Norex Exploration Services Inc.

Norex Exploration Services Inc.
Tesla Exploration Ltd.

April 09, 2010 12:55 ET

Norex and Tesla Provide Update on International Operations

CALGARY, ALBERTA--(Marketwire - April 9, 2010) - This press release is a joint release of Norex Exploration Services Inc. ("Norex") (TSX:NRX) and Tesla Exploration Ltd. ("Tesla") pursuant to the transaction detailed in the Information Circular of Norex dated March 24, 2010.

Tesla, through its wholly-owned subsidiary Tesla-IMC International Limited, experienced an incident in connection with its international operations on April 5, 2010 on one of its two recording crews working in Ethiopia. The security in place was breached and an armed attack occurred which resulted in a fatality of one of Tesla's employees. Two other individuals, a contract employee and a security officer, were injured in the ambush and are receiving medical care. At this time, it is not known who attacked the Tesla crew. Medical support and notification of next of kin are Tesla's first priority, along with securing the safety of all personnel.

Security is the responsibility of Tesla's client (the "Client") and given the serious nature of the breach, and in accordance with the terms of Tesla's contract with the Client (the "Contract"), Tesla has placed both of its crews in Ethiopia on "standby" pending a resolution of the security issue. Tesla is in the process of moving all relevant personnel to its Ethiopian headquarters in Addis Ababa pending a full review of the security situation. The Client has been advised of this decision, is in full agreement with this course of action and has acknowledged that Tesla's actions are within the terms of the Contract.

The incident is being investigated by Tesla, the Client and the local authorities in Ethiopia. Tesla believes this investigation will take some time to complete and it is difficult to determine the final course of action that may result. Either party to the Contract has the ability to cancel further work after providing a notice period. The current status under the Contract is that Tesla is on "standby" and will receive standby fees in accordance with the Contract. Standby fees typically cover the daily costs of the crew.

The crew that was attacked was near completion of its portion of the Contract and was scheduled to be demobilized in a matter of days. Tesla expects to redeploy this crew to other projects in Tesla's international operations in the near future.

The final determination of any course of action under the remaining portion of the Contract is unknown at this time and such determination will only be made once Tesla's investigation concludes and more information becomes available. The remaining portion of the Contract is significant to Tesla's current international operations, however, it is premature to make an assessment as to whether the current incident will have a material impact on the consolidated financial results of the combined companies.

Cautionary Statement Regarding Forward-looking Statements and Information

This press release contains forward-looking statements. These statements relate to future events or future performance of Norex and Tesla. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "predict", "seek", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect Norex's and Tesla's current views with respect to certain events, and are subject to certain risks, uncertainties and assumptions. Although Norex and Tesla believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Many factors could cause Norex's, Tesla's or the pro forma company's actual results, performance, or achievements to materially differ from those described in this press release. Norex and Tesla provide seismic data acquisition services and are exposed to a number of risks and uncertainties that are common to companies in the same business. These risks and uncertainties include demand for Norex's and Tesla's services which is affected by, among other things, the speculative nature of resource exploration and development activities, changes in commodity prices, general economic, market and business conditions; changes in customer exploitation budgets; foreign exchange risk, risks inherent in international operations, competition for capital and skilled personnel and shortages thereof; the competitive nature of the seismic industry; the ability to keep pace with constantly changing technology; uncertainty in various factors in the oil and gas industry, including the ability to comply with current and future health, safety, environmental and other laws; the general risk inherent to seismic data acquisition activities; risks relating to expansion including pressure on operational and technical resources; risks relating to the reliance on key officers, employees and consultants, including an unexpected loss or departure of any one of them; cancellation of work previously awarded to Tesla or Norex; the possibility of a conflict of interest arising for the directors and officers of Tesla or Norex who are participants in other sectors of the oil and gas industry; risks relating to having shareholders who are able to exert influence over the affairs of Tesla and Norex; the possibility of the need for future financing, which may not be available on favourable terms; the risk of not renewing current credit facilities; the volatility of, and lack of liquidity in, the trading market for the shares of Norex; actions by governmental or regulatory authorities including increasing taxes and changes in other regulations; and the occurrence of unexpected events involved in resource exploration including, but not limited to, adverse weather conditions and wind and the proximity of armed conflict to international operations. Adverse weather or field operating conditions can also negatively impact field productivity and, as a result, Norex's or Tesla's overall profitability. Certain jobs awarded to Norex and Tesla, as applicable, are on a "turnkey" pricing basis where Norex or Tesla, as applicable, bears the risk of lost productivity, increased input and/or subcontractor costs. As a result, factors reducing field productivity and any increases in Norex's or Tesla's input costs could have a material affect on their respective profitability. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. Norex and Tesla do not intend, and do not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, expect as required by law.

Contact Information

  • Norex Exploration Services Inc.
    Paul Crilly
    President & CEO
    (403) 216-5924
    Tesla Exploration Ltd.
    Richard Habiak
    President & CEO
    (403) 216-0990