Secure Announces Solid Second Quarter Results and an Increased 2014 Capital Budget to $275 Million

Secure Announces Solid Second Quarter Results and an Increased 2014 Capital 
Budget to $275 Million 
NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Secure Energy Services Inc. 
TSX SYMBOL:  SES 
AUGUST 12, 2014 
Secure Announces Solid Second Quarter Results and an Increased 2014 Capital
Budget to $275 Million 
CALGARY, ALBERTA--(Marketwired - Aug. 12, 2014) - Secure Energy Services Inc.
("Secure" or the "Corporation") (TSX:SES) today announced
financial and operational results for the three and six months ended June 30,
2014. The following should be read in conjunction with the management's
discussion and analysis ("MD&A"), the condensed consolidated
financial statements and notes of Secure which are available on SEDAR at
www.sedar.com. 
FINANCIAL AND OPERATIONAL HIGHLIGHTS FOR THE SECOND QUARTER ENDED JUNE 30, 2014 
Due to the late onset of spring break-up and the prolonged winter drilling
season, activity levels were at record highs for the second quarter in all
three divisions that allowed Secure to deliver exceptional results. EBITDA
increased 185% and net earnings increased 376%, compared to the second quarter
of 2013. Oil and gas industry activity levels through the second quarter were
trending at eight year highs with the average rig count for the quarter up 35%
from the prior year quarter in conjunction with a 36% increase in meters
drilled per well. Oil and gas development remains very strong, with producers
focused in the deep basin with longer, deeper and more technically challenging
well bores that require specialized drilling fluids systems that result in
increased drilling waste and completion fluids. Overall, the increased activity
levels and strong demand for products and services resulted in exceptional
results in all three of the Corporation's divisions. 
The operating and financial highlights for the three and six month periods
ending June 30, 2014 can be summarized as follows: 
/T/ 
Three Months Ended June 30,         
($000's except share and per                                                
 share data)                             2014           2013       % change 
----------------------------------------------------------------------------
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Revenue (excludes oil purchase                                              
 and resale)                          155,690         85,530             82 
Oil purchase and resale               412,249        252,323             63 
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Total revenue                         567,939        337,853             68 
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EBITDA (1)                             40,393         14,158            185 
  Per share ($), basic                   0.34           0.13            162 
  Per share ($), diluted                 0.33           0.13            154 
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Net earnings (loss)                     6,564         (2,375)           376 
  Per share ($), basic                   0.06          (0.02)           400 
  Per share ($), diluted                 0.05          (0.02)           350 
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Funds from operations (1)              40,956         17,016            141 
  Per share ($), basic                   0.35           0.17            106 
  Per share ($), diluted                 0.34           0.17            100 
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Cash dividends per common share          0.05           0.03             67 
Capital Expenditures (1)               82,338         42,677             93 
Total assets                        1,157,212        824,413             40 
Long term borrowings                  177,541        144,420             23 
Total long term liabilities           270,768        210,396             29 
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Common Shares - end of period     118,890,654    107,120,360             11 
Weighted average common shares                                              
  basic                           118,489,217    106,824,753             11 
  diluted                         121,757,066    106,824,753             14 
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Six Months Ended June 30,          
($000's except share and per                                                
 share data)                             2014           2013       % change 
----------------------------------------------------------------------------
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Revenue (excludes oil purchase                                              
 and resale)                          361,322        232,652             55 
Oil purchase and resale               732,829        428,179             71 
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Total revenue                       1,094,151        660,831             66 
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EBITDA (1)                             97,084         53,862             80 
  Per share ($), basic                   0.82           0.51             61 
  Per share ($), diluted                 0.80           0.50             60 
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Net earnings (loss)                    29,553         15,382             92 
  Per share ($), basic                   0.25           0.15             67 
  Per share ($), diluted                 0.24           0.14             71 
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Funds from operations (1)              97,313         58,450             66 
  Per share ($), basic                   0.83           0.50             66 
  Per share ($), diluted                 0.80           0.48             67 
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Cash dividends per common share          0.09           0.03            200 
Capital Expenditures (1)              149,075         84,945             75 
Total assets                        1,157,212        824,413             40 
Long term borrowings                  177,541        144,420             23 
Total long term liabilities           270,768        210,396             29 
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Common Shares - end of period     118,890,654    107,120,360             11 
Weighted average common shares                                              
  basic                           117,865,604    105,785,632             11 
  diluted                         121,100,256    108,539,612             12 
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/T/ 
(1)  Refer to "Non GAAP measures and operational definitions" and
"Additional GAAP measures" for further information 
REVENUE INCREASES 
/T/ 
--  REVENUE FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 INCREASED 82% 
AND 55%  
--  PRD division revenue (excluding oil purchase/resale) for the three 
and six months ended June 30, 2014 increased 86% and 62% 
respectively, from the 2013 comparative periods. Processing volumes 
increased 48% and 35% as higher activity resulted in increased 
demand for services and the addition of seven new facilities that 
were completed and commissioned after the first quarter of 2013 all 
contributed to the increase. Recovery revenues increased due to a 
43% and 44% increase in throughput at the Corporation's facilities, 
increased crude oil marketing revenue and higher recovery of oil 
through waste processing. Disposal volumes increased 88% and 70% as 
a direct result of increased activity and the addition of the 13 
Mile Landfill in North Dakota in October 2013 and the Saddle Hills 
Landfill in November 2013;  
--  DS division Canadian revenue for the three and six months ended June 
30, 2014 increased $26.6 million and $52.0 million respectively, 
from the 2013 comparative periods. Drilling fluids market share was 
33% and 32% respectively, while revenue per operating day increased 
to $8,430 and $7,606 for the three and six months ended June 30, 
2014. Drilling fluids revenue increased 50% and 30% as a result of 
an increase in meters drilled per well by the Corporation's 
customers that results in complex and deeper wells drilled that 
require oil based muds that contribute higher revenues. Overall 
there was higher field activity as meters drilled in Canada 
increased by 36% and 12% for the three and six month periods ended 
June 30, 2014 compared to the prior year periods as reported by the 
Canadian Association of Drilling Contractors 
("CAODC"). Revenue from equipment rentals increased by 141% and 121% 
relating to higher utilization of equipment driven by robust 
industry activity, and an increase in the rental fleet from the 
acquisition of Target Rentals Inc. ("Target") in July 2013, and 
organic growth of the centrifuge fleet;  
--  OS division revenue for both the three and six months ended June 30, 
2014 increased 148% from the 2013 comparative periods. The 
acquisition of a private oilfield service company during the 
quarter, and the two acquisitions completed in the first quarter of 
2014, accounted for the significant increase. A prolonged winter 
drilling season and favourable weather resulted in an overall 
increase in industry activity that drove demand for the services 
provided by the OS division. Equipment utilization remained strong 
for integrated fluids solutions as customers continually seek out an 
integrated service for water handling. The projects service line 
added additional customers and expanded geographic presence in 
Northern Alberta and BC as a result of the acquisition completed in 
the second quarter, both of which contributed to the solid results; 
and  
--  Oil purchase and resale revenue in the PRD division for the three 
and six months ended June 30, 2014 increased 63% and 71% 
respectively, from the 2013 comparative periods. Increased pipeline 
capacity added at the Judy Creek FST in the third quarter of 2013, a 
7% increase in crude oil prices year to date, increased oil 
throughput at the Corporation's pipeline connected FSTs, and 
increasing crude oil volumes shipped via rail all contributed to the 
increase. 
--  EBITDA INCREASES 185% AND 80% FOR THE THREE AND SIX MONTHS ENDED JUNE 
30, 2014 DRIVING INCREASES IN NET EARNGINGS OF 376% AND 92%  
--  For the three and six months ended June 30, 2014, the increase in 
EBITDA and net earnings is attributable to overall strong demand for 
the Corporation's services and products; the addition of new 
facilities in the PRD division combined with operational 
efficiencies achieved due to high volumes; the increase in revenue 
per operating day and rentals revenue in the DS division; and solid 
performance of the OS division with the newly acquired assets from 
three acquisitions executed in the first half of 2014 combined with 
favourable weather conditions which drove high equipment utilization 
through the second quarter. 
--  FUNDS FROM OPERATIONS INCREASES 141% AND 66% FOR THE THREE AND SIX 
MONTHS ENDED JUNE 30, 2014  
--  The 141% and 66% increase for the three and six month periods ended 
June 30, 2014 is directly attributable to the solid results achieved 
in all three of the Corporation's divisions driven by robust 
industry conditions experienced through the second quarter, which in 
turn drove EBITDA increases as discussed above and resulted in 
increased funds from operations.  
--  2014 CAPITAL BUDGET AND STRATEGIC AQUISITIONS  
--  Secure has a focused strategy of constructing and expanding 
facilities in key under-serviced capacity constrained markets and to 
capitalize on market opportunities. The Corporation previously 
announced the 2014 capital expenditure budget of $225.0 million 
which includes $20.0 million of carry over capital from 2013 
projects related to the Kindersley, Edson, and Keene FSTs. Total 
capital expenditures for the six months ended June 30, 2014 totaled 
$148.0 million for both growth and expansion capital, and 
acquisitions. Growth capital expenditures included the following:  
--  Kindersley FST was completed and operational during the first 
quarter;  
--  Edson and Keene FSTs were completed, commissioned and 
operational during the second quarter of 2014;  
--  Construction of the new oil based mud blending plant in Fox 
Creek was completed with operations commencing in July;  
--  The Stanley and Brazeau SWDs are currently under construction to 
convert to FSTs with the waste portion of Stanley anticipated to 
be operational in the third quarter of 2014 and Brazeau in the 
fourth quarter of 2014;  
--  Rycroft Full Service Rail ("FSR") facility is the Corporation's 
first heavy oil rail facility. The FSR facility will offer 
treating, storage, disposal and transloading services. It is 
expected the facility will be commissioned and operational in 
the fourth quarter of 2014; and  
--  Tulliby Lake FST and landfill is the Corporation's first heavy 
oil and production sand treating, and landfill facility. It is 
expected the FST and landfill will be commissioned and 
operational near the end of the fourth quarter of 2014.  
--  Expansion capital expenditures included the following:  
--  Landfill cells at South Grande Prairie, and Saddle Hills, both 
of which were under construction in the quarter. The additional 
cell capacity will be available for the fourth quarter of 2014;  
--  Additional disposal wells at both the Obed and Drayton Valley 
FSTs were under construction in the quarter and will be 
commissioned in the fourth quarter of 2014;  
--  Purchase of an office in Grande Prairie to accommodate growth of 
the Corporation and consolidate all three divisions into one 
space; and  
--  Completion of the DS division's new state of the art laboratory 
facility that opened in July 2014.  
--  Strategic Acquisitions:  
--  During the quarter, Secure executed three strategic 
acquisitions. A mineral products plant located in Alberta, an 
environmental contracting business, and a drilling fluids 
business for total consideration of $16.4 million paid in cash 
and shares of the Corporation. These three strategic 
acquisitions are a continuation of the Corporation's strategy to 
add complementary services along the energy services value 
chain. The mineral products plant mainly processes barite which 
is a product used in drilling fluids. The mineral products plant 
allows Secure to vertically integrate the operations in the DS 
division to improve supply logistics and quality. The 
environmental contracting business provides services relating to 
spill cleanup, pond construction, and contaminated soil 
excavation, stockpiling, treatment, transportation and disposal 
and will expand the service area of the OS division. The 
drilling fluids business provides additional drilling fluid 
systems for highly complex wells in the deep basin and key 
customer relationships.  
--  SOLID BALANCE SHEET  
--  Secure's debt to trailing twelve month EBITDA ratio was 1.14 as of 
June 30, 2014 compared to 1.38 as of December 31, 2013.  
--  As at June 30, 2014, the Corporation had $198.2 million available 
under its credit facility. 
--  BRAND NAME CONSOLIDATION  
--  During the second quarter, Secure announced that it consolidated all 
of its operating entities and services under the SECURE Energy 
Services brand name. With all of its services under one brand, 
Secure is better positioned to support its clients throughout the 
entire lifecycle of a well from drilling and completions to 
production, final abandonment and reclamation. 
--  SUBSEQUENT EVENTS  
--  Secure increased its 2014 Capital program to $275.0 million from the 
previously announced $225.0 million. The $50.0 million increase 
consists of the following:  
--  PRD division growth and expansion capital of $38.0 million 
consisting of one FSR, and one FST conversion from an SWD;  
--  DS division growth capital of $6.0 million for various rental 
and site equipment; and  
--  OS division growth capital of $6.0 million for addition heavy 
duty equipment and water handling assets.  
--  On August 12, 2014, Secure announced the acquisition of the assets 
of Predator Midstream Ltd. ("Predator") for total consideration of 
$107.0 million comprised of cash and common shares. Predator is a 
private midstream company that owns and operates three rail 
transloading terminals in Alberta. Predator transloads crude oil 
from truck to rail, where rail cars are aggregated and subsequently 
sold to refineries. The acquisition will add three operational rail 
sites and combined with Secure's current construction of the Rycroft 
FSR, will provide an immediate rail terminal network from which to 
build on. Closing is expected to occur on or about August 15, 2014. 
--  PRESS RELEASE SECOND QUARTER OPERATIONAL UPDATE  
--  The Corporation provided an operational update to the market on June 
12, 2014 stating that EBITDA for the two months ended May 31, 2014 
was estimated to be in the range of $19.0 million - $24.0 million. 
Actual results for the two months ended May 31, 2014 did fall in 
this range.  
/T/ 
PRD DIVISION OPERATING HIGHLIGHTS 
/T/ 
Three Months Ended    Six Months Ended June  
June 30,                  30,           
%                       %
($000's)                         2014    2013 Change     2014    2013 Change
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Revenue                                                                     
  Processing, recovery and                                                   
disposal services (a)       66,843  35,967     86  130,146  80,318     62
  Oil purchase and resale                                                    
service                    412,249 252,323     63  732,829 428,179     71 
----------------------------------------------
Total PRD division revenue    479,092 288,290     66  862,975 508,497     70 
Operating Expenses                                                          
  Processing, recovery and                                                   
disposal services (b)       26,488  15,413     72   50,223  30,314     66
  Oil purchase and resale                                                    
service                    412,249 252,323     63  732,829 428,179     71
  Depreciation, depletion, and                                               
amortization                15,244   9,838     55   28,983  18,855     54 
---------------------------------------------- 
----------------------------------------------
Total operating expenses      453,981 277,574     64  812,035 477,348     70
General and administrative      7,761   5,746     35   14,528  10,705     36 
----------------------------------------------
Total PRD division expenses   461,742 283,320     63  826,563 488,053     69 
Operating Margin (1) (a-b)     40,355  20,554     96   79,923  50,004     60 
Operating Margin (1) as a % of                                              
 revenue (a)                       60%     57%             61%     62%      
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/T/ 
(1) Refer to "Non GAAP measures and operational definitions" and
"Additional GAAP measures" for further information          
Highlights for the PRD division included:  
/T/ 
--  Processing: For the three and six months ended June 30, 2014, processing 
volumes increased 48% and 35% respectively, from the comparative periods 
in 2013. The increase in volumes and revenue is a result of an increase 
in overall demand for the PRD division's services and the addition of 
new facilities and expansions at current facilities subsequent to the 
second quarter of 2013 which include: completion of the Rocky and Judy 
Creek FSTs in May 2013; Kindersley FST in December 2013; Edson FST and 
Keene FST in North Dakota, in April 2014. 
--  Recovery: Revenue from recovery for the three and six months ended June 
30, 2014 increased by 88% and 57% respectively, from the comparative 
periods in 2013. The increase in recovery revenue for the three and six 
months ended June 30, 2014 is a result of a the Corporation's ability to 
capitalize on crude oil marketing opportunities at its pipeline 
connected FSTs resulting in a 33% and 21% increase in crude oil 
marketing revenues over the 2013 comparative periods, increased 
throughput at Secure facilities, and an increase in the price of crude 
oil of 9% and 7% as compared to the three and six months ended June 30, 
2013. 
--  Disposal: Secure's disposal volumes for the three and six months ended 
June 30, 2014 increased by 88% and 70% respectively, from the 
comparative periods of 2013. The increase in volumes is related to 
increased demand and the addition of new facilities subsequent to the 
second quarter of 2013 which include: completion of the Kaybob SWD in 
August 2013; Stanley SWD in North Dakota in September 2013; 13 Mile 
Landfill in North Dakota in October 2013; Saddle Hills Landfill in 
November 2013; and the Keene SWD in North Dakota in November 2013. 
--  Oil purchase/resale service: Revenue from oil purchase and resale 
services for the three and six months ended June 30, 2014 increased 63% 
and 71% to $412.2 million and $732.8 million from $252.3 million and 
$428.2 million in the comparative periods of 2013. The increase in the 
period is due to increased pipeline capacity added at the Judy Creek FST 
in the third quarter of 2013, a 9% and 7% increase in crude oil prices 
for the three and six months ended June 30, 2014 over the prior year 
comparative periods, increased oil throughput at the Corporation's 
pipeline connected FSTs, and increased crude oil volumes shipped via 
rail. The revenue from this service line will fluctuate monthly based on 
the factors described above.  
--  Operating margin as a percentage of revenue for the three and six months 
ended June 30, 2014 was 60% and 61% compared to 57% and 62% in the 
comparative periods of 2013. The 3% increase for the three months ended 
June 30, 2014 is a direct result of higher activity levels and increased 
revenue associated with the prolonged winter drilling season and shorter 
than normal break-up period, an increase in crude oil marketing 
activities at the Corporation's pipeline connected facilities and 
increased volumes shipped by rail. The 1% decrease for the six months 
ended June 30, 2014 is a result of $2.8 million of costs incurred for 
the ongoing liner repairs at the Corporation's landfill from the fourth 
quarter of 2013.  
--  General and administrative ("G&A") expenses for the three and six months 
ended increased 35% and 36% to $7.8 million and $14.5 million from $5.7 
million and $10.7 million in the comparative periods of 2013. Major 
drivers for the three and six months ended June 30, 2014 over the prior 
year comparative periods are an increase relating to additional 
employees to support the opening of new facilities and organic growth at 
existing facilities both in Canada and the US, additional office space 
and an increase in costs related to Secure's rebranding initiative.  
/T/ 
DS DIVISION OPERATING HIGHLIGHTS 
/T/ 
Three Months Ended    Six Months Ended June  
June 30,                  30,           
%                       %
($000's)                         2014    2013 Change     2014    2013 Change
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Revenue                                                                     
  Drilling services (a)        67,574  40,998     65  186,256 134,251     39 
Operating expenses                                                          
  Drilling services (b)        51,444  33,412     54  139,825 104,165     34
  Depreciation and                                                           
amortization                 5,386   3,803     42   10,382   7,474     39 
----------------------------------------------
Total DS division operating                                                 
 expenses                      56,830  37,215     53  150,207 111,639     35
General and administrative      6,972   4,812     45   14,826  10,962     35 
----------------------------------------------
Total DS division expenses     63,802  42,027     52  165,033 122,601     35 
Operating Margin (1) (a-b)     16,130   7,586    113   46,431  30,086     54 
Operating Margin %(1)              24%     19%             25%     22%      
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/T/ 
(1) Refer to "Non GAAP measures and operational definitions" and
"Additional GAAP measures" for further information      
Highlights for the DS division included: 
/T/ 
--  Revenue from the DS division for the three and six months ended June 30, 
2014 increased 65% and 39% to $67.6 million and $186.3 million from 
$41.0 million and $134.3 million in the comparative periods of 2013. The 
increase in revenue for the three months ended June 30, 2014 is the 
result of a shorter than normal spring break-up resulting in higher 
drilling activity from a prolonged winter drilling season allowing 
customers to stay in the field longer and return earlier than usual, and 
an increase in pad drilling which occurs throughout spring break-up. The 
average rig count for the second quarter increased 35% from the prior 
year quarter in conjunction with a 36% increase in meters drilled per 
well. This led to a combined 50% increase in the drilling fluids service 
line and a 141% increase for the equipment rentals service line from the 
comparative period in 2013. 
--  The DS division market share in Canada for the three and six months 
ended June 30, 2014 was 33% and 32%, a decrease of 1% for the three 
month comparative period and consistent for the six month comparative 
period. 
Meters drilled per well by the DS division's customers increased by 43% 
and 33% respectively, over the comparative periods of 2013. 
Additionally, the number of wells drilled that used oil based mud 
increased by 31% and 25% respectively, over comparative periods of 2013 
as a result of an increase in horizontal and directional drilling in 
which these muds are utilized. Oil based muds contribute higher revenue 
that drives increases in revenue per operating day. As a result of the 
factors discussed above, the revenue per operating day increased to 
$8,430 and $7,606 for the three and six months ended June 30, 2014 from 
$6,690 and $6,036 in the comparative periods of 2013. 
--  The increase in the equipment rentals service line revenue for the three 
and six months ended June 30, 2014 over the comparative periods of 2013, 
is a direct result of the acquisition of Target Rentals Ltd. ("Target") 
in July 2013 which significantly increased the rental asset base, and 
organic growth in the centrifuge fleet. Additionally, overall rental 
asset utilization increased 14% and 6% respectively over the comparative 
periods of 2013 due to the overall higher industry activity levels 
experienced. 
--  For the three and six months ended June 30, 2014, operating margins 
increased to 24% and 25% from 19% and 22% in the 2013 comparative 
periods. As described above, higher activity levels, and increased 
revenue associated with the prolonged winter drilling season as well as 
equipment rentals both contributed to higher operating margins. 
Equipment rentals make up a significant portion of the growth in 
revenues from the 2013 comparative periods due to the acquisition and 
organic growth of the rental fleet, and increased equipment utilization 
which have inherently higher margins. This, combined with the increased 
drilling fluids revenue has driven the 5% and 3% increase in operating 
margin over the comparative periods of 2013. 
--  G&A expense for the three and six months ended June 30, 2014 increased 
45% and 35% to $7.0 million and $14.8 million from $4.8 million and 
$11.0 million in the comparative periods of 2013. Major drivers for the 
three and six months ended June 30, 2014 over the prior year comparative 
periods are an increase of 37% and 26% in staffing costs to support the 
four strategic acquisitions executed in Canada since the second quarter 
of 2013 and to support the organic growth in both drilling fluids and 
rentals in Canada and US; and increased costs related to Secure's 
rebranding initiative.  
/T/ 
OS DIVISION OPERATING HIGHLIGHTS 
/T/ 
Three Months Ended    Six Months Ended June 
June 30,                  30,          
%                      %
($000's)                          2014    2013 Change    2014    2013 Change
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Revenue                                                                     
  Onsite services (a)           21,273   8,565    148  44,920  18,083    148 
Operating expenses                                                          
  Onsite services (b)           16,439   8,425     95  33,568  15,936    111
  Depreciation and amortization  2,641   1,149    130   4,526   1,354    234 
---------------------------------------------
Total OS division operating                                                 
 expenses                       19,080   9,574     99  38,094  17,290    120
General and administrative       1,732   1,548     12   3,495   2,653     32 
--------------------------------------------- 
---------------------------------------------
Total OS division expenses      20,812  11,122     87  41,589  19,943    109 
Operating Margin (1) (a-b)       4,834     140  3,353  11,352   2,147    429 
Operating Margin %(1)               23%      2%            25%     12%      
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/T/ 
(1) Refer to "Non GAAP measures and operational definitions" and
"Additional GAAP measures" for further information      
Highlights for the OS division included: 
/T/ 
--  The overall increase for the three and six months ended June 30, 2014 is 
a direct result of the Frontline Integrated 
Services Ltd. ("Frontline") acquisition in April 2013, the three 
additional acquisitions completed since the second quarter of 2013, and 
a shortened spring break-up compared to the prior year as work continued 
through the second quarter and equipment remained on site. 
--  Projects revenue for the three and six months ended June 30, 2014 
increased due to the acquisition completed in April 2014 which added a 
new geographic area and increased customer base. Additionally, there was 
an increase in remediation and reclamation projects completed that 
contributed to increased revenues combined with higher utilization of 
equipment as a result of favourable weather conditions and robust 
industry activity from the comparative periods of 2013. 
--  Integrated fluid solutions revenue increased for the three and six 
months ended June 30, 2014 as a direct result of the acquisition 
completed in the first quarter of 2014. High equipment utilization, 
addition of new customers, and the increased offering of complimentary 
and in demand services, has positively impacted integrated fluid 
solutions. As the drilling season was extended due to a late spring 
break-up, demand for an integrated fluids solutions package was at 
record highs for the second quarter. 
--  For the three and six months ended June 30, 2014, operating margins 
increased to 23% and 25% from 2% and 12% in the 2013 comparative 
periods. The operating margin for the OS division is expected to 
fluctuate depending on the volume and type of projects undertaken and 
the blend of business between remediation and reclamation projects, 
demolition projects, pipeline integrity projects, site clean-up, and 
other services in any given period. In the 2013 comparative periods, the 
margins were negatively impacted by unfavourable weather as projects 
were delayed into the third quarter and upfront costs were incurred to 
prepare for the higher activity levels in the second half of the year 
therefore reducing margins to break-even levels. The acquisition of a 
rentals based business in the first quarter of 2014, which inherently 
achieves higher margins given the initial capital investment for the 
equipment, has also significantly contributed to the increase in margins 
achieved for both the three and six months ended June 30, 2014. 
--  G&A expenses for the three and six months ended June 30, 2014 increased 
to $1.7 million and $3.5 million from $1.5 million and $2.7 million in 
the comparative periods of 2013. G&A expenses increased due to the 
acquisition of Frontline in the April 2013, the three acquisitions 
completed since the second quarter of 2013, an overall increase in 
activity and operations in the division, increased costs related to 
Secure's rebranding initiative, and costs associated with moving to a 
new OS division office. G&A is expected to fluctuate based on the growth 
of the division.  
/T/ 
INCREASE IN 2014 CAPITAL PROGRAM 
Secure's board of directors has approved the addition of $50.0 million to
Secure's 2014 organic capital budget, increasing the budget from
approximately $225.0 million to approximately $275.0 million. The additional
capital includes the following: 
/T/ 
--  PRD division growth and expansion capital of $38.0 million consisting of 
one FSR, and one FST conversion from an SWD; 
--  DS division growth capital of $6.0 million for various rental and site 
equipment; and 
--  OS division growth capital of $6.0 million for addition heavy duty 
equipment and water handling assets.  
/T/ 
The $275.0 million capital budget has been allocated as follows: 
/T/ 
--  $243 million PRD division: two FSRs (FST), one FST, three SWD 
conversions to FSTs, one SWD, one landfill; and expansion capital 
consisting of additional landfill cells, second treaters, pipeline 
connection, additional disposal wells, new office building purchased in 
Grande Prairie and various operational upgrades; 
--  $20 million DS division: construction and completion of the Fox Creek 
Mud blending plant, opening of the new laboratory facility in July 2014, 
and various rental and site equipment; and 
--  $12 million OS division: addition of heavy duty equipment, specialized 
tools, and water handling assets.  
/T/ 
OUTLOOK 
Industry fundamentals have remained strong through the first half of the year
and are forecasted to continue on this upward trend through the back half of
2014. This has resulted in increased capital forecasts and spending by
producers and sets up the third quarter for all three divisions of Secure to
deliver results that continue to exceed previous periods assuming activity
levels remain robust, and favourable weather conditions remain for continued
drilling activity and movement of equipment to sites. 
Secure has a focused strategy of constructing and expanding facilities in key
under-serviced capacity constrained markets. The list of organic opportunities
contains several other projects beyond the ones currently under construction,
that reflect the ability of Secure to take advantage of market potential that
exists today. Therefore, Secure has increased its 2014 capital budget to $275
million from the previously announced $225 million to capitalize on these
opportunities including building out an additional FSR and an FST conversion of
an SWD. The Corporation is well positioned to fund its expanded 2014 capital
program with available debt capacity from its credit facility and cash flow
from operations while still maintaining a strong balance sheet. 
Transporting crude by rail continues to provide a strategic alternative to
pipeline constraints. As the heavy oil differentials remain strong, this
supports the maximization of profits. With construction of the Rycroft FSR,
anticipated to be commissioned in the third quarter, and the additional FSR
included as part of the increased 2014 capital budget, Secure will have access
to the North American rail network providing its customers with further
alternatives for moving crude. Secure is committed to continue to diversify its
value chain of service offerings to exceed the expectations of its customers
and maximize returns to shareholders. 
Secure is committed to developing new technologies in order to continually
strengthen the value chain of services Secure is able to provide to its
customers and recycle and reduce waste in the drilling and completions process.
The water recycling technology at the South Grande Prairie FST is in the pilot
stage and it is expected to be commissioned and used to produce recycled fluids
during the fourth quarter. Secure also continues the development and
implementation of solids processing technologies for the recovery of
hydrocarbons used in the drilling process. Secure is excited about the
potential that exists in these initiatives and is looking forward to further
developing these technologies throughout the second half of the year. 
FINANCIAL STATEMENTS AND MD&A 
The condensed consolidated financial statements and MD&A of Secure for the
three and six months ended June 30, 2013 are available immediately on
Secure's website at www.secure-energy.ca. The condensed consolidated
financial statements and MD&A will be available tomorrow on SEDAR at
www.sedar.com. 
FORWARD-LOOKING STATEMENTS 
Certain statements contained in this document constitute "forward-looking
statements" and/or "forward-looking information" 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. In particular, this document contains
forward-looking statements pertaining to: corporate strategy; goals; general
market conditions; the oil and natural gas industry; activity levels in the oil
and gas sector, including market fundamentals, drilling levels, commodity
prices for oil, natural gas liquids ("NGLs") and natural gas;
industry fundamentals for the second half of 2014; capital forecasts and
spending by producers; demand for the Corporation's services; expansion
strategy; the amount of the increased 2014 capital budget; the amounts of the
PRD, DS and OS divisions' proposed 2014 capital budgets and the intended
use thereof; debt service; capital expenditures; completion of facilities; the
impact of new facilities on the Corporation's financial and operational
performance; future capital needs; access to capital; acquisition strategy;
anticipated closing date of the Predator acquisition; anticipated commissioning
of the Rycroft FSR; anticipated commissioning of the water recycling at South
Grande Prairie FST; completion of the Stanley and Brazeau FSTs, and the Tulliby
Lake FST and Landfill. 
Forward-looking statements concerning expected operating and economic
conditions are based upon prior year 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 concerning the
availability of funding for future operations are based upon the assumption
that the sources of funding which the Corporation has relied upon in the past
will continue to be available to the Corporation on terms favorable to the
Corporation and that future economic and operating conditions will not limit
the Corporation's access to debt and equity markets. Forward-looking
statements concerning the relative future competitive position of the
Corporation are based upon the assumption that economic and operating
conditions, including commodity prices, crude oil and natural gas storage
levels, interest rates, the regulatory framework regarding oil and natural gas
royalties, environmental regulatory matters, the ability of the Corporation and
its subsidiaries' to successfully market their services and drilling and
production activity in North America will lead to sufficient demand for the
Corporation's services and its subsidiaries' services including
demand for oilfield services for drilling and completion of oil and natural gas
wells, that the current business environment will remain substantially
unchanged, and that present and anticipated programs and expansion plans of
other organizations operating in the energy service industry will result in
increased demand for the Corporation's services and its subsidiary's
services. Forward-looking statements concerning the nature and timing of growth
are based on past factors affecting the growth of the Corporation, past sources
of growth and expectations relating to future economic and operating
conditions. Forward-looking statements in respect of the costs anticipated to
be associated with the acquisition and maintenance of equipment and property
are based upon assumptions that future acquisition and maintenance costs will
not significantly increase from past acquisition and maintenance costs. 
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" and under the heading "Risk Factors" in the
Corporation's annual information form ("AIF") for the year ended
December 31, 2013. 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 forward-looking statements. 
Non GAAP Measures and Operational Definitions 
/T/ 
1.  The Corporation uses accounting principles that are generally accepted 
in Canada (the issuer's "GAAP"), which includes, International Financial 
Reporting Standards ("IFRS"). These financial measures are Non-GAAP 
financial measures and do not have any standardized meaning prescribed 
by IFRS. These non-GAAP measures used by the Corporation may not be 
comparable to a similar measures presented by other reporting issuers. 
See the management's discussion and analysis available at www.sedar.com 
for a reconciliation of the Non-GAAP financial measures and operational 
definitions. These non-GAAP financial measures and operational 
definitions are included because management uses the information to 
analyze operating performance, leverage and liquidity. Therefore, these 
non-GAAP financial measures and operational definitions should not be 
considered in isolation or as a substitute for measures of performance 
prepared in accordance with GAAP.  
/T/ 
ABOUT SECURE ENERGY SERVICES INC. 
SECURE is a TSX publicly traded energy services company that provides safe and
environmentally responsible fluids and solids solutions to the oil and gas
industry. 
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. 
On Site 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. 
TSX Symbol: SES 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Secure Energy Services Inc.
Rene Amirault
Chairman, President and Chief Executive Officer
(403) 984-6100
(403) 984-6101
or
Secure Energy Services Inc.
Allen Gransch
Executive Vice President & Chief Financial Officer
(403) 984-6100
(403) 984-6101
www.secure-energy.com 
INDUSTRY:  Energy and Utilities - Oil and Gas  
SUBJECT:  ERN 
-0-
-0- Aug/13/2014 00:03 GMT
 
 
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