Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

April 26, 2007 18:50 ET

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

CALGARY, ALBERTA--(CCNMatthews - April 26, 2007) - Trican Well Service Ltd. (TSX:TCW) is pleased to provide an update on our Canadian, Russian, U.S. and International operations and the finalization of our 2007 capital budget.

Canadian Operations

As indicated in our December 2006 press release, Trican had deferred finalization of our 2007 capital budget until the end of the first quarter due to uncertainty surrounding near term natural gas prices and near term demand for pressure pumping services. Demand for service during the first quarter met our expectations; however, operations were impacted by an earlier spring break-up. The Company's outlook for the balance of the year remains unchanged with weaker demand for services expected in the second and third quarters but improving demand in the fourth quarter. Therefore, Trican will take this opportunity to transfer equipment from Canadian operations to support our growing international operations.



The 2007 capital budget for Canadian operations will total $26.5 million and
will comprise the following:

- $ 16.0 million Replacement of transferred assets
- $ 8.3 million Maintenance capital expenditures
- $ 2.2 million Infrastructure and other


Much of the planned expenditures will be directed toward replacing the transferred equipment and maintaining the Canadian operating fleet.

Equipment Continuity

The following table sets out our current plans for equipment capacity for our Canadian operations for 2007.



Transfers &
Number of Units - Canada Current Dispositions Additions Ending(A)
----------------------------------------------------------------------------
Fracturing Crews
Conventional 18 (1) 1 18
CBM 4 0 0 4
Cement Pumpers (B) 56 (5) 3 54
Deep Coiled Tubing Units (C) 22 (4) 0 18
Shallow Coiled Tubing Units 8 (3) 0 5
Nitrogen Pumpers (D) 30 (3) 1 28
Acidizing Units 12 0 0 12
----------------------------------------------------------------------------

A - expected capacity based on approved capital budget which is subject to
change
B - 2 pumpers will be transferred to Russia and 1 to Algeria. 2 older units
will be retired from Cdn. Operations
C - 3 coil units will be transferred to Russia and 1 unit to Algeria
D - 2 units will be transferred to Russia and 1 to Algeria


Russian Operations

As announced last December, our Board of Directors approved a business plan for our Russian operations that includes a record $US 77.0 million capital budget. Under this plan, we expect to add three fracturing crews and three cement units, and expand our service offering to include coiled tubing and nitrogen services with the addition of three deep coiled tubing and three nitrogen units.

With the slowdown in Canadian operations, some of the previously announced capital expansion will be fulfilled with equipment transferred from Canada. Of the previously announced capital budget, $US 18.6 million of the planned expenditures will be transferred from the Canadian operations fleet.

We are also pleased to announce that the Company has recently been awarded a multi-year contract to provide coiled tubing services in the Krasnyorsk region of Siberia. The three-year contract, which was awarded by JSC Vankorneft, a Rosneft company, is expected to generate approximately $US 45 million of revenue over the life of the contract. The project, which is expected to commence early in 2008, will be the Company's first project in the Eastern Siberia Basin. We will be establishing a new base to support these operations. To support the establishment of this operation, the 2007 capital budget has been increased by $US 6.0 million.

Despite this increase, as a result of the opportunity to transfer equipment from Canadian operations the 2007 budget has been reduced to $US 64.4 million or approximately Cdn. $76.0 million.

Equipment Continuity

The following table sets out our current plans for equipment capacity for our Russian operations for 2007.



Number of Units
- Russian Operations Current Transfers Additions Ending(A)
----------------------------------------------------------------------------
Fracturing Crews
Conventional 8 1 2 11
Cement Pumpers 3 3 0 6
Deep Coiled Tubing Units 0 3 0 3
Nitrogen Pumpers 0 3 0 3
----------------------------------------------------------------------------

A - expected capacity based on approved capital budget which is subject to
change


U.S. Operations

Our previously announced acquisition of Liberty Pressure Pumping was completed on March 8, 2007 and the results from these operations will be included in our first quarter results from this day forward.

Liberty began the year with four fracturing crews, with the fifth crew going into service in February prior to our purchase of the company. The Board has recently approved a $US 92.4 million capital budget to further expand Liberty's fracturing operations and establish new operations facilities. Some of the funds will be directed to completing the Longview facility; however, the Company also intends to establish two new operations bases by year end. The Company is currently in discussions with customers regarding the location of these bases and their locations will be announced later in the year.

Liberty's sixth and seventh fracturing crews are expected in Q3, the eighth and ninth crews are expected in Q4 and the tenth crew is expected late in the year.

Equipment Continuity

The following table sets out our current plans for equipment capacity for our U.S. operations for 2007.



Number of Units - U.S. Operations Current Additions Ending(A)
----------------------------------------------------------------------------
Fracturing Crews
Conventional 5 5 10
----------------------------------------------------------------------------

A - expected capacity based on approved capital budget which is subject to
change


International Operations

Trican is pleased to announce that it has recently entered in to a contract with First Calgary Petroleums Ltd. to provide coiled tubing, nitrogen and acidizing services in Algeria. This project, which is expected to commence by mid-year, represents Trican's first operations in Africa - Middle East. The Company is very excited about the potential for our services in this new market and our association with First Calgary Petroleums Ltd.

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 growing operations in Russia and the United States. 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.
    Murray Cobbe
    President and CEO
    (403) 266-0202
    Email: mcobbe@trican.ca
    or
    Trican Well Service Ltd.
    Michael Kelly
    VP, Finance and Administration & CFO
    (403) 266-0202
    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