CALGARY, ALBERTA--(Marketwire
- Feb. 28, 2011) - Open Range Energy Corp. ("Open Range" or
the "Company") (TSX:ONR) 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.
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