Trican Well Service Ltd. Q1 2014 Update and Outlook

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Trican Well Service Ltd. 
TSX SYMBOL:  TCW 
MARCH 31, 2014 
Trican Well Service Ltd. Q1 2014 Update and Outlook 
CALGARY, ALBERTA--(Marketwired - March 31, 2014) - Trican Well Service Ltd.
("Trican", the "Company", "we" or
"our") (TSX:TCW) anticipates that consolidated financial results for
the first quarter of 2014 will be negatively impacted by pricing pressure and
cost inflation in Canada and unfavorable weather conditions in the United
States.  
We estimate consolidated operating income(i) for the first quarter of 2014 to
be between $30 million and $40 million. This estimate is subject to completion
of our first quarter interim financial report, which we expect to release on
May 7, 2014. Our Audit Committee has reviewed the financial outlook and
information provided in this document. 
Canadian Operations 
We expect first quarter 2014 Canadian operating income to be up slightly
compared to the fourth quarter of 2013 on higher revenue and activity levels,
offset partially by lower operating margins. Canadian financial results for the
first quarter of 2014 are expected to be negatively impacted by continued
pricing pressure in the region. Equipment utilization has been very strong
throughout the first quarter; however, lower pricing experienced at the end of
the fourth quarter in 2013 has been carried throughout all of the first quarter
of 2014. As a result, first quarter Canadian pricing is expected to be down
slightly on a sequential basis.  
Additionally, cost increases for fuel and third party hauling are expected to
have a negative impact on first quarter Canadian operating margins. As a
percentage of revenue, fuel and third party hauling expenses are consistent
with the fourth quarter of 2013, but are up substantially compared to the first
quarter of 2013. A weaker Canadian dollar, both sequentially and
year-over-year, is also expected to have a negative impact on operating margins
as a portion of our Canadian materials and operating costs are incurred in U.S.
dollars.  
Despite the disappointing first quarter results in Canada, our outlook for this
region remains positive. Cash flows for our customers are expected to increase
due to higher commodity prices combined with a strengthening U.S. dollar, which
we expect will lead to higher year-over-year activity in the second half of
2014. With strong Canadian activity levels anticipated for the second half of
2014, we expect to implement a pricing increase in the second quarter that will
be phased in for third quarter work programs. Rising costs combined with lower
pricing have led to Canadian financial results that are below our return on
capital targets and we believe that a price increase is needed and justified
given the current operating environment in Canada. 
US Operations  
Weather related operational delays for our U.S. fracturing crews in the
Marcellus, Oklahoma and Permian regions negatively impacted equipment
utilization and financial results for January and February. Despite these
delays, first quarter U.S. financial results are expected to increase
sequentially due to utilization improvements across several of our U.S.
regions; however, operating income, while improved relative to the fourth
quarter of 2013, is still expected to be slightly negative. Activity and
utilization for March has been strong for our U.S. operations and we believe
this indicates improving fundamentals for this region. We have also seen
operational improvements for our U.S. business during the first quarter that
are positively impacting our U.S. equipment utilization. As a result, we expect
to see sequential improvements in U.S. operating margins throughout 2014. 
International Operations  
Russia and Kazakhstan comprise the majority of our international results, and
financial results for the first quarter of 2014 are projected to meet
expectations. As expected, activity in Russia has been negatively impacted by
cold weather throughout most of January and February; however, first quarter
Russian financial results are expected to be consistent with the first quarter
of 2013. In addition, first quarter international results are expected to be
negatively impacted by start-up costs in Saudi Arabia and Colombia as we will
not be completing our first jobs in these regions until early in the second
quarter. We have been awarded contracts in these regions and will be looking to
add additional contracts as the year progresses. 
(i) Operating income is a measure that is not recognized under International
Financial Reporting Standards (IFRS). Management of Trican believes that
operating income is a useful supplemental measure. Operating income provides
investors with an indication of earnings before depreciation, foreign exchange,
other income (loss), taxes and interest. Investors should be cautioned that
operating income should not be construed as an alternative to net income (loss)
and cash flow from operations determined in accordance with IFRS as an
indicator of Trican's performance. Trican's method of calculating
operating income may differ from that of other companies and accordingly may
not be comparable to measures used by other companies.  
FORWARD-LOOKING INFORMATION 
This document contains certain forward-looking information and financial
outlook or future orientated financial information based on Trican's
current expectations, estimates, projections and assumptions that were made by
the Company in light of information available at the time the statement was
made. Forward-looking information and financial outlook or future orientated
financial information that address expectations or projections about the
future, and other statements and information about the Company's strategy
for growth, expected and future expenditures, costs, operating and financial
results, future financing and capital activities are forward-looking
statements. Some forward-looking information and financial outlook or future
orientated financial information are identified by the use of terms and phrases
such as "anticipate," "achieve", "achievable,"
"believe," "estimate," "expect,"
"intention", "plan", "planned", and other similar
terms and phrases. This forward-looking information and financial outlook or
future orientated financial information speak only as of the date of this
document, other than the update in respect of our first quarter earnings per
share and operating income that will be provided upon the release of our
complete financial results for the first quarter of 2014, and we do not
undertake to publicly update this forward-looking information and financial
outlook or future orientated financial information except in accordance with
applicable securities laws. This forward-looking information and financial
outlook or future orientated financial information includes, among others: 
/T/ 
--  The expectation that consolidated financial results for the first 
quarter of 2014 will be negatively impacted by pricing pressure and cost 
inflation in Canada and unfavorable weather conditions in the United 
States; 
--  The expectation that consolidated operating income for the first quarter 
of 2014 will be between $30 million and $40 million; 
--  The expectation that our first quarter interim financial report will be 
released on May 7, 2014; 
--  The expectation that first quarter 2014 Canadian operating income will 
be up slightly compared to the fourth quarter of 2013 on higher revenue 
and activity levels, offset partially by lower operating margins; 
--  The expectation that Canadian financial results for the first quarter of 
2014 will be negatively impacted by continued pricing pressure in the 
region; 
--  The expectation that first quarter Canadian pricing will be down 
slightly on a sequential basis; 
--  The expectation that cost increases for fuel and third party hauling 
will have a negative impact on first quarter Canadian operating margins;
--  The expectation that a weaker Canadian dollar, both sequentially and 
year-over-year, will have a negative impact on Canadian operating 
margins; 
--  The expectation that cash flows for our customers will increase due to 
higher commodity prices combined with a strengthening U.S. dollar; 
--  The expectation that higher cash flows for our Canadian customers will 
lead to higher year-over-year Canadian activity in the second half of 
2014; 
--  The expectation that we will implement a pricing increase in the second 
quarter that will be phased in for third quarter work programs; 
--  The belief that a price increase is needed and justified given the 
current operating environment in Canada; 
--  The expectation that, despite weather-related delays, first quarter U.S. 
financial results will increase sequentially due to utilization 
improvements across several of our U.S. regions; 
--  The expectation that U.S. operating income, while improved relative to 
the fourth quarter of 2013, will be slightly negative; 
--  The belief that strong activity and utilization for our U.S. operations 
in March indicates improving fundamentals for this region; 
--  The expectations that in U.S. operating margins will improve 
sequentially throughout 2014; 
--  The expectation that financial results for our Russian and Kazakhstan 
regions will meet expectations; 
--  The expectation that Russian financial results will be consistent with 
the first quarter of 2013; 
--  The expectation that first quarter international results will be 
negatively impacted by start-up costs in Saudi Arabia and Colombia as we 
will not be completing our first jobs in these regions until early in 
the second quarter; 
--  The intention to add contracts in Saudi Arabia and Colombia as the year 
progresses.   
/T/ 
Forward-looking information and financial outlook or future orientated
financial information is based on current expectations, estimates, projections
and assumptions, which we believe are reasonable but which may prove to be
incorrect. Trican's actual results may differ materially from those
expressed or implied and therefore such forward-looking information and
financial outlook or future orientated financial information should not be
unduly relied upon. In addition to other factors and assumptions which may be
identified in this document, assumptions have been made regarding, among other
things: industry activity; the general stability of the economic and political
environment; effect of market conditions on demand for the Company's
products and services; the ability to obtain qualified staff, equipment and
services in a timely and cost efficient manner; the ability to operate its
business in a safe, efficient and effective manner; the performance and
characteristics of various business segments; the effect of current plans; the
timing and costs of capital expenditures; future oil and natural gas prices;
currency, exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in which the
Company operates; and the ability of the Company to successfully market its
products and services. 
Forward-looking information and financial outlook or future orientated
financial information is subject to a number of risks and uncertainties, which
could cause actual results to differ materially from those anticipated. These
risks and uncertainties include: fluctuating prices for crude oil and natural
gas; changes in drilling activity; general global economic, political and
business conditions; weather conditions; regulatory changes; the successful
exploitation and integration of technology; customer acceptance of technology;
success in obtaining issued patents; the potential development of competing
technologies by market competitors; and availability of products, qualified
personnel, manufacturing capacity and raw materials. The foregoing important
factors are not exhaustive. In addition, actual results could differ materially
from those anticipated in forward-looking information and financial outlook or
future orientated financial information provided herein as a result of the risk
factors set forth under the section entitled "Risks Factors" in our
Annual Information Form dated March 21, 2014. Readers are also referred to the
risk factors and assumptions described in other documents filed by the Company
from time to time with securities regulatory authorities.  
Any financial outlook or future oriented financial information in this
document, as defined by applicable securities legislation, has been approved by
management. Such financial outlook or future oriented financial information is
based on assumptions that management believes to be reasonable under the
circumstances and is provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be appropriate
for other purposes. 
Additional information regarding Trican including Trican's most recent
annual information form is available under Trican's profile on SEDAR
(www.sedar.com). 
Headquartered in Calgary, Alberta, Trican has operations in Canada, the United
States, Russia, Kazakhstan, Australia, Algeria, Norway, Colombia and Saudi
Arabia. Trican provides a comprehensive array of specialized products,
equipment and services that are used during the exploration and development of
oil and gas reserves. 
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FOR FURTHER INFORMATION PLEASE CONTACT: 
Requests for shareholder information should be directed to:
Trican Well Service Ltd.
Dale Dusterhoft
Chief Executive Officer
ddusterhoft@trican.ca
or
Trican Well Service Ltd.
Michael Baldwin
Senior Vice President, Finance & CFO
mbaldwin@trican.ca
or
Trican Well Service Ltd.
Gary Summach
Director of Reporting and Investor Relations
gsummach@trican.ca
or
Trican Well Service Ltd.
2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8
(403) 266 - 0202
(403) 237 - 7716
www.trican.ca 
INDUSTRY:  Energy and Utilities - Equipment, Energy and Utilities - Oil and Gas 
SUBJECT:  ERN 
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-0- Mar/31/2014 20:12 GMT
 
 
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