Pure Energy Services Ltd.
TSX : PSV

Pure Energy Services Ltd.

January 22, 2008 09:05 ET

Pure Energy Services Ltd. Announces 2008 Capital Program and U.S. Operations Update

CALGARY, ALBERTA--(Marketwire - Jan. 22, 2008) - Pure Energy Services Ltd. (TSX:PSV):

2008 Capital Expenditures Budget

Pure Energy Services Ltd. ("Pure Energy") announced today that it has approved new capital expenditures of $7.2 million for 2008. Due to uncertainties in industry conditions and activity levels, the 2008 capital expenditures budget primarily reflects infrastructure capital for Pure Energy's existing business operations.

US Operations Update

Pure Energy is also providing an update for the operations of its wholly-owned subsidiary, Pure Energy Services (USA), Inc. ("Pure USA").

As previously disclosed, Management has received confirmation of the closing of the third party purchase of all of the equity interests of Legacy Resources Company LLC ("Legacy"), Pure USA's principal fracturing sand supplier. Pure USA has received the repayment of $4.9 million in satisfaction of the loan owing by Legacy to Pure USA and as reimbursement of certain expenses incurred by Pure USA. Management has been advised that the reconstruction of Legacy's sand processing facility is underway, with completion expected during the second quarter of 2008. Management continues to be confident that Pure USA will have sufficient volumes of fracturing sand to meet its contractual obligations for the provision of fracturing services in 2008.

To date, the Fracturing division has been awarded two contracts by a major independent oil and gas producer for the provision of fracturing services in the Piceance Basin of Colorado, as previously disclosed. In addition, Pure USA has received commitments from two independent oil and gas producers for the performance of fracturing services during the 2008 contract year. Management expects continued increases in the utilization of Pure USA's fracturing equipment as a result of these contracts and commitments, the increased customer acceptance for fracturing services in the Rocky Mountain region and the expected recommencement of deliveries of fracturing sand from Legacy in the second quarter of 2008.

The US Production Testing division has continued to achieve high utilization of its units in the Rocky Mountain region during recent months. A services agreement with a major independent oil and gas producer was recently renewed for the 2008 contract year. The US Production Testing division continues to expand its customer base and has entered into services agreements with, or has received commitments from, three additional oil and gas producers.

The services agreement previously entered into by Pure USA's Logging and Perforating division with a major independent oil and gas producer was recently renewed. In addition, Pure USA has received a commitment from an independent oil and gas producer for the performance of logging and perforating, testing and fracturing services for the 2008 contract year. As a result of these contracts and commitments and the employment of personnel with a high degree of technical logging and perforating experience in the Rocky Mountain region, this division has continued to increase its equipment utilization. Management anticipates that the expected increase in utilization of the fracturing spreads will have a further positive impact on the utilization of the logging and perforating units through the provision of complementary logging and perforating services. Additional equipment, including a wireline truck, a crane truck, support vehicles and logging tools, have been transferred from Canadian operations to meet customer demand in the Rocky Mountain region.

Kevin Delaney, Pure Energy's President, stated: "The receipt of recent contracts, renewals and commitments by Pure Energy for its US operations substantiates the three years of effort in developing the Rocky Mountain region markets and confirms on-going customer acceptance of all three of Pure Energy's service lines in these markets."

Management will continue to investigate opportunities to transfer additional equipment from Pure Energy's Canadian operations to its US operations if activity levels and customer commitments warrant the transfer.

Pure Energy is an oilfield services company that provides completion and drilling related services to oil and gas exploration and development entities in the Western Canadian Sedimentary Basin and, through Pure USA, in the US Rocky Mountain region.

Certain statements in this press release may constitute "forward-looking information" which involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pure Energy or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this press release, such information uses such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate" and other similar terminology. This information reflects Pure Energy's current expectations regarding future events and operating performance and speaks only as of the date of this press release. Forward-looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information. Although the forward-looking information contained in this press release is based upon what management of Pure Energy believes are reasonable assumptions, Pure Energy cannot assure investors that actual results will be consistent with this forward-looking information. This forward-looking information is provided as of the date of this press release, and, subject to applicable securities laws, Pure Energy assumes no obligation to update or revise such information to reflect new events or circumstances.

Contact Information

  • Pure Energy Services Ltd.
    Kevin Delaney
    President and CEO
    (403) 262-4000
    Email: kdelaney@pure-energy.ca
    or
    Pure Energy Services Ltd.
    Michael Baldwin
    Chief Financial Officer
    (403) 262-4000
    Email: mbaldwin@pure-energy.ca
    or
    Pure Energy Services Ltd.
    #300, 1010 - 1st Street S.W.
    Calgary, Alberta T2R 1K4
    (403) 262-4000
    (403) 262-4005 (FAX)