Click here to close now.

Welcome!

News Feed Item

Trican Well Service Ltd. Q1 2014 Update and Outlook

CALGARY, ALBERTA -- (Marketwired) -- 03/31/14 -- Trican Well Service Ltd. ("Trican", the "Company", "we" or "our") (TSX: TCW) anticipates that consolidated financial results for the first quarter of 2014 will be negatively impacted by pricing pressure and cost inflation in Canada and unfavorable weather conditions in the United States.

We estimate consolidated operating income(i) for the first quarter of 2014 to be between $30 million and $40 million. This estimate is subject to completion of our first quarter interim financial report, which we expect to release on May 7, 2014. Our Audit Committee has reviewed the financial outlook and information provided in this document.

Canadian Operations

We expect first quarter 2014 Canadian operating income to be up slightly compared to the fourth quarter of 2013 on higher revenue and activity levels, offset partially by lower operating margins. Canadian financial results for the first quarter of 2014 are expected to be negatively impacted by continued pricing pressure in the region. Equipment utilization has been very strong throughout the first quarter; however, lower pricing experienced at the end of the fourth quarter in 2013 has been carried throughout all of the first quarter of 2014. As a result, first quarter Canadian pricing is expected to be down slightly on a sequential basis.

Additionally, cost increases for fuel and third party hauling are expected to have a negative impact on first quarter Canadian operating margins. As a percentage of revenue, fuel and third party hauling expenses are consistent with the fourth quarter of 2013, but are up substantially compared to the first quarter of 2013. A weaker Canadian dollar, both sequentially and year-over-year, is also expected to have a negative impact on operating margins as a portion of our Canadian materials and operating costs are incurred in U.S. dollars.

Despite the disappointing first quarter results in Canada, our outlook for this region remains positive. Cash flows for our customers are expected to increase due to higher commodity prices combined with a strengthening U.S. dollar, which we expect will lead to higher year-over-year activity in the second half of 2014. With strong Canadian activity levels anticipated for the second half of 2014, we expect to implement a pricing increase in the second quarter that will be phased in for third quarter work programs. Rising costs combined with lower pricing have led to Canadian financial results that are below our return on capital targets and we believe that a price increase is needed and justified given the current operating environment in Canada.

US Operations

Weather related operational delays for our U.S. fracturing crews in the Marcellus, Oklahoma and Permian regions negatively impacted equipment utilization and financial results for January and February. Despite these delays, first quarter U.S. financial results are expected to increase sequentially due to utilization improvements across several of our U.S. regions; however, operating income, while improved relative to the fourth quarter of 2013, is still expected to be slightly negative. Activity and utilization for March has been strong for our U.S. operations and we believe this indicates improving fundamentals for this region. We have also seen operational improvements for our U.S. business during the first quarter that are positively impacting our U.S. equipment utilization. As a result, we expect to see sequential improvements in U.S. operating margins throughout 2014.

International Operations

Russia and Kazakhstan comprise the majority of our international results, and financial results for the first quarter of 2014 are projected to meet expectations. As expected, activity in Russia has been negatively impacted by cold weather throughout most of January and February; however, first quarter Russian financial results are expected to be consistent with the first quarter of 2013. In addition, first quarter international results are expected to be negatively impacted by start-up costs in Saudi Arabia and Colombia as we will not be completing our first jobs in these regions until early in the second quarter. We have been awarded contracts in these regions and will be looking to add additional contracts as the year progresses.

(i) Operating income is a measure that is not recognized under International Financial Reporting Standards (IFRS). Management of Trican believes that operating income is a useful supplemental measure. Operating income provides investors with an indication of earnings before depreciation, foreign exchange, other income (loss), taxes and interest. Investors should be cautioned that operating income should not be construed as an alternative to net income (loss) and cash flow from operations determined in accordance with IFRS as an indicator of Trican's performance. Trican's method of calculating operating income may differ from that of other companies and accordingly may not be comparable to measures used by other companies.

FORWARD-LOOKING INFORMATION

This document contains certain forward-looking information and financial outlook or future orientated financial information based on Trican's current expectations, estimates, projections and assumptions that were made by the Company in light of information available at the time the statement was made. Forward-looking information and financial outlook or future orientated financial information that address expectations or projections about the future, and other statements and information about the Company's strategy for growth, expected and future expenditures, costs, operating and financial results, future financing and capital activities are forward-looking statements. Some forward-looking information and financial outlook or future orientated financial information are identified by the use of terms and phrases such as "anticipate," "achieve", "achievable," "believe," "estimate," "expect," "intention", "plan", "planned", and other similar terms and phrases. This forward-looking information and financial outlook or future orientated financial information speak only as of the date of this document, other than the update in respect of our first quarter earnings per share and operating income that will be provided upon the release of our complete financial results for the first quarter of 2014, and we do not undertake to publicly update this forward-looking information and financial outlook or future orientated financial information except in accordance with applicable securities laws. This forward-looking information and financial outlook or future orientated financial information includes, among others:


--  The expectation that consolidated financial results for the first
    quarter of 2014 will be negatively impacted by pricing pressure and cost
    inflation in Canada and unfavorable weather conditions in the United
    States;
--  The expectation that consolidated operating income for the first quarter
    of 2014 will be between $30 million and $40 million;
--  The expectation that our first quarter interim financial report will be
    released on May 7, 2014;
--  The expectation that first quarter 2014 Canadian operating income will
    be up slightly compared to the fourth quarter of 2013 on higher revenue
    and activity levels, offset partially by lower operating margins;
--  The expectation that Canadian financial results for the first quarter of
    2014 will be negatively impacted by continued pricing pressure in the
    region;
--  The expectation that first quarter Canadian pricing will be down
    slightly on a sequential basis;
--  The expectation that cost increases for fuel and third party hauling
    will have a negative impact on first quarter Canadian operating margins;
--  The expectation that a weaker Canadian dollar, both sequentially and
    year-over-year, will have a negative impact on Canadian operating
    margins;
--  The expectation that cash flows for our customers will increase due to
    higher commodity prices combined with a strengthening U.S. dollar;
--  The expectation that higher cash flows for our Canadian customers will
    lead to higher year-over-year Canadian activity in the second half of
    2014;
--  The expectation that we will implement a pricing increase in the second
    quarter that will be phased in for third quarter work programs;
--  The belief that a price increase is needed and justified given the
    current operating environment in Canada;
--  The expectation that, despite weather-related delays, first quarter U.S.
    financial results will increase sequentially due to utilization
    improvements across several of our U.S. regions;
--  The expectation that U.S. operating income, while improved relative to
    the fourth quarter of 2013, will be slightly negative;
--  The belief that strong activity and utilization for our U.S. operations
    in March indicates improving fundamentals for this region;
--  The expectations that in U.S. operating margins will improve
    sequentially throughout 2014;
--  The expectation that financial results for our Russian and Kazakhstan
    regions will meet expectations;
--  The expectation that Russian financial results will be consistent with
    the first quarter of 2013;
--  The expectation that first quarter international results will be
    negatively impacted by start-up costs in Saudi Arabia and Colombia as we
    will not be completing our first jobs in these regions until early in
    the second quarter;
--  The intention to add contracts in Saudi Arabia and Colombia as the year
    progresses.

Forward-looking information and financial outlook or future orientated financial information is based on current expectations, estimates, projections and assumptions, which we believe are reasonable but which may prove to be incorrect. Trican's actual results may differ materially from those expressed or implied and therefore such forward-looking information and financial outlook or future orientated financial information 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 or future orientated financial information 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: 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. The foregoing important factors are not exhaustive. In addition, actual results could differ materially from those anticipated in forward-looking information and financial outlook or future orientated financial information provided herein as a result of the risk factors set forth under the section entitled "Risks Factors" in our Annual Information Form dated March 21, 2014. Readers are also referred to the risk factors and assumptions described in other documents filed by the Company from time to time with securities regulatory authorities.

Any financial outlook or future oriented financial information in this document, as defined by applicable securities legislation, has been approved by management. Such financial outlook or future oriented financial information is based on assumptions that management believes to be reasonable under the circumstances and is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

Additional information regarding Trican including Trican's most recent annual information form is available under Trican's profile on SEDAR (www.sedar.com).

Headquartered in Calgary, Alberta, Trican has operations in Canada, the United States, Russia, Kazakhstan, Australia, Algeria, Norway, Colombia and Saudi Arabia. Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.

Contacts:
Requests for shareholder information should be directed to:
Trican Well Service Ltd.
Dale Dusterhoft
Chief Executive Officer
[email protected]

Trican Well Service Ltd.
Michael Baldwin
Senior Vice President, Finance & CFO
[email protected]

Trican Well Service Ltd.
Gary Summach
Director of Reporting and Investor Relations
[email protected]

Trican Well Service Ltd.
2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8
(403) 266 - 0202
(403) 237 - 7716 (FAX)
www.trican.ca

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
The cloud has transformed how we think about software quality. Instead of preventing failures, we must focus on automatic recovery from failure. In other words, resilience trumps traditional quality measures. Continuous delivery models further squeeze traditional notions of quality. Remember the venerable project management Iron Triangle? Among time, scope, and cost, you can only fix two or quality will suffer. Only in today's DevOps world, continuous testing, integration, and deployment upend...
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
To many people, IoT is a buzzword whose value is not understood. Many people think IoT is all about wearables and home automation. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed some incredible game-changing use cases and how they are transforming industries like agriculture, manufacturing, health care, and smart cities. He will discuss cool technologies like smart dust, robotics, smart labels, and much more. Prepare...
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of pro...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.