North American Energy Partners Awarded Three New Contracts
July 13 2011 - 7:21PM
Marketwired
North American Energy Partners Inc. ("NAEP" or "the Company") (TSX:
NOA) (NYSE: NOA) today announced that it has been awarded three new
contracts, including a five-year civil construction and mining
contract with Suncor Energy ("Suncor") and two large-diameter
pipeline contracts. The new contracts are expected to help offset a
slower-than-expected start to the 2012 fiscal year.
Five-Year Suncor Contract
NAEP is pleased to confirm that it has now signed the previously
disclosed five-year contract to supply reclamation, overburden
removal and light and heavy civil construction services to Suncor's
oil sands mine operations near Fort McMurray, Alberta. The
indicative value of the contract is approximately $500 million with
overburden and mine reclamation work to be priced using a quoted
unit-price structure, while civil construction work will be priced
on a project-by-project basis.
"The signing of this contract means we can commence the
mobilization of heavy equipment to Suncor's site. Accordingly, we
would expect to see work volumes ramp up over the second quarter,"
said Rod Ruston, President and CEO of NAEP.
Two New Pipeline Contracts
NAEP has also secured two new pipeline contracts with a combined
initial value of $92.5 million. Under the terms of these contracts,
NAEP will construct approximately 89 kilometers of 36-inch and
42-inch pipeline in British Columbia and Alberta. Construction is
expected to commence in August 2011, with all segments being
substantially completed by March 2012.
"Our new pipeline contracts reflect a better ongoing business
environment in the pipeline sector," said Mr. Ruston. "We're seeing
more projects coming to market and the contracts we're signing
include a better balance of risk sharing between client and
supplier."
"Overall, our contract wins at both Suncor and in our Pipeline
division are significant for us in that they provide a good
foundation for a recovery in our work volumes. Our activity levels
were lower than normal through much of fiscal 2011 and remained
weak in the most recent quarter ended June 30, 2011," added Mr.
Ruston. "As we have previously indicated, our business in the first
two months of the quarter was impacted by major wildfires and
extensive flooding. Fires in Northern Alberta caused intermittent
and costly shutdowns across our Fort McMurray operations, while
flooding in Southern Alberta and Saskatchewan impacted our piling
projects in these regions. While we expected to be able to partly
offset the early difficulties in our Heavy Construction and Mining
division with awards of work we believed would be made in late May
and June, these awards were delayed due to incomplete engineering.
As a result of the adverse weather conditions and low work volumes,
we are anticipating that first quarter results will be below
initial expectations."
"Going forward, increased activity levels related to our new
contracts should contribute to improving performance and our
outlook for the balance of the year remains positive," said Mr.
Ruston.
About the Company
North American Energy Partners Inc. (www.naepi.ca) is one of the
largest providers of heavy construction, mining, piling and
pipeline services in western Canada. For more than 50 years, NAEP
has provided services to large oil, natural gas and resource
companies, with a principal focus on the Canadian oil sands. The
Company maintains one of the largest independently owned equipment
fleets in the region.
Forward Looking Statements
The information provided in this release contains
forward-looking statements. Forward-looking statements include
statements preceded by, followed by or that include the words
"may", "could", "would", "should", "believe", "expect",
"anticipate", "plan", "estimate", "target", 'project", "intend",
"continue", "further" or similar expressions. Actual results could
differ materially from those contemplated by such forward-looking
statements as a result of any number of factors and uncertainties,
many of which are beyond our control. Examples of forward looking
information in this release include but are not limited to the
Company's expectation for work volumes ramp up over the second
quarter at Suncor and that increased activity levels related to the
Company's new contracts should contribute to improving performance.
Each of the forward-looking statements in this news release is
subject to significant risks and uncertainties and is based on a
number of assumptions which may prove to be incorrect. The material
factors or assumptions used to develop the above forward-looking
statements and the risks and uncertainties that could cause actual
results to differ materially from the information presented in the
above are discussed in NAEP's Management Discussion & Analysis
for the three months and year ended March 31, 2011. While
management anticipates that subsequent events and developments may
cause its views to change, the Company does not intend to update
this forward-looking information, except as required by applicable
securities laws. This forward-looking information represents
management's views as of the date of this document and such
information should not be relied upon as representing their views
as of any date subsequent to the date of this document..
For more complete information about us you should read our
disclosure documents that we have filed with the SEC and the CSA.
You may obtain these documents for free by visiting EDGAR on the
SEC website at www.sec.gov or on the CSA website at
www.sedar.com.
Contacts: North American Energy Partners Inc. Kevin Rowand
Director, Investor Relations & Strategic Planning (780)
960-4531 (780) 960-7103 (FAX) krowand@nacg.ca www.naepi.ca
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