Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

December 18, 2006 05:00 ET

Trican Well Service Ltd.: 2007 Capital Budget and Operations Update

CALGARY, ALBERTA--(CCNMatthews - Dec. 18, 2006) - Trican Well Service Ltd. (TSX:TCW) is pleased to provide an update on its Canadian and Russian Operations and its 2007 capital budget.

Canadian Operations

The Company is pleased to announce that it has recently entered into an arrangement with a key customer that is expected to utilize 75% of its coalbed methane (CBM) fracturing capacity during the first quarter of 2007 and 50% of capacity for the remainder of the year. The Company believes this arrangement could produce approximately $25 million in sales in 2007 and significantly increase the utilization of the CBM equipment during the year. This service line has been under utilized for most of 2006 as lower natural gas prices, new regulatory requirements and concern over the level of service costs have caused producers to re-examine their planned expenditures. This arrangement recognizes these concerns and provides an important framework for increasing equipment utilization and reiterating Trican as a market leader in this service.

Due to the ongoing uncertainty regarding near term natural gas prices, the Company has elected to defer finalization of its 2007 capital budget until later in the first quarter of 2007. We anticipate providing an update in March, 2007.

Russian Operations

The Board of Directors has recently approved a record $US 77 million capital budget for Russian operations for 2007 as a result of recent contract awards, customer requests to broaden service offerings as well as continued strong demand for the Company's current services. $US 60 million will be spent on adding three new fracturing crews and three cement units to support our growing Russian operations. One fracturing crew will be immediately airlifted from North America and will be in the field early in January 2007 for what is anticipated to be a busy first quarter. The second crew under the 2007 program is expected to be in service mid year with the third anticipated to be operational late in 2007. One new cement unit will also be airlifted and will commence operations in January 2007 to support a three year contract recently awarded. The second and third pumpers are expected to commence operations early in the second quarter of 2007.

Under the 2007 capital program, the Company will also be upgrading existing fracturing pumping capacity and investing in infrastructure and auxiliary equipment to support operations at existing and future field locations. Large job sizes, particularly in the Nefteugansk area, have created the requirement for additional pumping capacity and the growth in operations during the last year in this area has necessitated additional investment in auxiliary equipment to improve operating efficiencies.

To broaden its service offerings, the Company will also be investing $US 17 million for three deep coiled tubing units and three nitrogen units. Two sets of this equipment will be in the field during the second quarter 2007 with the third set expected to be operational late in 2007.

The Company is also pleased to announce that it has currently been awarded, or is in negotiations, for an estimated 90% of the anticipated work program for 2007. Trican's reputation for technical expertise and operational excellence continues to support our efforts to expand work programs with existing customers and develop relationships with new customers.



Russian Operations 2007 Capital Program

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Current Planned 2007 Expected
Fleet Size Additions(2) Fleet Size(1)
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WELL SERVICE
Fracturing Crews
- Conventional 8 3 11
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Cement Pumpers 3 3 6
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Coil Tubing Units 0 3 3
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N2 Units 0 3 3
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(1) includes units in operation and under construction at December 31,
2007
(2) Planned expenditures based upon approved budgets which are subject to
change.


Forward-Looking Statements

This document contains forward-looking statements concerning, among other things, the Company's prospects, expected revenues, expenses, profits, developments and strategies for its operations, all of which are subject to certain risks, uncertainties and assumptions. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "achievable," "believe," "expect," "estimate," and other similar terms and phrases. These statements are based on certain assumptions and analysis made by the Company in light of its experience and its perception of known trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to many external variables including fluctuating prices for crude oil and natural gas, changes in drilling activity, general global economic, political and business conditions, weather conditions, regulatory changes, and availability of products, qualified personnel, manufacturing capacity and raw materials. If any of these uncertainties materialize, or if assumptions are incorrect, actual results may vary materially from those expected.

Headquartered in Calgary, Alberta, Trican's principal operations are in Canada; however, the Company also has operations in Russia and Kazakhstan. The Canadian operations are conducted through bases in British Columbia, Alberta and Saskatchewan, and provide services to customers across the entire Western Canadian Sedimentary Basin (WCSB). Russian operations are conducted through bases in the Tyumen region of western Siberia in the towns of Raduzhny, Nyagan and Nefteugansk in Russia and in Kyzylorda, Kazakhstan. Trican provides a comprehensive array of specialized products, equipment and services that are used by exploration and production companies during the exploration and development of oil and gas reserves.

Contact Information

  • Trican Well Service Ltd.
    Murray Cobbe
    President and CEO
    (403) 266-0202
    (403) 237-7716 (FAX)
    Email: mcobbe@trican.ca
    or
    Trican Well Service Ltd.
    Michael Kelly
    Vice President, Finance & Administration and CFO
    (403) 266-0202
    (403) 237-7716 (FAX)
    Email: mkelly@trican.ca
    or
    Trican Well Service Ltd.
    2900, 645 - 7th Avenue S.W.
    Calgary, Alberta T2P 4G8
    (403) 266-0202
    (403) 237-7716 (FAX)
    Website: www.trican.ca