Central Alberta Well Services Corp.
TSX VENTURE : CWC

Central Alberta Well Services Corp.

January 18, 2006 16:07 ET

Central Alberta Well Services Provides Corporate Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 18, 2006) - Central Alberta Well Services Corp. (TSX VENTURE:CWC) (the "Company") is pleased to announce that it has taken delivery of its fifth service rig, with an additional service rig scheduled for delivery this week. The Company also anticipates the addition of the seventh service rig and its fourth coil tubing unit prior to month-end, bringing the total equipment fleet to 11 units. The Company currently anticipates the addition of 11 more service rigs, 3 coil tubing units and 2 nitrogen units before the end of June, 2006.

Reflecting the competitive demands for service rigs and associated equipment, the Company has implemented two billing rate increases during the last three months. As a result of the new rates, the addition of new equipment and an overall increase in industry activity, the Company has generated increased revenues in its coil tubing and service rig operations. Operating costs have remained within the ranges anticipated for current levels of activity. In the current peak period of industry operations, the Company is expecting maximum equipment utilization and further increases in revenue levels, including incremental revenues associated with support equipment.

Due to the elevated demands for raw materials, labour and key components for assembling its equipment, the Company has accepted revisions to its equipment costing provided for in the Master Supply Agreement with Crown Energy Technologies. Pursuant to these revisions, the costs for units delivered in 2005 and the equipment scheduled for delivery in 2006 have increased by approximately 30%. This new pricing structure reflects current competitive market conditions, as independently verified by management of the Company. The Company has also made certain changes to the design of its equipment to realize greater operating efficiencies, which has increased the average capital cost of these units by an additional 30%. The intent of these design changes is to improve profitability, enhance operator safety and allow for increased equipment utilization capability during normally slower periods such as spring break up.

Darryl Wilson, CEO of the Company, stated "We are very pleased with the performance of the new state of the art components. In addition to realizing improved operating efficiencies and safety, the new rigs are helping to attract experienced personnel and customer demand is beyond what we can currently deliver".

Central Alberta is based in Red Deer, Alberta and provides well servicing services to oil and natural gas exploration and development companies. It currently operates in the exploration and production areas of the Western Canadian oil and gas sedimentary basin. For more information about Central Alberta please access the company's website at www.cen-alta.ca.

READER ADVISORY

This press release includes forward-looking statements and assumptions respecting the Company's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which the company may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any intention or obligation to update or revise these forward-looking statements, as a result of new information future events or otherwise.

Common Shares Issued and Outstanding: 27,075,138

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved the contents of this release.

Contact Information

  • Central Alberta Well Services Corp.
    Darryl Wilson
    President and Chief Executive Officer
    (403) 341-3933 or Toll Free: 1-877-341-3933
    Email: darrylwilson@cen-alta.ca
    or
    Central Alberta Well Services Corp.
    Tom Lewis
    Chief Financial Officer
    (403) 341-3933 or Toll Free: 1-877-341-3933
    Email: tomlewis@cen-alta.ca
    Website: www.cen-alta.ca
    or
    Central Alberta Well Services Corp.
    7883 Gaetz Ave
    Red Deer, AB