Secure Energy Services Inc. Announces Strategic Acquisition of Predator
NEWS RELEASE TRANSMITTED BY Marketwired
FOR: Secure Energy Services Inc.
TSX SYMBOL: SES
AUGUST 12, 2014
Secure Energy Services Inc. Announces Strategic Acquisition of Predator
CALGARY, ALBERTA--(Marketwired - Aug. 12, 2014) - SECURE Energy Services Inc.
("Secure" or the "Corporation") (TSX:SES) is pleased to
announce that it has entered into an agreement to acquire all of the assets of
Predator Midstream Ltd. ("Predator") for an aggregate purchase price
of approximately $107 million, subject to certain customary closing conditions.
Summary of the Acquisition
Predator is a privately owned company headquartered in Calgary, Alberta.
Predator owns and operates three existing transloading rail terminals located
in Alberta at Mannville, Alliance and High Prairie. Predator transloads crude
oil from truck to rail and has the ability to offer the customer access to its
current fleet of 275 rail cars. Predator has well established relationships
with both producers and refiners which have contributed to its successful
growth as it provides Canadian oil producers access to high value markets.
Predator's management team has demonstrated the ability to execute on
capital projects and has earned a reputation as a leader in moving crude by
rail for Canadian oil producers. The Predator management team is led by CEO and
founder, Joel MacLeod. Mr. MacLeod, along with his management and operational
team will continue to operate the day-to-day business.
Total consideration for the Predator acquisition is $107 million, subject to
certain closing adjustments. The purchase price is being paid with $65 million
in cash and the balance of $42 million through the issuance of common shares of
SECURE. Closing is expected to occur on or about August 15, 2014.
The expected range for Predator's contribution to consolidated EBITDA,
adjusted for an August 15, 2014 closing date, for the remainder of 2014 is
anticipated to be in the range of approximately $5 to $7 million. The expected
2015 annualized run rate EBITDA is anticipated to be in the range of
approximately $17 to $20 million reflecting full year utilization of assets put
into operations during 2014.
The strategic acquisition of Predator further strengthens SECURE's
midstream infrastructure by offering SECURE customer's enhanced market
access at the field level and to downstream markets.Transporting crude oil by
rail continues to become more prevalent with many crude oil producers due to
pipeline constraints. The addition of Predator's three transloading
terminals to SECURE's Full Service Rail ("FSR") offering
provides an immediate rail facility network that complements SECURE's
pipeline connected Full Service Terminals ("FST"). In addition to
their existing transloading terminals, Predator has numerous midstream projects
in various stages of development that are in alignment with SECURE's
midstream growth strategy.
We are pleased to welcome Predator's experienced management and
operational staff to Secure. "The acquisition of Predator is an exciting
addition that complement's Secure's existing midstream
infrastructure" states Rene Amirault, Chairman, President and Chief
Executive Officer of Secure. "This acquisition further enhances our
service offering allowing our customers to access an expanded network of
facilities. With continued restrictions on available pipeline access, Predator
and Secure are aligned that it is imperative we provide our customers with the
most efficient, safe and cost effective solution to moving their crude oil to
"The entire Predator Team is excited to become an integral part of Secure
where there will be both immediate and long term synergies for the combined
entity. We plan to continue to aggressively develop and expand market access
for producers and refiners through our rail network" states Joel Macleod,
President and Chief Executive Officer of Predator.
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 three divisions:
Processing, Recovery and Disposal Division ("PRD"): The PRD division
owns and operates midstream infrastructure that provides processing, storing,
shipping and marketing of crude oil, oilfield waste disposal and recycling.
Specifically these services are clean oil terminalling and rail transloading,
custom treating of crude oil, crude oil marketing, produced and waste water
disposal, oilfield waste processing, landfill disposal, and oil purchase/resale
service. Secure currently operates a network of facilities throughout western
Canada and in North Dakota, providing these services at its full service
terminals, landfills and stand-alone water disposal facilities.
Drilling Services Division ("DS"): The DS division provides equipment
and chemicals for building, maintaining, processing and recycling of drilling
and completion fluids. The drilling fluids service line comprises the majority
of the revenue for the division which includes the design and implementation of
drilling fluid systems for producers drilling for oil, bitumen and natural gas.
The DS division focuses on providing products and systems that are designed for
more complex wells, such as medium to deep wells, horizontal wells and
horizontal wells drilled into the oil sands.
OnSite Division ("OS"): The operations of the OS division include
environmental services which provide pre-drilling assessment planning, drilling
waste management, remediation and reclamation assessment services, laboratory
services, and "CleanSite" waste container services; integrated fluid
solutions which include water management, recycling, pumping and storage
solutions; and projects which include pipeline integrity (inspection,
excavation, repair, replacement and rehabilitation); demolition and
decommissioning and reclamation and remediation of former wellsites,
facilities, commercial and industrial properties.
Forward Looking Statements
Certain statements contained in this document constitute "forward-looking
statements" and/or "forward-looking information" and/or
"financial outlooks" 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. Forward-looking statements included
or implied in this news release may include, but are not limited to: the
acquisition of the assets of Predator by SECURE; the anticipated closing date;
EBITDA of Predator; EBITDA contribution of the Predator assets to SECURE;
general market conditions; the oil and natural gas industry; activity levels in
the oil and gas sector, including market fundamentals and drilling levels;
demand for the Corporation's services; expansion strategy; completion of
facilities; the impact of new facilities on the Corporation's financial
and operational performance; and acquisition strategy.
Forward-looking statements concerning expected operating and economic
conditions are based upon estimated results as well as the assumption that
increases in market activity and growth will be consistent with industry
activity in Canada, and the United States, and growth levels in similar phases
of previous economic cycles.
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" in SECURE's Management's Discussion and Analysis for the
three months ended March 31, 2014 and under the heading "Risk
Factors" in the Corporation's annual information form
("AIF") for the year ended December 31, 2013 and also includes the
risks associated with the possible failure to realized the anticipated
synergies in integrating the operations of Predator with the operations of
SECURE. Any "financial outlook" in this press release, as defined by
applicable securities legislation, has been approved by management of SECURE
and is included for the purpose of illustrating the materiality of the
acquisition of the assets of Predator, and for no other purpose. 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
Non GAAP Measures
The Corporation uses accounting principles that are generally accepted in
Canada (the issuer's "GAAP"), which includes, International
Financial Reporting Standards ("IFRS"). In addition, this press
release refers to the Non-GAAP financial measure EBITDA in respect of Predator.
EBITDA is not a recognized measure under IFRS and does not have any
standardized meaning prescribed by IFRS. EBITDA as used by the Corporation may
not be comparable to similar measures presented by other reporting issuers. See
the management's discussion and analysis available at www.sedar.com for a
reconciliation of historical EBITDA of the Corporation to the equivalent IFRS
measure, which is illustrative of the determination of EBITDA in respect to
Predator. Management believes that in addition to net earnings, EBITDA is a
useful supplemental measure as it provides an indication of the results
generated by the principal business activities of Predator prior to
consideration of how those activities are financed or how the results are
taxed. EBITDA should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
FOR FURTHER INFORMATION PLEASE CONTACT:
SECURE Energy Services Inc.
Chairman, President and Chief Executive Officer
SECURE Energy Services Inc.
Chief Financial Officer
INDUSTRY: Energy and Utilities - Oil and Gas
-0- Aug/12/2014 23:47 GMT
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