Trican Announces 2013 Russian Contract Update
January 14 2013 - 10:40PM
Marketwired
Trican Well Service Ltd. (TSX:TCW) is pleased to announce the
results of the 2013 Russian contract tendering season. Management
is currently estimating 2013 revenue to increase by approximately
25%, as measured in Russian roubles, relative to 2012.
Customer interest in horizontal completions and multi-stage
fracturing is significantly increasing and is expected to represent
20% of Russian fracturing revenues in 2013 compared to 12% in 2012.
This is expected to improve equipment utilization and fits well
with Trican's completion tool service line.
The estimated revenue increase is based on a 2% expected
increase in overall activity combined with a 23% expected increase
in average revenue per job. The expected increase in average
revenue per job is the combined result of the trend towards larger
fracturing job sizes in multi-stage completions, a shift in the
sales mix toward more fracturing work relative to coiled tubing and
cementing and a modest increase in pricing. Bidding for the Russian
contracts was very aggressive with a number of competitors
attempting to gain market share, which limited the year-over-year
price increases obtained.
A high rate of inflation in the Russian market and strong
competition continues to challenge the Russian operations
profitability. That being said, management is anticipating moderate
improvements in the operating income margin in 2013 as a result of
a shift in our work scope to higher margin work and multi-stage
activity, including completion tool revenue, and a continued focus
on optimizing the Russian operations' cost structure.
The actual 2013 financial results for our Russian operations
could be impacted by revisions in customer budgets, exploration
levels, the price of commodities and general economic conditions in
the Russian market.
In summary, management is pleased with the results of the 2013
tenders. Activity and pricing in the Russian market continue to
strengthen and there is a strong customer interest in the
development of oil and gas reservoirs utilizing state of the art
technology.
Headquartered in Calgary, Alberta, Trican has operations in
Canada, the United States, Russia, Kazakhstan, Australia and North
Africa. Trican provides a comprehensive array of specialized
products, equipment and services that are used during the
exploration and development of oil and gas reserves.
FORWARD-LOOKING INFORMATION
This document contains information that constitutes
forward-looking information and financial outlook within the
meaning of applicable securities legislation. This forward-looking
information and financial outlook is identified by the use of terms
and phrases such as "anticipate," "achieve", "achievable,"
"believe," "estimate," "expect," "intend", "plan", "planned", and
other similar terms and phrases. This information and outlook
speaks only as of the date of this document and we do not undertake
to publicly update the forward-looking information and financial
outlook contained in this document except in accordance with
applicable securities laws. This forward-looking information and
financial outlook includes:
-- The expectation that 2013 Russian revenue will increase by 25%, as
measured in Russian roubles, compared to 2012;
-- The expectation that horizontal completions and multi-stage fracturing
is significantly increasing in Russia and is expected to represent 20%
of Russian fracturing revenues in 2013;
-- The expectation that the estimated revenue increase is based on a 2%
expected increase in overall activity combined with a 23% expected
increase in average revenue per job;
-- The expectation that the increase in average revenue per job is the
combined result of, the trend towards larger fracturing job sizes in
multi-stage completions, a shift in the sales mix toward more fracturing
work relative to coiled tubing and cementing and a modest increase in
pricing;
-- The expectation that the operating income margin will increase in 2013
as a result of a shift in our work scope to higher margin work and
multi-stage activity, including completion tool revenue, and a continued
focus on optimizing the Russian operations' cost structure.
Forward-looking information and financial outlook is based on
current expectations, estimates, projections and assumptions, which
we believe are reasonable but which may prove to be incorrect and
therefore such forward-looking information and financial outlook
should not be unduly relied upon. In addition to other factors and
assumptions which may be identified in this document, assumptions
have been made regarding, among other things: industry activity;
the general stability of the economic and political environment;
effect of market conditions on demand for the Company's products
and services; the ability to obtain qualified staff, equipment and
services in a timely and cost efficient manner; the ability to
operate its business in a safe, efficient and effective manner; the
performance and characteristics of various business segments; the
effect of current plans; the timing and costs of capital
expenditures; future oil and natural gas prices; currency, exchange
and interest rates; the regulatory framework regarding royalties,
taxes and environmental matters in the jurisdictions in which the
Company operates; and the ability of the Company to successfully
market its products and services.
Forward-looking information and financial outlook is subject to
a number of risks and uncertainties, which could cause actual
results to differ materially from those anticipated. These risks
and uncertainties include: customers' completion of expected work
programs; fluctuating prices for crude oil and natural gas; changes
in drilling activity; general global economic, political and
business conditions; weather conditions; regulatory changes; the
successful exploitation and integration of technology; customer
acceptance of technology; success in obtaining issued patents; the
potential development of competing technologies by market
competitors; and availability of products, qualified personnel,
manufacturing capacity and raw materials, and Trican's successful
performance under contracts. In addition, actual results could
differ materially from those anticipated in the forward-looking
information and financial outlook provided herein as a result of
the risk factors set forth under the section entitled "Risk
Factors" in our Annual Information Form dated March 22, 2012.
Contacts: Trican Well Service Ltd. Dale Dusterhoft Chief
Executive Officer (403) 266-0202 (403) 237-7716
(FAX)ddusterhoft@trican.ca Trican Well Service Ltd. Michael Baldwin
Vice President, Finance & CFO (403) 266-0202 (403) 237-7716
(FAX)mbaldwin@trican.ca Trican Well Service Ltd. Gary Summach
Director of Reporting and Investor Relations (403) 266-0202 (403)
237-7716 (FAX)gsummach@trican.ca Trican Well Service Ltd. 2900,
645- 7th Avenue S.W. Calgary, Alberta T2P 4G8 www.trican.ca
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