Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

January 23, 2012 19:10 ET

Trican Announces 2012 Russian Contract Update

CALGARY, ALBERTA--(Marketwire - Jan. 23, 2012) - Trican Well Service Ltd. (TSX:TCW) ("Trican") is pleased to announce the results of the 2012 Russian contract tendering season. Management is currently estimating 2012 revenue to increase approximately 10%, as measured in roubles, relative to 2011.

The estimated revenue increase is based on an 8% expected increase in activity combined with a 2% expected increase in average revenue per job. The expected increase in average revenue per job is the combined result of increased pricing partially offset by the impact of smaller fracturing job sizes and a shift in the sales mix toward the cementing, coiled tubing and nitrogen service lines. These service lines typically experience a lower average revenue per job relative to the fracturing service line.

Bidding for the Russian contracts was very aggressive with a number of competitors attempting to gain market share. Customer interest in horizontal completions and multi-stage fracturing is increasing with several trial projects expected to be completed in 2012.

A high rate of inflation in the Russian market continues to challenge the Russian operations profitability. That being said, management is anticipating a modest increase in the operating income margin in 2012 as a result of a shift in our work scope to higher margin work and a continued focus on optimizing the Russian operations' cost structure. In summary, management is pleased with the results of the 2012 tenders. Activity and pricing in the Russian market continue to strengthen and there is a strong customer interest in the development of oil and gas reservoirs utilizing state of the art technology.

Forward-looking Statements

This news release contains forward-looking statements, including statements regarding Trican Russia's 2012 revenue, activity, average revenue per job, pricing, Russian inflation and their impact on operating income margins. These statements speak only as of the date of this document and we do not undertake to publicly update these forward-looking statements except in accordance with applicable securities laws. The Company's actual decisions, activities, results, performance or achievement could differ materially from those expressed, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur.

Forward-looking statements are based on current expectations, estimates, projections and assumptions, which we believe are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. Assumptions have been made regarding, among other things: industry activity; the general stability of the economic and political environment; effect of market conditions on demand for the Company's products and services; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate its business in a safe, efficient and effective manner; the performance and characteristics of various business segments; the effect of current plans; the timing and costs of capital expenditures; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its products and services.

Forward-looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks and uncertainties include: our ability to successfully perform under the contract, changes in strategic and financial objectives, fluctuating prices for crude oil and natural gas; changes in drilling activity; general global economic, political and business conditions; inflation levels in Russia; weather conditions; regulatory changes; the successful exploitation and integration of technology; customer acceptance of technology; success in obtaining issued patents; the potential development of competing technologies by market competitors; and availability of products, qualified personnel, manufacturing capacity and raw materials.

Additional information regarding Trican including Trican's most recent annual information form is available under Trican's profile on SEDAR (www.sedar.com).

Headquartered in Calgary, Alberta, Trican has operations in Canada, the United States, Russia, Kazakhstan, Australia and North Africa. Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.

Contact Information

  • Trican Well Service Ltd.
    Dale Dusterhoft
    Chief Executive Officer
    (403) 266-0202
    (403) 237-7716 (FAX)
    ddusterhoft@trican.ca

    Trican Well Service Ltd.
    Michael Baldwin
    Vice President, Finance and Chief Financial Officer
    (403) 266-0202
    (403) 237-7716 (FAX)
    mbaldwin@trican.ca

    Trican Well Service Ltd.
    2900, 645 - 7th Avenue S.W.
    Calgary, Alberta T2P 4G8
    www.trican.ca