- Realized $67 million of
run-rate synergies impacting Adjusted EBITDA1, reaching
89% of our $75 million target, on
track to deliver the remainder by end of 2022
- Earned $127 million and
$0.41 per basic share of Adjusted
EBITDA1 in Q2, reflecting strong operational
performance and realized synergies, up 310% from Q2 2021 and 116%
on a per basic share basis
- Improved our Total Debt to
EBITDA2 covenant ratio to 2.5x
- Settled US$77 million, or 26%
of our 11% senior secured notes as we continue to optimize our
capital structure
- Released our 2021 Sustainability Report, demonstrating our
commitment to sustainability with tangible short-term
goals
- Generated revenue (excluding oil purchase and resale) of
$355 million up 203% from Q2
2021
- G&A as a percentage of revenue (excluding oil purchase
and resale) improved to 8% from 11% in Q2 2021
- Adjusted EBITDA margin1 of 36%, up from 26% in Q2
2021
- Achieved net income of $54
million and $0.17 per share,
an increase of $67 million from Q2
2021
- Generated $66 million of
discretionary free cash flow1, up 267% from Q2
2021, and 91% on a per basic share basis1
- Increased funds flow from operations to $80 million, 371% higher than Q2 2021
CALGARY,
AB, July 27, 2022 /CNW/ - SECURE ENERGY
Services Inc. ("SECURE" or the "Corporation") (TSX: SES) reported
the Corporation's operational and financial results for the three
and six months ended June 30,
2022.
"We are extremely pleased with our strong financial performance
in the second quarter of 2022, demonstrating the strength of our
expanded business, our ongoing focus on managing costs, and an
overall improvement in our underlying markets," said Rene Amirault, President and Chief Executive
Officer of SECURE. "Results were positively impacted by realized
cost synergies from the Tervita transaction, which have progressed
ahead of our expectations. Our operations also benefited from
robust industry activity levels led by higher oil and gas prices,
driving significant demand for our customer solutions.
"There is strong momentum throughout our operations. With our
increased discretionary free cash flow generation capabilities and
a strengthened balance sheet, we remain well positioned to meet our
debt reduction targets, deliver on ESG initiatives, and at the same
time capitalize on growth at existing facilities and favourable
industry fundamentals.
"We are excited by the future of SECURE. Using our technologies,
network and best in class team to form new partnerships, we remain
focused on helping our customers develop the highest ESG standards
and lowest cost structure in the world, ensuring we create
sustainable energy and environmental solutions for many
decades."
_________________________________
|
1 Non-GAAP financial measure/ratio.
Refer to the "Non-GAAP and other specified financial
measures" section herein.
|
2 Calculated in accordance with the
Corporation's credit facility agreements. Refer to the
"Liquidity and Capital Resources" section in the Q2 2022
Management's Discussion and Analysis ("MD&A") which information
is incorporated by reference into this new release.
|
FINANCIAL AND OPERATING
HIGHLIGHTS
The Corporation's operating and financial
highlights for the three and six
months ended June 30, 2022, and 2021 can
be summarized as follows:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
($ millions except share and per share
data)
|
2022
|
2021
|
%
change
|
2022
|
2021
|
%
change
|
Revenue (excludes oil purchase and resale)
|
355
|
117
|
203
|
714
|
249
|
187
|
Oil purchase and resale
|
1,723
|
395
|
336
|
3,114
|
924
|
237
|
Total
revenue
|
2,078
|
512
|
306
|
3,828
|
1,173
|
226
|
Adjusted EBITDA (1)
|
127
|
31
|
310
|
253
|
71
|
256
|
Per share ($),
basic (1)
|
0.41
|
0.19
|
116
|
0.82
|
0.44
|
86
|
Per share
($), diluted (1)
|
0.41
|
0.19
|
116
|
0.81
|
0.44
|
84
|
Net income attributable to shareholders of SECURE (2)
|
54
|
(13)
|
515
|
92
|
(13)
|
808
|
Per share
($), basic and diluted
|
0.17
|
(0.08)
|
313
|
0.30
|
(0.08)
|
475
|
Funds flow from operations
|
80
|
17
|
371
|
187
|
47
|
298
|
Per share ($), basic and
diluted (3)
|
0.26
|
0.11
|
136
|
0.60
|
0.29
|
107
|
Discretionary free cash flow (1)
|
66
|
18
|
267
|
166
|
47
|
253
|
Per share
($), basic and diluted (1)
|
0.21
|
0.11
|
91
|
0.54
|
0.29
|
86
|
Capital expenditures (1)
|
19
|
7
|
171
|
32
|
13
|
146
|
Dividends per common share
|
0.0075
|
0.0075
|
—
|
0.0150
|
0.0150
|
—
|
Total assets
(2)
|
2,931
|
1,510
|
94
|
2,931
|
1,510
|
94
|
Long-term liabilities (2)
|
1,281
|
480
|
167
|
1,281
|
480
|
167
|
Common shares - end of period
|
309,868,588
|
160,499,821
|
93
|
309,868,588
|
160,499,821
|
93
|
Weighted average common shares:
|
|
|
|
|
|
|
Basic
|
309,831,621
|
160,358,466
|
93
|
309,335,228
|
159,951,853
|
93
|
Diluted
|
313,071,825
|
160,358,466
|
95
|
312,560,669
|
159,951,853
|
95
|
(1) Refer to
"Non-GAAP and other specified financial measures" section
herein.
|
(2) Prior
year amounts have been restated, refer to the "Accounting
Policies" section in the Q2 2022 MD&A for additional
information.
|
(3)
Supplementary financial measure. Refer to the "Non-GAAP and
other specified financial measures" section herein.
|
FINANCIAL AND OPERATIONAL RESULTS
The following should be read in conjunction with the
Corporation's MD&A for the three and six months ended
June 30, 2022, and the consolidated
financial statements and notes thereto for the three and six months
ended June 30, 2022 ("Interim
Financial Statements"), which are both available on SEDAR at
www.sedar.com.
SECOND QUARTER
HIGHLIGHTS
- Integration cost savings of $67
million realized - achieved an incremental $14 million of annualized cost savings impacting
Adjusted EBITDA in the second quarter of 2022, increasing realized
cost savings from $53 million to
$67 million on an annual run-rate
basis. As a result, the Corporation has now achieved 89% of the
$75 million cost savings target in
the first twelve months following completion of the Tervita
transaction (the "Transaction"). The $14
million achieved in the quarter is mainly a result of a
reduction of headcount and corporate overhead costs, and
operational optimizations. In the three months ended June 30, 2022, $9
million of costs related to the Transaction and integration
of the legacy businesses were incurred of which $6 million was associated with the competition
review process.
- Revenue (excluding oil purchase and resale) of $355 million – represents an increase of 203%
compared to the second quarter of 2021 with Midstream
Infrastructure revenue (excluding oil purchase and resale)
increasing by $115 million to
$164 million and Environmental and
Fluid Management revenue increasing by $123
million to $191 million for
the quarter. These increases were primarily due to additional
revenue associated with the Transaction and an increase in
energy-related industry activity levels as benchmark oil and
natural gas prices were strong in the quarter. Both reportable
segments benefited from improved industry activity levels, driving
incremental volumes at Midstream Infrastructure facilities and
industrial landfills, and demand for drilling and completion
related services, underpinned by an increase in average active rig
count of approximately 47%. Higher crude oil pricing in the second
quarter of 2022 also positively impacted recovered oil revenue and
contributed to the increase in oil purchase and resale revenue,
which increased by 336% to $1.7
billion compared to the comparative 2021 period.
- Net income attributable to shareholders of $54 million and $0.17 per share - an increase of $67 million or $0.26 per basic share compared to the second
quarter of 2021, as general industry conditions continued to
strengthen. The increase was primarily driven by the impact of the
Transaction and lower depreciation, depletion and amortization
("DD&A"), partially offset by higher general and administrative
("G&A") expenses, higher finance costs associated with debt
assumed upon closing the Transaction and a higher non-cash deferred
tax expense.
- Adjusted EBITDA of $127
million and $0.41 per basic
share - an increase of 310% and 116% compared to the second
quarter of 2021, respectively, primarily due to contributions from
the Transaction and related synergies, demonstrating the strength
and scale of the combined business. In addition, higher oil and
natural gas prices resulted in improved energy market conditions
and increased activity levels in a number of the Corporation's
operating areas, which led to higher processing and disposal
volumes at our Midstream Infrastructure facilities and landfills
and increased demand for services related to drilling and
completion activity within the Environmental and Fluid Management
segment.
- Adjusted EBITDA margin of 36% - increased from 26% in
the second quarter of 2021, due to the positive impact from the
cost savings mentioned above and higher revenue contributing to
improved fixed cost absorption, particularly in the service lines
impacted by the increased drilling and completion activity.
- Funds flow from operations of $80
million - an increase of $63
million from the prior year comparative period, or 136% per
basic share, driven by the increase in Adjusted EBITDA, partially
offset by higher interest payments of $37
million in the quarter, including semi-annual interest
coupon payments on the Corporation's fixed debt.
- Discretionary free cash flow of $66
million - which was used primarily, in addition to our
revolving credit facility, to purchase and settle US$77 million aggregate principal amount of our
2025 senior secured 11% notes, as well as fund the Corporation's
quarterly dividend, transaction related costs and growth capital
expenditures. At June 30, 2022,
SECURE carried Working Capital3 of $199 million, an increase of $12 million in the quarter.
- G&A expense before DD&A and share-based compensation
as a percentage of revenue (excluding oil purchase and resale) of
8% - an improvement of 3% compared to 11% in the second quarter
of 2021, driven by synergies related to the Transaction and
supported by increased activity levels.
- Improved our Total Debt to EBITDA covenant
ratio4 to 2.5x - Adjusted EBITDA and
cash generation was supported by an improved commodity pricing
environment, increased industry activity and a limited amount of
investment in working capital. The Corporation's ability to repay
debt was further aided as modest capital spending was required to
support our business. The debt reduction is consistent with our
current capital allocation objective to target lower debt levels
and moves us closer to achieving our near-term debt targets.
- Settled US$77 million of our
11% 2025 senior secured notes - the Corporation remains focused
on improving our capital structure and as such, the Corporation
opportunistically repurchased US$77
million aggregate principal amount of our 11% 2025 senior
secured notes in the quarter.
- Liquidity5 of $298 million - decreased by $92 million from March 31,
2022 primarily due to funding the repurchase of US$77 million aggregate principal amount of 2025
senior secured notes.
As at June 30, 2022, the Corporation
had drawn $435 million aggregate
principal amount on the revolving credit facility and a total of
$108 million of letters of credit
have been issued against SECURE's credit facilities resulting in
$298 million of Liquidity (available
capacity under SECURE's credit facilities and cash on hand, subject
to covenant restrictions).
The following table outlines SECURE's covenant ratios4,
calculated in accordance with the Corporation's credit facilities,
at June 30, 2022, and December 31, 2021:
|
June 30,
2022
|
Covenant
|
December 31,
2021
|
Senior Debt to
EBITDA
|
1.2
|
not to exceed
2.75
|
1.5
|
Total Debt to
EBITDA
|
2.5
|
not to exceed
4.5
|
3.4
|
Interest
coverage
|
4.4
|
not to be less than
2.5
|
3.4
|
- Growth capital expenditures of $2
million - related to the expansion of a water disposal
facility which is backstopped by a commercial agreement with an
existing customer at the facility.
- Sustaining capital expenditures of $17 million - related primarily to well and
facility maintenance, landfill cell expansions and asset integrity
and inspection programs.
- Declared dividends of $2
million - representing $0.0075 (0.75
cents) per common share for the quarter.
________________________________________
|
3 Capital management measure. Refer to the
"Non-GAAP and other specified financial measures" section in the Q2
2022 MD&A which information is incorporated by reference into
this news release.
|
4 Calculated in accordance with the
Corporation's credit facility agreements. Refer to the "Liquidity
and Capital Resources" section in the Q2 2022 MD&A which
information is incorporated by reference into this news
release.
|
5 Capital
management measure. Refer to the "Non-GAAP and other specified
financial measures" section in the Q2 2022 MD&A which
information is incorporated by reference into this news
release.
|
OUTLOOK
During the second half of the year, the Corporation expects the
benchmark crude oil price will continue to fluctuate, supported by
macroeconomic factors such as significant inflationary pressures,
geopolitical risk premium due to the current war in Ukraine, as well as continued changes to the
supply and demand outlook. Notwithstanding the
fluctuation in the price of benchmark crude, the economics and
producer cash flows remain robust, and therefore we expect strong
energy industry activity in the second half of the year. The
Corporation will continue to benefit from our focus on cost
control, realized synergies from the Transaction and industry
activity, including increased demand for drilling and completion
services, incremental facility volumes, increased recovered oil
revenue and crude oil marketing opportunities.
During the second half of 2022, we expect to see the
following:
- Completion of the $75 million in
synergies and cost savings. In the twelve months since the
Transaction, we have realized $67
million or 89% of synergies impacting Adjusted EBITDA on an
annual run-rate basis. We expect to execute on the remaining
$8 million of administrative and
operational synergies by the end of this year. The operational
synergies will contribute a partial benefit in 2022 with the full
run rate of $75 million cost savings
in 2023. Additional savings through initiatives such as improving
our capital structure as well as minimizing sustaining capital by
managing underutilized assets are expected to provide incremental
discretionary free cash flow beyond our $75
million cost savings target that impact Adjusted
EBITDA.
- Increased utilization at our midstream processing facilities as
higher drilling, completion and production volumes from increased
activity levels require additional treating, processing,
terminalling and disposal. The Corporation has significant capacity
to increase facility throughput and disposal with minimal
incremental fixed costs or additional capital. Higher drilling and
completion activity is expected to continue to have a positive
impact on our drilling and production services business within the
Environmental and Fluid Management segment. In addition, we have
been able to pass through price increases to offset some of the
cost pressures we are currently experiencing due to higher
inflation.
- Increased volumes at the Corporation's industrial landfills and
industrial waste facilities as both industry activity and
abandonment, remediation and reclamation activity continue to trend
higher as a result of the Canadian Federal Government's
$1.7 billion stimulus package to help
fund the closure and reclamation of orphan and inactive wells
within Alberta, Saskatchewan and British Columbia, which is scheduled to end in
the first quarter of 2023. In addition, there is direction from the
Alberta Energy Regulator requiring energy producers and other
companies that have retirement obligations related to inactive
(non-producing) wells and facilities to spend an amount each year
towards addressing those obligations (which amount has recently
been increased from $422 million to
$700 million for 2023), and a similar
program initiated by the Saskatchewan provincial government is expected
to begin in 2023. SECURE anticipates policy changes to increase
abandonment, remediation and reclamation activity to positively
impact all of SECURE's Canadian operations, particularly within the
Environmental and Fluid Management segment as a result of higher
demand for environmental site assessments, onsite abandonment,
remediation and reclamation management and decommissioning
work.
One of SECURE's key priorities remains debt repayment. As
clearly demonstrated in the first half of the year, we expect to
use discretionary free cash flow and any proceeds from non-core
asset sales to reduce debt further. We will also continue to look
for opportunities to improve our capital structure with the
ultimate goals of reducing interest costs and increasing
flexibility. As we achieve our leverage targets, in addition to
strengthening our balance sheet, we are committed to allocating
capital towards increased shareholder returns as an important
element of our capital allocation framework, as well as incremental
organic growth opportunities that provide stable cash flow. These
shareholder returns may include further debt repayment, increased
dividends, share buybacks, or a combination thereof. SECURE will
continue to work diligently to manage inflationary costs that will
likely continue through the year; including purchasing materials in
bulk, working with customers and negotiating with suppliers or
finding alternate suppliers.
We expect sustaining capital in 2022 to be approximately
$55 million, including capital
expenditures related to landfill expansions of approximately
$15 million. We expect to incur approximately $45 million of growth capital in 2022 which will
be focused on projects that contain long-term agreements and tie
into existing infrastructure that strategically aligns with our
customer needs as we both reduce costs and lower emissions. In the
first half of 2022, we spent $27
million in maintenance capital and $5
million in growth capital. Assisting customers to recycle
and reduce wherever possible continues to be part of our long-term
strategy and other opportunities such as carbon dioxide
infrastructure will continue to be evaluated as part of our
Environmental, Social and Governance ("ESG") goals and business
strategy.
Summary
In closing, industry fundamentals remain favourable and provide
support for our business outlook in the second half of 2022. Our
priorities are to achieve the remaining $8
million of run-rate synergies impacting Adjusted EBITDA,
continue to optimize operations and realize cost savings between
business units, and use our discretionary free cash flow to
strengthen our balance sheet by further reducing debt. With our
efforts to date and the continuing hard work of our employees, we
believe we are well positioned to achieve all of these priorities
in the second half of the year.
NON-GAAP AND OTHER SPECIFIED
FINANCIAL MEASURES
The Corporation uses accounting principles that are generally
accepted in Canada (the issuer's
"GAAP"), which includes International Financial Reporting Standards
("IFRS"). This news release contains certain supplementary non-GAAP
financial measures, such as Adjusted EBITDA and discretionary free
cash flow and certain non-GAAP financial ratios, such as Adjusted
EBITDA Margin, Adjusted EBITDA per share and discretionary free
cash flow per share, which do not have any standardized meaning as
prescribed by IFRS. These measures are intended as a complement to
results provided in accordance with IFRS. The Corporation believes
these measures provide additional useful information to analysts,
shareholders and other users to understand the Corporation's
financial results, profitability, cost management, liquidity and
ability to generate funds to finance its operations.
However, these measures should not be used as an alternative to
IFRS measures because they are not standardized financial measures
under IFRS and therefore might not be comparable to similar
financial measures disclosed by other companies. See the "Non-GAAP
and other specified financial measures" section of the
Corporation's MD&A for the three and six months ended
June 30, 2022 for further details,
which is incorporated by reference herein and available on SECURE's
profile at www.sedar.com and on our website at
www.secure-energy.com.
Adjusted EBITDA, Adjusted EBITDA
Margin and Adjusted EBITDA per share
Adjusted EBITDA is calculated as noted in the table below and
reflects items that the Corporation considers appropriate to adjust
given the irregular nature and relevance to comparable operations.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by
revenue (excluding oil purchase and resale). Adjusted EBITDA per
basic and diluted share is defined as Adjusted EBITDA divided by
basic and diluted weighted average common shares.
The following table reconciles the Corporation's net income
(loss), being the most directly comparable financial measure
disclosed in the Corporation's Interim Financial Statements, to
Adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
%
Change
|
2022
|
2021
|
%
Change
|
Net
income (loss) (1)
|
54
|
(13)
|
515
|
92
|
(14)
|
(757)
|
Adjustments:
|
|
|
|
|
|
|
Depreciation, depletion and amortization (1) (2)
|
21
|
30
|
(30)
|
77
|
59
|
31
|
Deferred
tax expense
|
14
|
(3)
|
(567)
|
23
|
(3)
|
(867)
|
Share-based compensation (2)
|
5
|
4
|
25
|
10
|
7
|
43
|
Interest, accretion and finance
costs (1)
|
24
|
4
|
500
|
49
|
9
|
444
|
Unrealized loss
(gain) on mark
to market transactions (3)
|
1
|
—
|
100
|
(1)
|
—
|
100
|
Other
(income) expense
|
(1)
|
2
|
(150)
|
(15)
|
2
|
(850)
|
Transaction and
related costs
|
9
|
7
|
29
|
18
|
11
|
64
|
Adjusted EBITDA
|
127
|
31
|
310
|
253
|
71
|
256
|
(1)
Prior year amounts have been restated, refer to the "Accounting
Policies" section in the Q2 2022 MD&A for additional
information.
|
(2) Included
in cost of sales and/or general and administrative expenses on the
Consolidated Statements of Comprehensive Income (Loss).
|
(3) Net
balance. Includes amounts presented in revenue and cost of sales on
the Consolidated Statements of Comprehensive Income
(Loss).
|
Discretionary Free Cash Flow and
Discretionary Free Cash Flow per share
Discretionary free cash flow is defined as funds flow from
operations adjusted for sustaining capital expenditures, and lease
payments (net of sublease receipts). The Corporation may deduct or
include additional items in its calculation of discretionary free
cash flow that are unusual, non-recurring, or non-operating in
nature. Discretionary free cash flow per basic and diluted share is
defined as discretionary free cash flow divided by basic and
diluted weighted average common shares.
The following table reconciles the Corporation's funds
flow from operations, being the most directly comparable
financial measure disclosed in the Corporation's Interim Financial
Statements, to discretionary free cash flow for the three and six
months ended June 30, 2022 and
2021.
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
% Change
|
2022
|
2021
|
% Change
|
Funds
flow from operations
|
80
|
17
|
371
|
187
|
47
|
298
|
Adjustments:
Sustaining
capital
|
(17)
|
(4)
|
325
|
(27)
|
(6)
|
350
|
Lease
liability principal payment
(net of sublease receipts)
|
(6)
|
(2)
|
200
|
(12)
|
(5)
|
140
|
Transaction and
related costs
|
9
|
7
|
29
|
18
|
11
|
64
|
Discretionary free cash flow
|
66
|
18
|
267
|
166
|
47
|
253
|
FINANCIAL STATEMENTS AND
MD&A
The Corporation's consolidated financial statements and notes
thereto and MD&A for the three and six months ended
June 30, 2022 are available on
SECURE's website at www.secure-energy.com and on SEDAR at
www.sedar.com.
SECOND Quarter 2022 Conference
Call
SECURE will host a conference call on Wednesday, July 27, 2022 at 9:00 a.m. MDT to discuss the second quarter
results. To participate in the conference call, dial 416-764-8650
or toll free 888-664-6383. To access the simultaneous webcast,
please visit www.secure-energy.com. For those unable to listen to
the live call, a taped broadcast will be available at
www.secure-energy.com and, until midnight
MDT on Wednesday, August 3, 2022 by dialing
888-390-0541 and using the pass code 786436#.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release 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
press release, the words "achieve", "advance", "anticipate",
"believe", "can be", "capacity", "commit", "continue", "could",
"deliver", "drive", "enhance", "ensure", "estimate", "execute",
"expect", "focus", "forecast", "forward", "future", "goal", "grow",
"integrate", "intend", "may", "maintain", "objective", "ongoing",
"opportunity", "outlook", "plan", "position", "potential",
"prioritize", "realize", "remain", "result", "seek", "should",
"strategy", "target" "will", "would" and similar expressions, as
they relate to SECURE, its management, or the combined company, are
intended to identify forward-looking statements. Such statements
reflect the current views of SECURE and speak only as of the date
of this press release.
In particular, this press release contains or implies
forward-looking statements pertaining but not limited to: SECURE's
priorities for the second half of 2022 and beyond, including
related to ESG, sustainability, debt reduction and strengthening
its balance sheet, and its ability to achieve such priorities;
ongoing focus on managing costs; momentum throughout SECURE's
operations; SECURE's ability to repay debt and achieve its
near-term debt targets; SECURE's ability to form new partnerships;
focusing on projects to reduce customers' emissions and ESG goals;
SECURE's ability to create sustainable energy and environmental
solutions for many decades; continued optimization of SECURE's
capital structure; fluctuations in benchmark crude oil prices,
supported by macroeconomic factors such as significant inflationary
pressures, geopolitical risk premium and continued changes to the
supply and demand outlook; using a majority of discretionary free
cash flow in 2022 to repay debt; the impact of acquisitions on
SECURE's market presence and business; SECURE's ability to execute
and deliver on the expected benefits of the Transaction, including
the continued successful integration the legacy Tervita business to
become a more
resilient, profitable and efficient business, and the timing
thereof; benefits to SECURE from its focus on cost control,
realized synergies from the Transaction and industry activity,
including increased demand for drilling and completion services,
incremental facility volumes, increased recovered oil revenue and
crude oil marketing opportunities; achieving
$8 million in synergies related to the
Transaction by the end of the year and the full $75 cost savings in 2023; improving our capital
structure and minimizing our sustaining capital by managing
underutilized assets to generate incremental discretionary free
cash flow beyond our $75 million cost
savings target; sustained inflationary pressures and increased
interest rates, their impact on SECURE's business and SECURE's
ability to manage such pressures; the impact of increased industry
activity on SECURE's business, including increased utilization at
SECURE's midstream facilities; the end of the Canadian
Federal Government's stimulus package and its impact
on SECURE's business; the impact of new or existing
mandatory spend requirements for retirement obligations on SECURE's
business, and the introduction of such
requirements; SECURE's discretionary free cash flow and the use and portion of such discretionary free cash flow
and proceeds from non-core asset sales to reduce debt; the
reduction of our more expensive debt; SECURE's ability to increase
throughput with minimal incremental fixed costs or additional
capital; growth opportunities that provide stable cash flow, and
increased shareholder returns; the form, amount and timing of
shareholder returns; SECURE's capital expenditure guidance;
sustaining and growth capital requirements focusing on projects to
reduce customers' emissions and ESG goals; the Corporation's
ability to fund its capital needs and the amount thereof; methods
and sources of liquidity to meet SECURE's financial obligations,
including adjustments to dividends, drawing on credit facilities,
issuing debt, obtaining equity financing or
divestitures; SECURE's liquidity position and access to
capital; and maintaining financial resiliency.
Forward-looking statements are based on certain assumptions that
SECURE has made in respect thereof as at the date of this press
release regarding, among other things: economic and operating
conditions, including commodity prices, crude oil and natural gas
storage levels, interest rates, exchange rates, and inflation; the
changes in market activity and growth will be consistent with
industry activity in Canada and
the U.S. and growth levels in similar phases of previous economic
cycles; the impact of the COVID-19 pandemic (including its
variants) and geopolitical events, including government responses
related thereto and their impact on global energy pricing, oil and
gas industry exploration and development activity levels and
production volumes; the ability of the Corporation to realize the
anticipated benefits of the Transaction; the resolution of the
review of the Transaction under the Competition Act on terms
acceptable to the Corporation; SECURE's ability to successfully
integrate Tervita's legacy business; anticipated sources of funding
being available to SECURE on terms favourable to SECURE; the
success of the Corporation's operations and growth projects; the
Corporation's competitive position; the Corporation's ability to
attract and retain customers (including Tervita's historic
customers); that counterparties comply with contracts in a timely
manner; that there are no unforeseen events preventing the
performance of contracts or the completion and operation of the
relevant facilities; that there are no unforeseen material costs in
relation to the Corporation's facilities and operations; that
prevailing regulatory, tax and environmental laws and regulations
apply or are introduced as expected, and the timing of such
introduction; the end of the Canadian Federal Government's stimulus
package; increases to the Corporation's share price and market
capitalization over the long term; the Corporation's ability to
repay debt and return capital to shareholders; the Corporation's
ability to obtain and retain qualified staff and equipment in a
timely and cost-efficient manner; the Corporation's ability to
access capital and insurance; operating and borrowing costs,
including costs associated with the acquisition and maintenance of
equipment and property the ability of the Corporation and our
subsidiaries to successfully market our services in the WCSB and
the U.S.; an increased focus on ESG, sustainability and
environmental considerations in the oil and gas industry; the
impacts of climate-change on the Corporation's business; the
current business environment remaining substantially unchanged;
present and anticipated programs and expansion plans of other
organizations operating in the energy service industry resulting in
an increased demand for the Corporation's and our subsidiaries'
services; future acquisition and maintenance costs; the
Corporation's ability to achieve its ESG and sustainability targets
and commitments; and other risks and uncertainties described in the
Corporation's annual information form for the year ended
December 31, 2021 and from time to
time in filings made by SECURE with securities regulatory
authorities.
Forward-looking statements involve significant known and unknown
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: general global financial conditions,
including general economic conditions in Canada and the U.S.; the effect of the
COVID-19 pandemic (including its variants) and geopolitical events
and governmental responses thereto on economic conditions,
commodity prices and the Corporation's business and operations;
changes in the level of capital expenditures made by oil and
natural gas producers and the resultant effect on demand for
oilfield services during drilling and completion of oil and natural
gas wells; volatility in market prices for oil and natural gas and
the effect of this volatility on the demand for oilfield services
generally; a transition to alternative energy sources; the
Corporation's inability to retain customers; risks inherent in the
energy services industry, including physical climate-related
impacts; the Corporation's ability to generate sufficient cash flow
from operations to meet our current and future obligations; the
seasonal nature of the oil and gas industry; increases in debt
service charges including changes in the interest rates charged
under the Corporation's current and future debt agreements;
inflation and supply chain disruptions; the Corporation's ability
to access external sources of debt and equity capital and
insurance; disruptions to our operations resulting from events out
of our control; the timing and amount of stimulus packages and
government grants relating to site rehabilitation programs; the
cost of compliance with and changes in legislation and the
regulatory and taxation environment, including uncertainties with
respect to implementing binding targets for reductions of emissions
and the regulation of hydraulic fracturing services and services
relating to the transportation of dangerous goods; uncertainties in
weather and temperature affecting the duration of the oilfield
service periods and the activities that can be completed;
competition; impairment losses on physical assets; sourcing,
pricing and availability of raw materials, consumables, component
parts, equipment, suppliers, facilities, and skilled management,
technical and field personnel; supply chain disruption; the
Corporation's ability to effectively complete acquisition and
divestiture transactions on acceptable terms or at all; a failure
to realize the benefits of the Transaction and risks related to the
associated business integration; the inaccuracy of pro forma
information prepared in connection with the Transaction; risks
related to a new business mix and significant shareholder;
liabilities and risks, including environmental liabilities and
risks, inherent in oil and natural gas operations, including those
associated with the Transaction; the Corporation's ability to
integrate technological advances and match advances of our
competition; credit, commodity price and foreign currency risk to
which the Corporation is exposed in the conduct of our business;
compliance with the restrictive covenants in the Corporation's
current and future debt agreements; the Corporation's or our
customers' ability to perform their obligations under long-term
contracts; misalignment with our partners and the operation of
jointly owned assets; the Corporation's ability to source products
and services on acceptable terms or at all; the Corporation's
ability to retain key or qualified personnel; uncertainty relating
to trade relations and associated supply disruptions; the effect of
changes in government and actions taken by governments in
jurisdictions in which the Corporation operates, including in the
U.S.; the effect of climate change activism on our operations and
ability to access capital and insurance; exposure of the
Corporation's information technology systems to external threats
and the effects of any unauthorized access to such system and
potential disclosure of confidential information; the Corporation's
ability to bid on new contracts and renew existing contracts;
potential closure and post-closure costs associated with landfills
operated by the Corporation; the Corporation's ability to protect
our proprietary technology and our intellectual property rights;
legal proceedings and regulatory actions to which the Corporation
may become subject, including in connection with the review of the
Transaction under the Competition Act and any claims for
infringement of a third parties' intellectual property rights; the
Corporation's ability to meet its ESG targets or commitments and
the costs associated therewith; claims by, and consultation with,
Indigenous Peoples in connection with project approval; disclosure
controls and internal controls over financial reporting; and those
risk factors identified in the Corporation's annual information
form for the year ended December 31,
2021 and from time to time in filings made by the
Corporation with securities regulatory authorities.
Although forward-looking statements contained in this press
release 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 press release are expressly
qualified by this cautionary statement. Unless otherwise required
by applicable securities laws, SECURE does not intend, or assume
any obligation, to update these forward-looking statements.
ABOUT SECURE
SECURE is a publicly traded energy infrastructure and
environmental business listed on the Toronto Stock Exchange
("TSX"). SECURE provides industry leading midstream infrastructure
and environmental and fluid management to predominantly upstream
oil and natural gas companies operating in western Canada and certain regions in the U.S.
SECURE's Midstream Infrastructure business segment includes a
network of midstream processing and storage facilities, crude oil
and water pipelines, and crude by rail terminals located throughout
key resource plays in western Canada, North
Dakota and Oklahoma.
SECURE's midstream infrastructure operations generate cash flows
from oil production processing and disposal, produced water
disposal, and crude oil storage, logistics, and marketing. SECURE's
Environmental and Fluid Management business segment includes a
network of industrial landfills, hazardous and non-hazardous waste
management and disposal, onsite abandonment, environmental
solutions for site remediation and reclamation, bio-remediation and
technologies, waste treatment & recycling, emergency response,
rail services, metal recycling services, as well as fluid
management for drilling, completion and production
activities.
SOURCE SECURE Energy Services Inc.