Bonnett's Energy Services Trust

Bonnett's Energy Services Trust

November 15, 2005 16:13 ET

Bonnett's Energy Services Trust Announces $32 Million Dollar Capital Expenditure Program and Concurrent $20 Million Dollar Trust Unit Offering

GRANDE PRAIRIE, ALBERTA--(CCNMatthews - Nov. 15, 2005) -


Bonnett's Energy Services Trust ("Bonnett's" or the "Trust")(TSX:BT.UN) is pleased to announce the following:

A $32 Million Growth Capital Expenditure Program:

In response to the demands of the Trust's customers and its forth quarter utilization rate being near capacity, Bonnett's has initiated the construction and procurement of the following equipment:

Wireline Services:

- 5 new wireline trucks (4 slickline, 1 E-line and all related equipment) to be delivered at various delivery dates between December 1, 2005 and March 31, 2006. With the addition of these trucks Bonnett's will operate a total of 45 wireline trucks.

- 1 new swab rig and related equipment. This truck is expected to be delivered prior to March 31, 2006.

- 4 picker trucks that are used in conjunction with the expanded wireline fleet. These picker trucks are scheduled for delivery between November 15, 2005 and March 31, 2006.

Production Testing:

- 3 production testing systems complete with all the related piping and manifolds to be delivered prior to January 15, 2006. With the addition of these 3 additional testing packages Bonnett's will operate a total of 25 production testing systems.

Stimulation Services:

- Having recently completed the acquisition of N2 Thousand Limited and Platinum Stimulation Services Ltd., the Trust is adding one additional acid pumping unit and one additional nitrogen pumping unit. These units are expected to be fully operational on or before January 15, 2006.

- The Trust has also ordered two complete fracturing packages in conjunction with the key personnel additions previously announced on October 28, 2005. The first of these packages is expected to be delivered in September 2006 and the second is expected to be delivered in December of 2006.

With the exception of the fracturing equipment, due to the construction lead time, Bonnett's has all the required staff in place to immediately deploy the equipment as it is received. This equipment is expected to operate at capacity and generate margins and returns consistent with those historically generated by the Trust.

Murray Toews, the Bonnett's President and Chief Executive Officer, stated, "As is the case with the other business lines of the Trust, we believe personnel are the key to success in the stimulation services division. Dave Woodward, along with the other key people that have joined our team, has brought vast knowledge and experience in fracturing and other stimulation services. This will give the Trust the ability to execute on our plan to build a solid foundation in the fracturing sector." Mr. Toews also stated, "The growth in the wireline and testing divisions has been very strong and the stimulation services division will add further value to the unitholders by complimenting the services currently provided by the Trust."

Fracturing operations are expected to commence in September 2006 and generate returns and margins consistent with those being experienced by other industry participants operating fracturing equipment in north western Alberta and north eastern British Columbia.

More specifically the construction program is expected to:

- be accretive to operating cash flow per unit and cash available for distribution as the equipment is deployed into the field;

- allow Bonnett's to better meet customer demands while providing a broader package of complimentary and related services; and

- increase Bonnett's exposure to workover services that are provided throughout the lifecycle of producing oil and gas wells.

Bought Deal Financing

In conjunction with this capital equipment expansion, Bonnett's is pleased to announce that it has entered into an agreement with a syndicate of underwriters, led by Raymond James Ltd., to sell on a bought deal basis, by way of private placement, 1,438,849 Trust Units at a price of $13.90 per Trust Unit for gross proceeds of approximately $20 million. In addition, the underwriters have been granted an option to purchase an additional 575,540 Trust Units under the same terms prior to closing. The net proceeds of the offering will be used to fund the construction program as outlined above and for general working capital purposes. The first distribution in which purchasers of Trust Units under this offering will be entitled to participate will be paid on January 15, 2006 to unitholders of record on December 31, 2005.

Closing of the Trust Unit financing is expected to occur on or about December 1, 2005.

Bonnett's Energy Services Trust is a leader in providing wireline and testing services to oil and natural gas exploration and production companies operating in the Western Canadian Sedimentary Basin ("WCSB"). Operating from ten full service locations located throughout the WCSB, with a sales office located in Calgary, Alberta. Bonnett's currently operates 34 wireline trucks, 6 heliportable wireline units and 22 testing packages. In addition, through its purchase of N2 Thousand and Platinum Stimulation, Bonnett's is currently operating 2 nitrogen pumping units and 1 acid pumping unit.

The Trust Units offered will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person, absent registration, or an applicable exemption therefrom. This news release shall not constitute and offer to sell or the solicitation of an offer to buy the Trust Units in any jurisdiction. This news release may contain forward-looking statements concerning the anticipated performance of the Trust. Forward-looking statements are based on the estimates and opinions of management at the date the statements are made, and the Trust undertakes no obligation to update forward-looking statements if conditions or opinions should change.

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