CALGARY,
Dec. 15, 2014 /CNW/ - Western Energy
Services Corp. (the "Company" or "Western") (TSX:WRG)
is pleased to announce its planned 2015 capital expenditure budget
and a Normal Course Issuer Bid (the "Bid").
Capital Budget
Western's planned 2015 capital expenditure budget is expected to
total approximately $64 million,
which includes $22 million in carry
forward from Western's 2014 capital program, $6 million in expansion capital, and $36 million in maintenance capital.
The $22 million of
carry forward from Western's 2014 capital program relates to the
completion of two 5,000m telescopic ELR double drilling rigs, one
6,000m ELR AC triple pad drilling rig and one slant well servicing
rig. Due to the recent decline in commodity prices, and the
potential for an extended downturn in oilfield service activity,
one of the previously announced 6,000m ELR AC triple pad drilling
rigs has been postponed.
The expansion capital of $6 million relates to additional oilfield rental
equipment for Western's division Aero Rental Services.
The maintenance capital of $36 million includes $27
million for the contract drilling segment and $9 million for the production services
segment. Included in the maintenance capital budget is
$6 million related to rotational
equipment.
Western believes the 2015 capital budget
provides a prudent use of cash resources and ensures that it
continues to maintain its balance sheet flexibility allowing for
the execution on strategic opportunities as they arise, or
alternatively adjust downward if necessary should there be a
prolonged downturn in oilfield service activity. This budget
demonstrates the Company's commitment to maintaining Western's
premier drilling and well servicing rig fleets while expanding
Western's strategic presence in the oilfield rental equipment
market. Western will continue to evaluate and expand its
operations in a disciplined manner and make any required
adjustments to its capital program as customer demand improves.
Normal Course Issuer Bid
The Company also announces that a Notice of Intention to make a
Normal Course Issuer Bid, which has been approved by its Board of
Directors (the "Board"), has been filed with and accepted by
the Toronto Stock Exchange (the "TSX"). The Company's Board
and management believe that the purchase by the Company of its
outstanding Common Shares pursuant to the Bid constitutes an
attractive and appropriate investment of corporate funds. The
Company's Board and management further believe that market prices
of the Common Shares do not properly reflect the underlying value
of the Company's assets and business. The primary purposes of the
Bid are to provide extra liquidity to shareholders of Western who
wish to dispose of their Common Shares, and to enhance the
potential future value of the Common Shares which remain
outstanding.
Pursuant to the Bid, Western may purchase for
cancellation up to 5,550,000 Common Shares in the capital of
Western ("Common Shares"), which is 9.9% of Western's public
float as at November 30, 2014. As of
November 30, 2014, Western had 74.9
million issued and outstanding Common Shares. Pursuant to the rules
of the TSX, the maximum number of Common Shares that the Company
may purchase in any one day is 55,536 Common Shares or 25% of the
Company's average daily trading volume of 222,145 Common Shares on
the TSX. Western may also make one block purchase per
calendar week which exceeds the daily purchase restriction. Any
Common Shares purchased pursuant to the Bid will be cancelled by
the Company.
The Bid will commence on December 17, 2014 and will terminate on the
earlier of: (i) December 16, 2015;
and (ii) the date on which the maximum number of Common Shares are
purchased pursuant to the Bid. Purchases of Common Shares
under the Bid will be effected through the facilities of the TSX or
any other exchange designated by the Ontario Securities Commission for the purposes
of section 101.2 of the Securities Act (Ontario) at the market price at the time of
purchase.
Peters & Co. Limited ("Peters") has been
appointed as the broker firm responsible for making purchases of
Common Shares under the Bid on behalf of Western pursuant to an
automatic purchase plan agreement dated December 15, 2014 between Western and
Peters (the "APPA"). The APPA permits Peters to
purchase Common Shares under the Bid during internal blackout
periods when the Company would not be permitted to trade in its
shares, including regularly scheduled quarterly blackout periods.
Such purchases would be pursued at the sole discretion of Peters
based on parameters established by Western prior to any blackout
period in accordance with TSX rules, applicable securities laws and
the terms of the agreement between the broker and Western.
About Western Energy Services Corp.
Western is an oilfield service company which provides contract
drilling services in Canada
through its division Horizon Drilling and in the United States through its wholly-owned
subsidiary Stoneham Drilling Corporation. In Canada, Western also provides well servicing
through its division Eagle Well Servicing and provides oilfield
rental services through its division Aero Rental Services.
Forward-Looking Statements and
Information
This press release contains certain statements or disclosures
relating to Western that are based on the expectations of Western
as well as assumptions made by and information currently available
to Western which may constitute forward-looking information under
applicable securities laws. All such statements and disclosures,
other than those of historical fact, which address activities,
events, outcomes, results or developments that Western anticipates
or expects may, or will occur in the future (in whole or part)
should be considered forward-looking information. In some cases
forward-looking information can be identified by terms such as
"forecast", "future," "may", "will", "expect", "anticipate",
"believe", "potential", "enable", "plan", "continue",
"contemplate", "pro-forma", or other comparable terminology.
In particular, forward-looking information in
this press release includes, but is not limited to, statements
relating to Western's 2015 capital budget for maintenance and
expansion capital, including the portion of the 2014 capital
program being carried forward to 2015; the deployment into the
field of certain drilling rigs and well servicing rigs; and the
purchase of Common Shares under the Normal Course Issuer Bid.
Although Western believes that the expectations
and assumptions on which such forward-looking statements and
information are based on are reasonable, undue reliance should not
be placed on the forward-looking statements and information as
Western cannot give any assurance that they will prove to be
correct. Since forward-looking statements and information address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, general
industry, economic, market and business conditions. Readers are
cautioned that the foregoing list of risks, uncertainties and
assumptions are not exhaustive. Additional information on risks,
uncertainties, assumptions and other risk factors that could affect
Western's operations and financial results are included in
Western's annual information form which may be accessed through the
SEDAR website at www.sedar.com. The forward-looking statements and
information contained in this press release are made as of the date
hereof and Western does not undertake any obligation to update
publicly or revise any forward-looking statements and information,
whether as a result of new information, future events or otherwise,
unless so required by applicable securities laws.
SOURCE Western Energy Services Corp.