CALGARY, June 12, 2014 /CNW/ - SECURE Energy Services Inc. ("SECURE" or the "Corporation") (TSX:SES) today announced that it has consolidated all of its operating entities and services under the SECURE Energy Services brand name and provided an update in respect of second quarter operations.
BRAND NAME CONSOLIDATION
Acquisitions have always been a part of the Corporation's growth strategy, with the following brands joining the family over the past seven years: Marquis Alliance, XL Fluid Systems, Imperial Drilling Fluids, Target Rentals, Frontline Integrated Services, Infinity Oilfield Services, NextGeneration Solutions, Dynomite Environmental Contracting and Dril-X Fluids. The Corporation has also acquired assets from Heemskirk Canada, New West Drilling Fluids and Quadrise Canada.
Consolidated under the SECURE brand name the Corporation now has over 1,300 employees, over $2.5 billion in enterprise value and carries on operations in 4 Canadian provinces and 2 U.S. states. Its operations are grouped under three divisions: Processing, Recovery, & Disposal ("PRD"), Drilling Services ("DS") and OnSite Services ("OS").
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. "Many of our clients are increasingly seeing the value of integrated and innovative services", said Rene Amirault, President and CEO at SECURE. "As their services partner, SECURE can deliver total cost and operational efficiencies along with clear accountability for quality, safety, and environmental protection."
Much of the effort required to implement the brand consolidation has been completed, with full implementation expected by the end of the year.
SECOND QUARTER OPERATIONAL UPDATE
The first two months of operations for the second quarter of 2014 have delivered exceptional results with higher than anticipated demand for the Corporation's services in all three divisions and increased operating days compared to the same period in 2013. Due to the late onset of spring break-up and the prolonged winter drilling season, activity levels were above expectations during April and May that have typically been subject to a significant slowdown in the industry as a whole. As a result, these first two months of the second quarter of 2014 are above management's expectations thus far.
SECURE also completed and commissioned both the Edson, Alberta and Keene, North Dakota full service terminals in April of 2014 and continued to execute on acquisition strategies both in the DS and OS divisions that have been accretive to overall results.
As a result of the factors above, SECURE anticipates consolidated net earnings excluding depreciation, depletion, amortization and accretion, share-based payments expense, interest, and taxes ("EBITDA") for the first two months of the second quarter of 2014 to be between $19 million and $24 million. These exceptional results would be considered significantly above management's expectations as the impact of spring break-up in any given year is difficult to predict. In addition, underlying market fundamentals, spending expectations by producers, and future growth prospects are all trending above Q2 2013 levels, and as a result management anticipates strong results for the month of June and for the second quarter in total. This estimate is subject to completion of the second quarter interim financial report and review by SECURE's auditors. SECURE will release the second quarter interim report on August 12, 2014.
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: anticipated EBITDA for the first two months of the second quarter ended June 30, 2014; performance expectations for the month of June and the second quarter ended June 30, 2014, in total; general market conditions; activity levels in the oil and gas sector including market fundamentals and drilling levels; demand for the Corporation's services; expansion strategy; completion of facilities; the impact of new facilities on the Corporation's financial and operational performance; and acquisition strategy.
Forward-looking statements concerning expected operating and economic conditions are based upon estimated 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 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
The Corporation uses accounting principles that are generally accepted in Canada (the issuer's "GAAP"), which includes, International Financial Reporting Standards ("IFRS"). In addition, this press release refers to the Non-GAAP financial measure EBITDA. EBITDA is not a recognized measure under IFRS and does not have any standardized meaning prescribed by IFRS. EBITDA as used by the Corporation may not be comparable to similar measures presented by other reporting issuers. See the management's discussion and analysis available atwww.sedar.com for a reconciliation of historical EBITDA to the equivalent IFRS measure. Management believes that in addition to net earnings, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Corporation's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
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 owns and operates midstream infrastructure and provides environmental services and innovative products to upstream oil and natural gas companies operating in the Western Canadian Sedimentary Basin ("WCSB") and the Rocky Mountain Region in the United States.
The Corporation operates three divisions:
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, 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.
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.
OS: The operations of the OS division include integrated fluids management through frac pond rentals; waste container services; environmental services which include pre-drilling assessment planning, drilling waste management, remediation and reclamation of former wellsites, facilities, commercial, and industrial properties, and laboratory services; pipeline integrity (inspection, excavation, repair, replacement and rehabilitation); demolition, and decommissioning. These services are offered throughout the WCSB.
