CALGARY, ALBERTA--(Marketwired - Jan. 9, 2017) - Total Energy Services Inc. ("Total" or the "Company") (TSX:TOT) announces its preliminary 2017 capital expenditure budget of $22.8 million. Included in this budget is $15.6 million of expansion capital and $7.2 million of equipment maintenance and upgrade capital.
$9.0 million of the expansion capital is being directed to the Company's Rentals and Transportation Services ("RTS") segment to significantly expand its access mat business in Canada. Upon completion of this investment, the RTS segment will have a fleet of approximately 17,000 access mats, which is in addition to the RTS segment's approximate 10,000 pieces of surface rental equipment. This investment is being made to support existing demand from conventional upstream oil and gas customers as well as in response to the Company's success in expanding its presence in other industries such as mining and utilities.
Also included in the 2017 expansion capital budget is $6.6 million (which includes $0.5 million of capital leases) for continued growth in Total's Compression and Process Services ("CPS") segment. As part of its international growth strategy, the CPS segment is expanding its gas compression fabrication capacity into the northeast United States. In that regard, Bidell Gas Compression has identified several potential locations and expects to enter into a lease agreement for a minimum of 100,000 square feet of fabrication space shortly. This location will be a standalone operation with full design, engineering and fabrication capacities as well as aftermarket support with fabrication operations expected to commence during the second quarter of 2017. The addition of this facility will bring the total fabrication space occupied by the CPS segment to approximately 290,000 square feet and increases this segment's fabrication capacity by approximately 50%.
Sean Ulmer, President of Bidell, stated: "The Marcellus and expanding Utica shale gas plays continue to be recognized as world class with significant long-term growth potential. Bidell recognizes that the needs of its customers will vary based on country and geography and that a focused and disciplined approach is critical to meeting these needs. Based on customer feedback to have another quality packager in the local area, we are excited to be opening up this facility. Given the size of the equipment we construct, logistics is always a significant consideration for us to compete in any market and establishing a fabrication presence within the northeast United States will be a definite advantage to better serve our customers. We are excited by the new markets that will be opened up to Bidell through this expansion."
The $7.2 million budget for maintenance and equipment upgrades includes $2.0 million of capital leases related to the replacement and addition of light duty vehicles in all business segments. The remaining $5.2 million will be directed towards equipment upgrades and maintenance primarily within Total's Contract Drilling Services and RTS segments.
Total intends to finance the capital expenditures detailed above (excluding the $2.5 million of capital leases) with cash on hand and cash flow from operations. The Company's $65 million credit facility is currently undrawn and available if required.
Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.