HOUSTON, TX--(Marketwired - Dec 28, 2016) - "EcoStim" or the "Company" (NASDAQ: ESES), is providing a brief update on the status of various contract opportunities as communicated in the Company's most recent conference call in mid-November. At that time, the Company had submitted bids and proposals for Argentina-related contracts valued at over $75 million for work in 2017 and beyond. Based on customer indications, we had expected the awards for much of this work to be finalized before the end of 2016. However, the final outcome of these bids has not been concluded within the time frame previously expected.
The Company has been informed that the award notification on two of the key contract opportunities has been delayed until mid to late January 2017. In the interim, the Company is continuing to work for this client under the previous rotational on-call contracts which have now been extended into January. With respect to the unconventional project the Company was pursuing for 2017, the Company has received indications informally that the work will likely be awarded to a competitor primarily because the Company lacks the necessary pumping horsepower readily available in the country to execute the work.
In addition to the Argentina opportunities discussed on our conference call, the Company has also been evaluating two contract opportunities in West Texas. One of these contract opportunities progressed to a fully negotiated and signed letter of intent ("LOI") for a one year take or pay contract with an estimated annual value of $71 million. Unfortunately, the private equity backed E&P company we worked with on this agreement announced on December 14, 2016 that their properties in West Texas were being sold. Subsequently, we were informed that the acquiring company did not wish to proceed to the contract stage and therefore discussions were terminated. The second opportunity that we identified is still under consideration and we have recently become aware of additional opportunities in the United States which we are further evaluating.
J. Chris Boswell, EcoStim's President and Chief Executive Officer commented, "It is frustrating to experience delays in the award of these contracts but we understand that our clients have many priorities and we can only wait until they have concluded their respective reviews of the tenders submitted. We continue to believe that our offers are very competitive and remain confident that we will be awarded some of the proposed work for next year. With respect to West Texas, we were very pleased to have reached operational and financial terms with a high-quality company to potentially expand our operations into a rapidly growing West Texas market. However, as has happened many times in West Texas, our customer decided to sell their assets to a larger company who unfortunately had long established relationships with other service providers. This experience was a good exercise for the Company and we are now actively looking at other similar opportunities in West Texas and other resurging markets for possible expansion into the United States. I would like to thank everyone for their patience and we look forward to an improved 2017."
About the Company
Eco-Stim Energy Solutions is an environmentally focused oilfield service and technology Company providing proprietary field management technologies and well stimulation and completion services to oil and gas producers drilling internationally. EcoStim's proprietary methodology and technology offers the potential to decrease the number of stages stimulated in shale plays through a unique process that predicts high probability production zones while confirming those production zones using the latest generation down-hole diagnostic tools. In addition, EcoStim offers its clients completion techniques that can dramatically reduce horsepower requirements, emissions, surface footprint and water usage. EcoStim seeks to deliver well completion services with better technology, better ecology and significantly improved economics for oil and gas producers worldwide.
Certain statements and information in this press release concerning results for the fiscal period ended September 30, 2016 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections.
For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.