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Open
Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR - News) is pleased to announce
that its wholly-owned business unit, Poseidon Concepts, has expanded its
overall tank fleet to 65 systems from 45 at the end of January, has
introduced an enlarged model of its modular, insulated fracturing fluid
handling system and has received minimum commitments from four major oil and
natural gas producers in western Canada and the United States.
The
producing sector continues to respond to the performance and cost advantages
of the innovative Poseidon system, which is supplied on a rental basis. The
Poseidon fleet has been expanded from 25 systems entering 2011 to 65 as of
February 28. This figure includes several of the enlarged
"Atlantis" model tanks, which hold up to 41,000 barrels (6,500
m(3)) of fluids, more than double the capacity of the original
"Poseidon" model, which holds 18,000 barrels (2,900 m(3)).
Fleet
expansion is ongoing to meet increasing demand, which now includes minimum
commitments over the next 12 months from four major U.S. and Canadian oil and
natural gas companies. The commitments are commencing in the first quarter of
2011 and are expected to generate combined minimum revenue of approximately
$18 million over the next 12 months. Poseidon believes these long-term
commitments are indicative of overall industry demand and substantiate its
plans for further aggressive fleet expansion.
The
commitments are additional evidence of the strong operating environment for
well completions services and related equipment in Canada and the U.S.,
particularly for unconventional oil and liquids-rich natural gas reservoirs
being developed with horizontal wells and multiple hydraulic fractures. By
reducing transportation, operating and heating costs and saving time at the
well site, the Poseidon systems are contributing to the industry's drive for
greater capital efficiencies in bringing new reserves on-production.
Poseidon
continues to expand its footprint in the United States, with approximately 25
percent of the growing fleet expected to be operating in the U.S. by
mid-March. Poseidon is beginning to expand beyond its current presence in the
Bakken oil shale play of North Dakota, in order to
begin servicing some of the larger fracturing operations underway at multiple
unconventional oil and natural gas basins throughout the U.S.
Poseidon's
cash flow from operations and EBITDA guidance for the six months ended June
30, 2011 has been increased to $9.5 million thanks to increasing demand,
further fleet expansion and the recent long-term commitments received.
Reader
Advisory
This
news release contains certain forward-looking statements, which include assumptions
with respect to (i) demand for Poseidon Concepts'
tank systems and the corresponding utilization rate and operating margins;
(ii) future capital expenditures and how they will be financed; (iii) cash
flow from operations and EBITDA; and (iv) general oil and gas industry
activity. The reader is cautioned that assumptions used in the preparation of
such information may prove to be incorrect. All such forward-looking
statements involve substantial known and unknown risks and uncertainties,
certain of which are beyond Open Range's control. Such risks and
uncertainties include, without limitation, risks associated with the
manufacture and supply of fracturing fluid handling systems, marketing and
transportation, loss of markets, volatility of commodity prices, currency and
interest rate fluctuations, environmental risks, competition from other fluid
handling system suppliers, inability to obtain required regulatory approvals
and ability to access sufficient capital from internal and external sources,
the impact of general economic conditions in Canada and the United States,
industry conditions, changes in laws and regulations (including the adoption
of new environmental laws and regulations) and changes in how they are
interpreted and enforced, increased competition, the lack of availability of
qualified personnel or management, as well as stock market volatility and
market valuations of companies with respect to announced transactions and the
final valuations thereof. Open Range's actual results, performance or
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do, what benefits, including the amount
of proceeds, Open Range will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive.
All subsequent forward-looking statements, whether written or oral, attributable
to Open Range or persons acting on its behalf are expressly qualified in
their entirety by these cautionary statements. Additional information on the
foregoing risks and other factors that could affect Open Range's operations
and financial results are included in the Company's annual information form
and other reports on file with Canadian securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com). Furthermore, the
forward-looking statements contained in this news release are made as at the
date of this news release and Open Range does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable securities laws.
THE
TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE
INFORMATION CONTAINED HEREIN.
Contact:
A. Scott Dawson, P.Eng.
Open Range Energy Corp.
President and Chief Executive Officer
403-205-3704
Lyle D. Michaluk, CA
Open Range Energy Corp.
Vice President, Finance and Chief Financial Officer
403-262-9280
www.openrangeenergy.com
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