coil tubing rig from the 2014 build program is expected
    in Q2/15.

 
ABOUT ESSENTIAL  
Essential is a growth-oriented, dividend paying corporation that
provides oilfield services to producers in western Canada for
producing wells and new drilling activity. Essential operates the
largest coil tubing well service fleet in Canada with 45 coil tubing
rigs and a fleet of 54 service rigs. Essential also sells, rents and
services downhole tools and equipment including the Tryton
Multi-Stage Fracturing System. Further information can be found at
www.essentialenergy.ca. 
READER ADVISORY  
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect", "anticipate",
"continue", "estimate", "objective", "ongoing", "may", "will",
"project", "should", "believe", "plans", "intends" and similar
expressions are intended to identify forward-looking information or
statements. In particular, this news release contains forward-looking
statements including expectations regarding current year capital
spending, future capital spending, in-service dates of new equipment,
capabilities of the new equipment, expectations regarding supply
areas for proposed LNG facilities, customer demand and the type of
oilfield services required, possible future adjustments to the budget
and plans to fund the capital spending with operating cash flow and
the credit facility.  
Although the Company believes that the expectations and assumptions
on which such forward-looking statements and information are
reasonable, undue reliance should not be placed on the
forward-looking statements and information because the Company can
give no assurance that such statements and information 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 risks associated with the oilfield services
sector (e.g. demand, pric
ing and terms for oilfield services; current
and expected oil and natural gas prices; exploration and development
costs and delays; reserves discovery and decline rates; pipeline and
transportation capacity; weather, health, safety and environmental
risks); competition, and uncertainties resulting from potential
delays or changes in plans with respect to development projects or
capital expenditures and changes in legislation, including but not
limited to tax laws, royalties, incentive programs and environmental
regulations; stock market volatility and the inability to access
sufficient capital from external and internal sources; the ability of
the Company's subsidiaries to enforce legal rights in foreign
jurisdictions; general economic, market or business conditions;
global economic events; changes to Essential's financial position and
cash flow; the availability of qualified personnel, management or
other key inputs; currency exchange fluctuations; changes in
political and security stability; and other unforeseen conditions
which could impact the use of services supplied by the Company.
Accordingly, readers should not place undue reliance on the
forward-looking statements. Readers are cautioned that the foregoing
list of factors is not exhaustive. 
Additional information on these and other factors that could affect
the Company's financial results are included in reports on file with
applicable securities regulatory authorities and may be accessed
through the SEDAR website (www.sedar.com) for the Company. The
forward-looking statements and information contained in this news
release are made as of the date hereof and the Company undertakes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws. 
The TSX has neither approved nor disapproved the contents of this
press release.
Contacts:
Essential Energy Services Ltd.
Garnet K. Amundson
President and CEO
(403) 513-7272
service@essentialenergy.ca 
Essential Energy Services Ltd.
Karen Perasalo
Investor Relations
(403) 513-7272
service@essentialenergy.ca
 
 
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