Welcome!

News Feed Item

ENSERVCO Provides Capital Expenditure and Operational Update

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.

About ENSERVCO
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.

Contact:
Geoff High
Pfeiffer High Investor Relations, Inc.
Phone 303-393-7044
Email: Email Contact
Web: www.pfeifferhigh.com

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
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
SYS-CON Events announced today that Cloud Academy will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud computing technologies. Ge...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, will posit that disruption is inevitable for c...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...