Pure Energy Services Ltd.

Pure Energy Services Ltd.

December 08, 2010 18:19 ET

Pure Energy Services Ltd. Announces Marcellus Contract and Technology and Banking Update

CALGARY, ALBERTA--(Marketwire - Dec. 8, 2010) - Pure Energy Services Ltd. (TSX:PSV) ("Pure" or the "Company") announced today that it has entered into an agreement with a major independent oil and gas producer working in the Marcellus shale play in Pennsylvania for the provision of fracturing flowback well services. The agreement provides the producer with the exclusive use of four high pressure well testing packages including pipe and auxiliary equipment for a period of two years commencing January 1, 2011 at a fixed monthly fee. The agreement is terminable by the producer on the provision of three months' notice. This agreement reflects the continued focus by Pure to meet customer needs in emerging resource plays in both Canada and the United States. The Company currently operates nine well testing packages in the Marcellus shale play.

Pure also announced that it has recently reached agreement with Fotech Solutions Ltd. ("Fotech") to obtain the exclusive right to use and market Fotech's PureLight digital acoustic sensing technology in the United States for a two year period commencing January 1, 2011, subject to meeting certain purchase thresholds with Fotech. The exclusivity rights for the United States are in addition to the five-year exclusivity rights for Canada previously granted to Pure.

To date, Pure has successfully utilized the fiber optic technologies in a number of vertical and horizontal well applications. In November, Pure successfully completed its first fracture monitoring operations using the fiber optic technologies to provide the customer real time data of the fracturing operations of a horizontal well. It is anticipated that the information obtained using the fiber optic technologies will assist producers in optimizing their fracturing techniques, completion programs and related costs. Management believes that the fiber optic technologies will increase the Company's exposure to the Deep Basin plays and horizontal oil (both conventional and heavy oil) plays. Opportunities also exist to use the fiber optic technologies on producing wells, including wells with permanent fiber optic installations, which could assist producers in optimizing production.

Lastly, Pure announced that, at its request, the Company's extendible revolving committed loan facility limit has recently been reduced from $35 million to $25 million. After this reduction, Pure had aggregate available loan facilities in Canada and the United States of approximately Cdn. $54 million. Pure had approximately Cdn. $23 million drawn on its loan facilities and working capital net of long-term debt of Cdn. $5.2 million at September 30, 2010, after giving effect to the debt pay-down from proceeds of the sale of the Company's drilling division that closed effective October 1, 2010.

Forward-looking Statements

This document contains certain forward-looking statements and other information that are based on the Company's current expectations, estimates, projections and assumptions made by management in light of its experience and perception of historical trends, current conditions, anticipated future developments and other factors believed by management to be relevant.

All statements and other information contained in this document that address expectations or projections about the future are future-looking statements. Some of the forward-looking statements may be identified by words such as "may", "would", "could", "will", "intends", "expects", "believes", "plans", "anticipates", "estimates", "continues", "maintains", "projects", "indicates", "outlook", "proposed", "objective", "opportunities" and other similar expressions. These statements speak only as of the date of this document. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications 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 statements, including, but not limited to, the factors discussed below and under "Risks and uncertainties" discussed in the Company's MD&A of the audited December 31, 2009 financial statements and the most recent Annual Information Form, Information Circular, quarterly reports, material change reports and news releases. The Company cannot assure investors that actual results will be consistent with the forward-looking statements and readers are cautioned not to place undue reliance on them. The forward-looking statements are provided as of the date of this document and, except as required pursuant to applicable securities laws and regulations, the Company assumes no obligation to update or revise such statements to reflect new events or circumstances.

The forward-looking statements and information contained in this document reflect several major factors, expectations and assumptions of the Company, including without limitation, that the Company will continue to conduct its operations in a manner substantially consistent with past operations; the general continuance of current or, if applicable, assumed industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) taxation, royalty and regulatory regimes; certain commodity prices and other cost assumptions; certain conditions regarding natural gas storage in North America; and the continued availability of adequate debt and/or equity financing and cash flow from the Company's operations to fund its capital and operating requirements as needed and the extent of its liabilities. Many of these factors, expectations and assumptions are based on management's knowledge and experience in the industry and on public disclosure of industry participants and analysts relating to anticipated exploration and development programs of oil and gas producers, the effect of changes to regulatory, taxation and royalty regimes, expected active rig counts and industry equipment utilization in the WCSB, the US Rocky Mountain region and the Appalachian Basin (Pennsylvania) and other matters. The Company believes that the material factors, expectations and assumptions reflected in the forward- looking statements and information are reasonable; however, no assurances can be given that these factors, expectations and assumptions will prove to be correct.

In particular, this document contains forward-looking information pertaining to the following: increases in demand for, and pricing of, the Company's services; supply and demand for oilfield services and industry activity levels; the use of the fiber optic technologies for monitoring, completions and production related activities; oil and natural gas drilling activity; and expectations regarding market prices and costs.

The Company's actual results could differ materially from those anticipated in such forward-looking statements as a result of the risk factors set forth below and elsewhere in this document: general economic conditions in Canada and the USA; changes in the level of capital expenditures made by oil and natural gas producers and the resultant effect on demand for oilfield services during drilling and completion of oil and natural gas wells; volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally; risks inherent in the Company's ability to generate sufficient cash flow from operations to meet its current and future obligations; increases in debt service charges; the Company's ability to access external sources of debt and equity capital; changes in legislation and the regulatory environment, including uncertainties with respect to implementing binding targets for reductions of emissions; uncertainties in weather and temperature affecting the duration of the oilfield service periods and the activities that can be completed; competition; sourcing, pricing and availability of raw materials, consumables, component parts, equipment, suppliers, facilities, and skilled management, technical and field personnel; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; ability to integrate technological advances and match advances of competition; credit risk to which the Company is exposed in the conduct of its business; and changes to the royalty regimes applicable to entities operating in the WCSB, the Rocky Mountain region or the Appalachian Basin (Pennsylvania).

Requests for shareholder information should be directed to Kevin Delaney or Chris Martin.

Contact Information

  • Pure Energy Services Ltd.
    Kevin Delaney
    (403) 262-4000
    (403) 262-4005 (FAX)
    Pure Energy Services Ltd.
    Chris Martin
    Chief Financial Officer
    (403) 262-4000
    (403) 262-4005 (FAX)
    Pure Energy Services Ltd.
    10th Floor, 333 – 11th Avenue S.W.
    Calgary, AB
    T2R 1L9