|By Marketwired .||
|July 10, 2014 08:07 AM EDT||
DENVER, CO -- (Marketwired) -- 07/10/14 -- ENSERVCO Corporation (NYSE MKT: ENSV)
- $7 Million Added to 2014 Capex Budget; Full-Year Budget Totals $16 Million
- Annual Revenue Potential of New Equipment Exceeds $35 Million
- Company Initiating Acidizing and Hot Oiling Programs with Multiple Customers
- Management Provides Update on Anticipated Second Quarter Financial Results
ENSERVCO Corporation (NYSE MKT: ENSV), a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, today provided an update on its 2014 capital expenditure plan and recent operational developments.
2014 CAPEX PLAN
ENSERVCO has added $7 million to its previously announced $9 million capital expenditures plan for 2014. The additional investments will go toward the fabrication of eight frac water "mega" heaters, six hot oiling units and two acidizing units. Annual revenue potential from the additional equipment is estimated to be at least $15 million bringing the estimated annual revenue potential for the entire $16 million 2014 capex plan to more than $35 million.
New frac water heating units designed by ENSERVCO during the past year (being referenced to as mega heaters by the Company), double the capacity of ENSERVCO's legacy frac water heating units (previously referred to as "boxes"). The 18 mega heaters planned under the combined 2014 capex program will therefore be equivalent in both heating and revenue potential to 36 of the Company's prior boxes. In addition, the Company anticipates higher operating margins from efficiencies that should be realized in both labor and fuel expenses from the new design.
In summary, the total capex plan should result in a 2014 year-end equipment fleet of (i) the equivalent of 80 legacy frac water heating units, up from 42 at the end of 2013; (ii) 41 hot oiling units, up from 27; and (iii) seven acidizing units, up from three. Six additional hot oil units from the 2014 plan are scheduled for delivery in the first quarter of 2015.
To date, fabrication is on schedule and the Company has begun receiving and deploying its first hot oil and acidizing units. Due to recent limited availability of specialized trucks required to fabricate acidizing units, management has re-allocated a portion of the initial $9 million in capex toward the construction of acidizing docks and related equipment, and reduced to two the number of acidizing units which, as mentioned, have been received. The remaining two units are now included in the second phase of spending.
As previously announced, the first phase of spending is being funded from internal cash flow. Management plans to fund the second phase with bank financing and is currently reviewing term sheets from two leading commercial lenders. Details of the financing and a detailed deployment schedule for the equipment will be presented during the Company's second quarter earnings announcement in mid-August.
"The decision to increase our capital investments was based on detailed discussions with customers about their expanding service needs and our expansion into new markets," said Rick Kasch, president and CEO. "Much of this demand is for non-seasonal well maintenance work. In recent weeks, we have been commissioned by multiple customers to initiate ongoing well acidizing and hot oiling programs in both our Rocky Mountain service region and in Texas. This work was previously performed by other service providers, and represents an expansion of our market share in very active oil and gas fields."
Kasch added, "These programs, which should represent several million dollars in additional annual revenue, include regular acidizing of more than 1,000 wells for multiple customers operating in central Wyoming's CO2 flood fields. In addition, later in the third quarter, we expect to commence acidizing programs for three companies in the Texas Panhandle region. This year-round work should lead to a strong improvement in our third quarter financial results versus the third quarter last year."
SECOND QUARTER OPERATIONS
The second quarter has historically been one of the Company's two slowest due to the wind down of the seasonal frac water heating work. The Company indicated that despite an almost $1 million increase in second quarter hot oiling revenues versus last year's second quarter, total revenue is expected to be approximately $600,000 below the $7.9 million reported in its 2013 second quarter. The anticipated decline is principally due to a three-week halt in frac water heating for a large customer in the DJ Basin. The stoppage resulted from a well-site accident on a frac job for which ENSERVCO was heating water. The accident triggered an incident review and evaluation of ENSERVCO's safety procedures in the DJ Basin by the customer. The incident analysis determined the accident resulted from the failure of a component on another service provider's equipment. Once the customer's safety evaluation was completed, ENSERVCO was cleared to restart services. However, by the time clearance was obtained, the heating season had slowed significantly and the lost revenue could not be recovered.
Kasch said the Company expects to report a second quarter operating loss of approximately $1 million versus operating income of $550,000 in the same quarter last year. The anticipated decline is due to (i) the reduction in revenue mentioned above; (ii) the addition of safety coordinators during 2013 at each of the Company's locations as a part its commitment to high safety standards; (iii) higher maintenance and repair costs associated with the Company's expanded service fleet; and (iv) the labor costs incurred in retaining the crews waiting for the re-start of activity with the aforementioned large DJ Basin customer.
Through its various operating subsidiaries, ENSERVCO has emerged as one of the energy service industry's leading providers of hot oiling, acidizing, frac-water heating and fluid management services. The Company owns and operates a fleet of more than 230 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO serves customers in seven major domestic oil and gas fields, and operates in Colorado, Kansas, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia. Additional information is available at www.enservco.com.
Cautionary Note Regarding Forward-Looking Statements
This news release contains information that is "forward-looking" in that it describes events and conditions ENSERVCO reasonably expects to occur in the future. Expectations for the future performance of ENSERVCO are dependent upon a number of factors, and there can be no assurance that ENSERVCO will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond ENSERVCO's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in a Form 10-K filed on March 20, 2014. It is important that each person reviewing this release understand the significant risks attendant to the operations of ENSERVCO. ENSERVCO disclaims any obligation to update any forward-looking statement made herein.
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device acce...
Sep. 5, 2015 10:30 AM EDT Reads: 346
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading in...
Sep. 5, 2015 10:15 AM EDT Reads: 2,061
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small,...
Sep. 5, 2015 10:00 AM EDT Reads: 239
In 2014, the market witnessed a massive migration to the cloud as enterprises finally overcame their fears of the cloud’s viability, security, etc. Over the past 18 months, AWS, Google and Microsoft have waged an ongoing battle through a wave of price cuts and new features. For IT executives, sorting through all the noise to make the best cloud investment decisions has become daunting. Enterprises can and are moving away from a "one size fits all" cloud approach. The new competitive field has ...
Sep. 5, 2015 09:45 AM EDT Reads: 262
Mobile testing is getting harder: more devices, multiple operating systems, higher quality expectations and shorter development cycles. In his session at DevOps Summit, Tom Chavez, Senior Evangelist at SOASTA, will discuss the seven steps to improving your mobile testing process. Tom Chavez, with 20+ years of experience as a product manager in software development tools, works in product management at SOASTA, the leader in performance analytics. He has worked across the Silicon Valley at indu...
Sep. 5, 2015 09:15 AM EDT Reads: 246
Contrary to mainstream media attention, the multiple possibilities of how consumer IoT will transform our everyday lives aren’t the only angle of this headline-gaining trend. There’s a huge opportunity for “industrial IoT” and “Smart Cities” to impact the world in the same capacity – especially during critical situations. For example, a community water dam that needs to release water can leverage embedded critical communications logic to alert the appropriate individuals, on the right device, as...
Sep. 5, 2015 09:15 AM EDT Reads: 199
Even though you are running an agile development process, that doesn’t necessarily mean that your performance testing is being conducted in a truly agile way. Saving performance testing for a “final sprint” before release still treats it like a waterfall development step, with all the cost and risk that comes with that. In this post, we will show you how to make load testing happen early and often by putting SLAs on the agile task board.
Sep. 5, 2015 09:00 AM EDT Reads: 134
Manufacturing connected IoT versions of traditional products requires more than multiple deep technology skills. It also requires a shift in mindset, to realize that connected, sensor-enabled “things” act more like services than what we usually think of as products. In his session at @ThingsExpo, David Friedman, CEO and co-founder of Ayla Networks, will discuss how when sensors start generating detailed real-world data about products and how they’re being used, smart manufacturers can use the ...
Sep. 5, 2015 09:00 AM EDT Reads: 136
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the ...
Sep. 5, 2015 09:00 AM EDT Reads: 1,687
The Internet of Things is in the early stages of mainstream deployment but it promises to unlock value and rapidly transform how organizations manage, operationalize, and monetize their assets. IoT is a complex structure of hardware, sensors, applications, analytics and devices that need to be able to communicate geographically and across all functions. Once the data is collected from numerous endpoints, the challenge then becomes converting it into actionable insight.
Sep. 5, 2015 09:00 AM EDT Reads: 167
Moving an existing on-premise infrastructure into the cloud can be a complex and daunting proposition. It is critical to understand the benefits as well as the challenges associated with either a full or hybrid approach. In his session at 17th Cloud Expo, Richard Weiss, Principal Consultant at Pythian, will present a roadmap that can be leveraged by any organization to plan, analyze, evaluate and execute on a cloud migration solution. He will review the five major cloud transformation phases a...
Sep. 5, 2015 08:45 AM EDT Reads: 157
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
Sep. 5, 2015 08:45 AM EDT Reads: 246
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Sep. 5, 2015 08:30 AM EDT Reads: 303
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development...
Sep. 5, 2015 08:30 AM EDT Reads: 1,675
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Trel...
Sep. 5, 2015 08:00 AM EDT Reads: 329