Peak Energy Services Trust

Peak Energy Services Trust

December 23, 2008 17:59 ET

Peak Energy Services Trust Provides an Operational Update on Previously Announced Alberta Oil Sands Agreement

CALGARY, ALBERTA--(Marketwire - Dec. 23, 2008) - In July of 2008, Peak Energy Services Trust ("Peak" or the "Trust") (TSX:PES.UN) announced that it had entered into a two year agreement ("Agreement") with Sunshine Oilsands Ltd. ("Sunshine"). Under the terms of the Agreement, Peak was to supply camp, catering and wastewater services for approximately 600 men along with other peripheral support equipment to Sunshine throughout its various operating locations in the Alberta oil sands region of north-eastern Alberta. At the time, management expected the two year contract to generate approximately $18.0 million in revenue ($9.0 million per year) with the first term of the contract commencing on or about December 1, 2008 and ending approximately March 15, 2009.

As of December 22, 2008, Sunshine has not utilized Peak's services as contemplated under the Agreement and it is unlikely that they will for the current winter drilling season. Peak has and will be working with Sunshine in regards to meeting their current service requirements and amicably resolving obligations under the terms of the Agreement.

In the meantime, Peak has been working diligently on redeploying rental equipment and resources earmarked under the Agreement. As of today, the majority of the rental equipment is booked or has been deployed with other customers for the current winter drilling season and, as such, Peak expects to generate revenue relatively consistent with our previous revenue expectations under the Agreement.

About Peak Energy Services Trust

Peak Energy Services Trust is a diversified energy services organization operating in western Canada and the mid-west United States of America. Through its various operating divisions, Peak provides drilling and production services to its customers both in the conventional oil and gas industry as well as the oil sands regions of western Canada. The Trust also provides water technology solutions to a variety of customers throughout North America. Peak's units are listed on the Toronto Stock Exchange under the symbol "PES.UN".

Forward-looking statements

This news release contains forward-looking statements relating to the Agreement between Peak and Sunshine and other statements that are not historical facts, including statements regarding efforts to meet Sunshine's current service requirements and amicably resolving obligations under the terms of the Agreement and Peak's future revenue expectations. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The results or events predicated in these forward-looking statements may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking statements.

Certain material factors or assumptions that we used in developing these forward-looking statements include: the Agreement not being terminated by either party; and the third party rental rates and utilization periods being approximately equal to the terms of the Agreement. Material risk factors that could cause actual results to differ materially from the forward-looking information include: termination by either party of the Agreement; the failure by Sunshine to satisfy its obligations under the Agreement; fluctuations in the price and demand for oil and natural gas; currency fluctuations; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for oilfield services that the Trust provides; the effects of weather conditions on operations; the existence of competition from other oilfield service entities; general economic, market or business conditions; public market volatility and the related ability to access sufficient capital to fund activities; availability to access debt financing to fund activities; government policy changes; changes in laws or regulations, including taxation and environmental regulations; the lack of availability of qualified personnel or management; and other unforeseen conditions which could impact the use of services supplied by the Trust.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Peak disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Peak undertakes no obligation to comment on expectations of, or statements made by, third parties in respect of the Agreement.

The TSX have neither approved nor disapproved the information contained herein.

Contact Information

  • Peak Energy Services Trust
    Mr. Curt Whitteron
    President and Chief Executive Officer
    (403) 543-7325
    (403) 543-7335 (FAX)
    Peak Energy Services Trust
    Mr. Monty Balderston
    Chief Financial Officer
    (403) 543-7325
    (403) 543-7335 (FAX)