CALGARY,
AB, April 25, 2023 /CNW/ - Western Energy
Services Corp. ("Western" or the "Company") (TSX: WRG) announces
the release of its first quarter 2023 financial and operating
results. Additional information relating to the Company,
including the Company's financial statements and management's
discussion and analysis as at March 31,
2023 and for the three months ended March 31, 2023 and 2022 ("MD&A") will be
available on SEDAR at www.sedar.com. Non-International
Financial Reporting Standards ("Non-IFRS") measures and ratios,
such as Adjusted EBITDA, Adjusted EBITDA as a percentage of
revenue, revenue per Operating Day, revenue per Service Hour and
Working Capital, as well as abbreviations and definitions for
standard industry terms are defined later in this press
release. All amounts are denominated in Canadian dollars
(CDN$) unless otherwise identified.
First Quarter 2023 Operating Results:
- Western's drilling rig upgrade program, which was initiated in
2022, has been a success and has generated a substantial portion of
revenue in the first quarter of 2023. Since the upgrades have
been performed and the rigs recommissioned into service, each
upgraded drilling rig has been working for a customer.
Additionally, the upgraded rigs have generated day rates which
contributed to higher revenue in the first quarter of 2023.
- First quarter revenue increased by $28.7
million or 57%, to $79.2
million in 2023 as compared to $50.5
million in the first quarter of 2022. Contract drilling
revenue totalled $58.1 million in the
first quarter of 2023, an increase of $27.1
million or 88%, compared to $31.0
million in the first quarter of 2022. Production services
revenue was $21.3 million for the
three months ended March 31, 2023, an
increase of $1.7 million or 9%, as
compared to $19.6 million in the same
period of the prior year. In the first quarter of 2023, revenue was
positively impacted by improved pricing in all divisions, as well
as higher activity in contract drilling, compared to the first
quarter of 2022 as described below:
-
- In Canada, Operating Days of
1,283 days in the first quarter of 2023 were 202 days (or 19%)
higher compared to 1,081 days in the first quarter of 2022,
resulting in drilling rig utilization of 42% in the first quarter
of 2023 compared to 32% in the same period of the prior year. The
Canadian Association of Energy Contractors ("CAOEC") industry
average utilization of 45%1 for the
first quarter of 2023 represented an increase of 600 basis points
("bps") compared to the CAOEC industry average utilization of 39%
in the first quarter of 2022. Revenue per Operating Day averaged
$33,275 in the first quarter of 2023,
an increase of 26% compared to the same period of the prior year,
mainly due to rig upgrades, market driven increased pricing, and
inflationary pressures on operating costs, including higher CAOEC
industry wages and fuel charges that are passed through to the
customer;
- In the United States, drilling
rig utilization averaged 45% in the first quarter of 2023, compared
to 14% in the first quarter of 2022, with Operating Days improving
from 100 days in the first quarter of 2022 to 327 days in the first
quarter of 2023. Average active industry rigs of
7442 in the first quarter of 2023 were
20% higher compared to the first quarter of 2022. Revenue per
Operating Day for the first quarter of 2023 averaged US$33,021, a 73% increase compared to
US$19,134 in the same period of the
prior year, mainly due to improved pricing and changes in rig mix,
as there was more activity with the Company's higher spec rigs
which command higher day rates; and
- In Canada, service rig
utilization of 44% in the first quarter of 2023 was lower than 49%
in the same period of the prior year, mainly due to the industry
wide issue of crew availability. Revenue per Service Hour averaged
$1,032 in the first quarter of 2023
and was 18% higher than the first quarter of 2022, due to improved
pricing and inflationary pressures on operating costs, including
higher CAOEC industry wages and fuel charges that are passed
through to the customer.
- Administrative expenses increased by $0.8 million or 24%, to $4.2 million in the first quarter of 2023, as
compared to $3.4 million in the first
quarter of 2022, due to higher employee related costs along with
inflationary cost increases associated with improved industry
activity.
- The Company generated net income of $4.4
million in the first quarter of 2023 ($0.13 net income per basic common share) as
compared to a net loss of $3.8
million in the same period in 2022 ($0.57 net loss per basic common share). The
change can mainly be attributed to an $8.8
million increase in Adjusted EBITDA, a $1.6 million decrease in finance costs due to the
lower total debt balance and a $0.6
million gain on asset disposals, offset partially by a
$1.6 million increase in income tax
expense, a $0.9 million increase in
stock based compensation expense and a $0.4
million increase in depreciation expense due to property and
equipment additions.
- Adjusted EBITDA of $19.2 million
in the first quarter of 2023 was $8.8
million, or 85%, higher compared to $10.4 million in the first quarter of 2022.
Adjusted EBITDA was higher due to improved contract drilling
activity in Canada and the US,
higher pricing across all divisions, and US$0.6 million of shortfall commitment revenue,
which was offset partially by one-time costs of $0.6 million related to reactivating certain
drilling rigs and inflationary cost increases.
- First quarter additions to property and equipment of
$5.2 million in 2023 compared to
$4.1 million in the first quarter of
2022, consisting of $2.7 million of
expansion capital related to the substantial completion of the
Company's rig upgrade program and $2.5
million of maintenance capital.
1
Source: CAOEC, monthly Contractor Summary.
2 Source: Baker Hughes Company, North America
Rotary Rig Count
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
(stated in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
Three months ended March
31
|
|
Financial
Highlights
|
|
|
|
|
2023
|
2022
|
Change
|
|
Revenue
|
|
|
|
|
79,239
|
50,475
|
57 %
|
|
Adjusted
EBITDA(1)
|
|
|
|
|
19,196
|
10,391
|
85 %
|
|
Adjusted EBITDA as a
percentage of revenue(1)
|
|
|
|
|
24 %
|
21 %
|
14 %
|
|
Cash flow from
operating activities
|
|
|
|
|
6,445
|
6,461
|
-
|
|
Additions to property
and equipment
|
|
|
|
|
5,165
|
4,094
|
26 %
|
|
Net income
(loss)
|
|
|
|
|
4,421
|
(3,834)
|
(215 %)
|
|
– basic
and diluted net income (loss) per share(2)
|
|
|
|
|
0.13
|
(0.57)
|
(123 %)
|
|
Weighted average number
of shares(2)
|
|
|
|
|
|
|
|
|
–
basic
|
|
|
|
|
33,841,323
|
6,704,402
|
405 %
|
|
–
diluted
|
|
|
|
|
33,843,048
|
6,704,402
|
405 %
|
|
Outstanding common
shares as at period end(2)
|
|
|
|
|
33,841,324
|
764,899
|
4,324 %
|
|
(1)
See "Non-IFRS Measures and Ratios"
included in this press release.
(2)
On August 2, 2022, the Company's issued
and outstanding common shares were consolidated at a ratio of one
post-consolidation common share for every 120 pre-consolidation
common shares (the "Consolidation") as further described in the
Company's MD&A for the year ended December 31, 2022 and
consolidated financial statements. The comparative 2022
balances and the weighted average number of shares have been
restated to reflect the Consolidation and the May 2022 rights
offering.
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
|
Operating
Highlights(3)
|
2023
|
2022
|
Change
|
Contract
Drilling
|
|
|
|
Canadian
Operations:
|
|
|
Contract drilling rig
fleet:
|
|
|
– Average
active rig count
|
14.3
|
12.0
|
19 %
|
Operating
Days
|
1,283
|
1,081
|
19 %
|
Revenue per Operating
Day(4)
|
33,275
|
26,390
|
26 %
|
Drilling rig
utilization
|
42 %
|
32 %
|
31 %
|
CAOEC industry average
utilization(5)
|
45 %
|
39 %
|
15 %
|
Average meters drilled
per well
|
6,261
|
6,536
|
(4 %)
|
Average Operating Days
per well
|
13.2
|
12.6
|
5 %
|
|
|
|
United States
Operations:
|
|
|
|
|
|
|
Contract drilling rig
fleet:
|
|
|
|
– Average
active rig count
|
3.6
|
1.1
|
227 %
|
Operating
Days
|
327
|
100
|
227 %
|
Revenue per Operating
Day (US$)(4)
|
33,021
|
19,134
|
73 %
|
Drilling rig
utilization
|
45 %
|
14 %
|
221 %
|
Average meters drilled
per well
|
3,516
|
2,295
|
53 %
|
Average Operating Days
per well
|
14.4
|
11.7
|
23 %
|
|
|
|
|
Production
Services
|
|
|
|
Well servicing rig
fleet:
|
|
|
|
– Average
active rig count
|
28.0
|
31.0
|
(10 %)
|
Service
Hours
|
18,253
|
20,173
|
(10 %)
|
Revenue per Service
Hour(4)
|
1,032
|
876
|
18 %
|
Service rig
utilization
|
44 %
|
49 %
|
(10 %)
|
(3)
|
See "Defined Terms"
included in this press release.
|
(4)
|
See "Non-IFRS Measures
and Ratios" included in this press release.
|
(5)
|
Source: The CAOEC
monthly Contractor Summary. The CAOEC industry average is
based on Operating Days divided by total available drilling
days.
|
|
|
Financial Position
at (stated in thousands)
|
March 31, 2023
|
|
December 31,
2022
|
December 31,
2021
|
Working
capital(1)
|
36,581
|
|
21,923
|
2,224
|
Total assets
|
483,532
|
|
475,708
|
456,003
|
Long term
debt
|
129,853
|
|
126,527
|
226,884
|
(1) See "Non-IFRS
Measures and Ratios" included in this press release.
|
Business Overview
Western is an energy services company that provides contract
drilling services in Canada and
the US and production services in Canada through its various divisions, its
subsidiary, and its first nations relationships.
Contract Drilling
Western markets a fleet of 42 drilling rigs specifically suited
for drilling complex horizontal wells across Canada and the US. Western is currently
the fourth largest drilling contractor in Canada, based on the CAOEC registered drilling
rigs3.
Western's marketed and owned contract drilling rig fleets are
comprised of the following:
|
Three months ended
March 31
|
|
2023
|
|
2022
|
Rig
class(1)
|
Canada
|
US
|
Total
|
|
Canada
|
US
|
Total
|
Cardium
|
11
|
1
|
12
|
|
11
|
2
|
13
|
Montney
|
18
|
1
|
19
|
|
19
|
-
|
19
|
Duvernay
|
5
|
6
|
11
|
|
7
|
6
|
13
|
Total marketed
drilling rigs(2)
|
34
|
8
|
42
|
|
37
|
8
|
45
|
Total owned drilling
rigs
|
48
|
8
|
56
|
|
49
|
8
|
57
|
(1) See "Contract
Drilling Rig Classifications" included in this press
release.
|
(2) Source: CAOEC
Contractor Summary as at April 25, 2023
|
Production Services
Production services provides well servicing and oilfield
equipment rentals in Canada.
Western operates 65 well servicing rigs and is the third largest
well servicing company in Canada
based on CAOEC registered well servicing rigs4.
Western's well servicing rig fleet is comprised of the
following:
Owned well servicing
rigs
|
Three months
ended March 31
|
Mast
type
|
2023
|
2022
|
Single
|
30
|
30
|
Double
|
27
|
25
|
Slant
|
8
|
8
|
Total owned well
servicing rigs
|
65
|
63
|
Business Environment
Crude oil and natural gas prices impact the cash flow of
Western's customers, which in turn impacts the demand for Western's
services. The following table summarizes average crude oil
and natural gas prices, as well as average foreign exchange rates,
for the three months ended March 31,
2023 and 2022.
|
|
Three
months ended March 31
|
|
|
|
|
2023
|
2022
|
Change
|
Average crude oil
and natural gas prices(1)(2)
|
|
|
|
|
|
|
Crude
Oil
|
|
|
|
|
|
|
|
West Texas Intermediate
(US$/bbl)
|
|
|
|
76.13
|
94.29
|
(19 %)
|
Western Canadian Select
(CDN$/bbl)
|
|
|
|
74.55
|
101.03
|
(26 %)
|
|
|
|
|
|
|
|
Natural
Gas
|
|
|
|
|
|
|
30 day Spot AECO
(CDN$/mcf)
|
|
|
|
3.35
|
4.94
|
(32 %)
|
|
|
|
|
|
|
|
Average foreign
exchange rates(2)
|
|
|
|
|
|
|
US dollar to Canadian
dollar
|
|
|
|
1.35
|
1.27
|
6 %
|
(1)
See "Abbreviations" included in this
press release.
(2)
Source: Sproule March 31, 2023, Price
Forecast, Historical Prices.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
Source: CAOEC Drilling Contractor Summary as at April 25, 2023.
4 Source: CAOEC Well Servicing Fleet List as at
April 25, 2023.
|
West Texas Intermediate on average decreased by 19% for the three
months ended March 31, 2023, compared
to the same period in the prior year. Similarly, pricing on
Western Canadian Select crude oil decreased by 26% for the three
months ended March 31, 2023, compared
to the same period in the prior year. In 2023, crude oil
prices decreased due to weakening demand for crude oil, as well as
the collapse of several international financial institutions, the
fear of a North American recession and continued high interest
rates implemented to manage inflationary factors. Natural gas
prices in Canada also declined in
2023 due to the same factors, as well as weather related factors,
as the 30-day spot AECO price decreased by 32% for the three months
ended March 31, 2023, compared to the
same period of the prior year. Additionally, the US dollar to
the Canadian dollar foreign exchange rate for the three months
ended March 31, 2023 strengthened by
6% compared to the same period of the prior year.
In the United States, industry
activity improved in the first quarter of 2023. As reported
by Baker Hughes Company5, the number of
active drilling rigs in the United
States increased by approximately 12% to 755 rigs as at
March 31, 2023, as compared to 673
rigs at March 31, 2022. In
Canada, there were 140 active rigs
in the Western Canadian Sedimentary Basin ("WCSB") at March 31, 2023, compared to 130 active rigs as at
March 31, 2022. The
CAOEC6 reported that for drilling in
Canada, the total number of
Operating Days in the WCSB increased by approximately 10% for the
three months ended March 31, 2023,
compared to the same period in the prior year. Despite a more
stable economic market than experienced in past periods, there
remains continued service industry concerns over the prevailing
customer preference to return cash to shareholders through share
buyback programs and dividends, or pay down debt, rather than grow
production through the drill bit thereby limiting industry drilling
activity.
Outlook
In the first quarter of 2023, crude oil prices were impacted in
the short term by the collapse of several international financial
institutions, the fear of a North American recession, and continued
uncertainty concerning the ongoing war in Ukraine.
Additionally, the April 2, 2023,
announcement by Saudi Arabia and
other OPEC+ oil producers to cut oil production, caused crude oil
prices to rise. Events such as these contribute to the
volatility of commodity prices and the precise duration and extent
of the adverse impacts of the current macroeconomic environment on
Western's customers, operations, business and global economic
activity, remains uncertain at this time. Additionally, the
delayed timing of completion of construction on the Trans Mountain
pipeline expansion, now expected to start filling with oil in late
2023 with full operation expected in 2024, and the threatened
shutdown of Enbridge Line 5, have contributed to continued
uncertainty regarding takeaway capacity. Controlling fixed
costs, maintaining balance sheet strength and flexibility and
managing through a volatile market are priorities for the Company,
as prices and demand for Western's services continue to
improve.
As previously announced, Western's board of directors approved a
capital budget for 2023 of $30
million, comprised of $9
million of expansion capital and $21
million of maintenance capital. Western will continue
to manage its costs in a disciplined manner and make required
adjustments to its capital program as customer demand
changes. Currently, 12 of Western's drilling rigs and 6 of
Western's well servicing rigs are operating.
As at March 31, 2023, Western had
$11.1 million drawn on its
$45.0 million Credit Facilities (as
defined in the MD&A) and $10.9
million outstanding on its HSBC Bank Canada six-year
committed term non-revolving facility with the participation of
Business Development Canada (the "HSBC Facility"), which matures on
December 31, 2026. Western
currently has $106.9 million
outstanding on its Second Lien Facility (as defined in the
MD&A).
Energy service activity in Canada will be affected by the continued
development of resource plays in Alberta and northeast British Columbia which will be impacted by
continued pipeline construction, environmental regulations, and the
level of investment in Canada. The January 2023 announcement that the government of
British Columbia and the Blueberry
River First Nations reached an agreement (the "Blueberry
Agreement") which provides a framework for how resource development
may continue within the Blueberry River First Nations claim area,
including the restoration and future development of land, water and
natural resources, is expected to have a positive impact on the
energy industry. Given the recent developments with the
Blueberry Agreement in northeastern British Columbia, there is higher demand for
Montney and Duvernay class rigs and with Western's recent
drilling rig upgrade program substantially complete, the Company is
well positioned to be the contractor of choice to supply drilling
rigs in a tightening market. Western expects its upgraded drilling
rigs to be fully utilized in the future, as such higher spec rigs
are in demand in the current market. Western is also active with
three fit for purpose drilling rigs in the Clearwater formation in northern
Alberta. In the short term, the largest challenges facing the
energy service industry are a lack of qualified field personnel and
the restrained growth in customer drilling activity due to the
continuing preference to return cash to shareholders through share
buybacks, increased dividends and repayment of debt, rather than
grow production. If commodity prices stabilize for an
extended period and as customers strengthen their balance sheets
and satisfy shareholders, we expect that drilling activity will
continue to increase. In the medium term, Western's rig fleet
is well positioned to benefit from the LNG Canada liquefied natural
gas project now under construction in British Columbia.
Western is an experienced deep and long driller in Canada, with an average well length of 6,261
meters drilled per well and an average of 13.2 operating days to
drill per well in 2023. It remains Western's view that its
upgraded drilling rigs and modern well servicing rigs, reputation
for quality and capacity of the Company's rig fleet, and
disciplined cash management provides Western with a competitive
advantage.
5
Source: Baker Hughes Company, 2023 Rig Count monthly press
releases.
6 Source: CAOEC, monthly Contractor
Summary.
|
Non-IFRS Measures and Ratios
Western uses certain financial measures in this press release
which do not have any standardized meaning as prescribed by
International Financial Reporting Standards ("IFRS"). These
measures and ratios, which are derived from information reported in
the condensed consolidated financial statements, may not be
comparable to similar measures presented by other reporting
issuers. These measures and ratios have been described and
presented in this press release to provide shareholders and
potential investors with additional information regarding the
Company. The non-IFRS measures and ratios used in this press
release are identified and defined as follows:
Adjusted EBITDA
Earnings before interest and finance costs, taxes, depreciation
and amortization, other non-cash items and one-time gains and
losses ("Adjusted EBITDA") is a useful non-GAAP financial measure
as it is used by management and other stakeholders, including
current and potential investors, to analyze the Company's principal
business activities prior to consideration of how Western's
activities are financed and the impact of foreign exchange, income
taxes and depreciation. Adjusted EBITDA provides an
indication of the results generated by the Company's principal
operating segments, which assists management in monitoring current
and forecasting future operations, as certain non-core items such
as interest and finance costs, taxes, depreciation and
amortization, and other non-cash items and one-time gains and
losses are removed. The closest IFRS measure would be net
income (loss) for consolidated results.
Adjusted EBITDA as a percentage of revenue is a non-IFRS
financial ratio which is calculated by dividing Adjusted EBITDA by
revenue for the relevant period. Adjusted EBITDA as a
percentage of revenue is a useful financial measure as it is used
by management and other stakeholders, including current and
potential investors, to analyze the profitability of the Company's
principal operating segments.
The following table provides a reconciliation of net income
(loss), as disclosed in the condensed consolidated statements of
operations and comprehensive income, to Adjusted EBITDA:
|
|
Three months ended March 31
|
(stated in
thousands)
|
|
|
2023
|
2022
|
Net income
(loss)
|
|
|
4,421
|
(3,834)
|
Income tax expense
(recovery)
|
|
|
1,167
|
(419)
|
Income (loss) before
income taxes
|
|
|
5,588
|
(4,253)
|
Add
(deduct):
|
|
|
|
|
Depreciation
|
|
|
10,296
|
9,919
|
Stock based
compensation
|
|
|
876
|
32
|
Finance
costs
|
|
|
3,042
|
4,627
|
Other
items
|
|
|
(606)
|
66
|
Adjusted
EBITDA
|
|
|
19,196
|
10,391
|
|
|
|
|
|
|
|
Revenue per Operating Day
This non-IFRS measure is calculated as total drilling revenue
for both Canada and the US
respectively, divided by Operating Days in Canada and the US respectively. This
calculation represents the average day rate by country charged to
Western's customers.
Revenue per Service Hour
This non-IFRS measure is calculated as total well servicing
revenue divided by total Service Hours. This calculation
represents the average hourly rate charged to Western's
customers.
Working Capital
This non-IFRS measures is calculated as current assets less
current liabilities as disclosed in the Company's condensed
consolidated financial statements.
Defined Terms
Average active rig count (contract drilling): Calculated
as drilling rig utilization multiplied by the average number of
drilling rigs in the Company's fleet for the period.
Average active rig count (production services):
Calculated as service rig utilization multiplied by the average
number of service rigs in the Company's fleet for the period.
Average meters drilled per well: Defined as total meters
drilled divided by the number of wells completed in the period.
Average Operating Days per well: Defined as total
Operating Days divided by the number of wells completed in the
period.
Drilling rig utilization: Calculated based on
Operating Days divided by total available days.
Operating Days: Defined as contract drilling days,
calculated on a spud to rig release basis.
Service Hours: Defined as well servicing hours
completed.
Service rig utilization: Calculated as total
Service Hours divided by 217 hours per month per rig multiplied by
the average rig count for the period as defined by the CAOEC
industry standard.
Contract Drilling Rig Classifications
Cardium class rig: Defined as any contract drilling rig
which has a total hookload less than or equal to 399,999 lbs (or
177,999 daN).
Montney class rig:
Defined as any contract drilling rig which has a total hookload
between 400,000 lbs (or 178,000 daN) and 499,999 lbs (or 221,999
daN).
Duvernay class rig:
Defined as any contract drilling rig which has a total hookload
equal to or greater than 500,000 lbs (or 222,000 daN).
Abbreviations
- Barrel ("bbl");
- Basis point ("bps"): A 1% change equals 100 basis points and a
0.01% change is equal to one basis point;
- Canadian Association of Energy Contractors ("CAOEC");
- DecaNewton ("daN");
- International Financial Reporting Standards ("IFRS");
- Pounds ("lbs");
- Thousand cubic feet ("mcf"); and
- Western Canadian Sedimentary Basin ("WCSB").
Forward-Looking Statements and Information
This press release contains certain forward-looking statements
and forward-looking information (collectively, "forward-looking
information") within the meaning of applicable Canadian securities
laws, as well as other information based on Western's current
expectations, estimates, projections and assumptions based on
information available as of the date hereof. All information
and statements contained herein that are not clearly historical in
nature constitute forward-looking information, and words and
phrases such as "may", "will", "should", "could", "expect",
"intend", "anticipate", "believe", "estimate", "plan", "predict",
"potential", "continue", or the negative of these terms or other
comparable terminology are generally intended to identify
forward-looking information. Such information represents the
Company's internal projections, estimates or beliefs concerning,
among other things, an outlook on the estimated amounts and timing
of additions to property and equipment, anticipated future debt
levels and revenues or other expectations, beliefs, plans,
objectives, assumptions, intentions or statements about future
events or performance. This forward-looking information
involves known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information.
In particular, forward-looking information in this press release
includes, but is not limited to, statements relating to: the
business of Western; industry, market and economic conditions and
any anticipated effects on Western; commodity pricing; the future
demand for the Company's services and equipment, in particular, the
Company's expectations regarding improved activity in 2023;
Western's expectations regarding prevailing customer preferences;
the potential impact of the current conflict in Ukraine on commodity prices; the
potential impact of a North American recession; the demand for
Western's services; the pricing for the Company's services and
equipment; the Company's total capital budget for 2023, including
the allocation of such budget; Western's plans for managing its
capital program; the energy service industry and global economic
activity; expectations with respect to the Trans Mountain pipeline
expansion; the potential shutdown of Enbridge Line 5; the positive
impact of the Blueberry River First Nations decision on the energy
industry; the development of Alberta and British
Columbia resource plays; challenges facing the energy
service industry; expectations as to the benefits of the LNG Canada
natural gas project in British
Columbia on the Company and its rig fleet; expectations
relating to producer spending and activity levels for oilfield
services; and the Company's ability to maintain a competitive
advantage, including the factors and practices anticipated to
produce and sustain such advantage.
The material assumptions that could cause results or events to
differ from current expectations reflected in the forward-looking
information in this press release include, but are not limited to:
demand levels and pricing for oilfield services; demand for crude
oil and natural gas and the price and volatility of crude oil and
natural gas; pressures on commodity pricing; the impact of
inflation; the continued business relationships between the Company
and its significant customers; crude oil transport, pipeline and
LNG export facility approval and development; that all required
regulatory and environmental approvals can be obtained on the
necessary terms and in a timely manner, as required by the Company;
liquidity and the Company's ability to finance its operations; the
effectiveness of the Company's cost structure and capital budget;
the effects of seasonal and weather conditions on operations and
facilities; the competitive environment to which the various
business segments are, or may be, exposed in all aspects of their
business and the Company's competitive position therein; the
ability of the Company's various business segments to access
equipment (including spare parts and new technologies); global
economic conditions and the accuracy of the Company's market
outlook expectations for 2023 and in the future; the impact, direct
and indirect, of the COVID-19 pandemic and geopolitical events,
including the war in Ukraine on
Western's business, customers, business partners, employees, supply
chain, other stakeholders and the overall economy; changes in laws
or regulations; currency exchange fluctuations; the ability of the
Company to attract and retain skilled labour and qualified
management; the ability to retain and attract significant
customers; the ability to maintain a satisfactory safety record;
that any required commercial agreements can be reached; that there
are no unforeseen events preventing the performance of contracts
and general business, economic and market conditions.
Although Western believes that the expectations and assumptions
on which such forward-looking information is based on are
reasonable, undue reliance should not be placed on the
forward-looking information as Western cannot give any assurance
that such will prove to be correct. By its nature,
forward-looking information is subject to inherent risks and
uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and
risks. These include, but are not limited to, volatility in
market prices for crude oil and natural gas and the effect of this
volatility on the demand for oilfield services generally; reduced
exploration and development activities by customers and the effect
of such reduced activities on Western's services and products;
political, industry, market, economic, and environmental conditions
in Canada, the United States, Ukraine and globally; supply and demand for
oilfield services relating to contract drilling, well servicing and
oilfield rental equipment services; the proximity, capacity and
accessibility of crude oil and natural gas pipelines and processing
facilities; liabilities and risks inherent in oil and natural gas
operations, including environmental liabilities and risks; changes
to laws, regulations and policies; the ongoing geopolitical events
in Eastern Europe and the duration
and impact thereof; fluctuations in foreign exchange or interest
rates; failure of counterparties to perform or comply with their
obligations under contracts; regional competition and the increase
in new or upgraded rigs; the Company's ability to attract and
retain skilled labour; Western's ability to obtain debt or equity
financing and to fund capital operating and other expenditures and
obligations; the potential need to issue additional debt or equity
and the potential resulting dilution of shareholders; uncertainties
in weather and temperature affecting the duration of the service
periods and the activities that can be completed; the Company's
ability to comply with the covenants under the Credit Facilities,
HSBC Facility and the Second Lien Facility and the restrictions on
its operations and activities if it is not compliant with such
covenants; Western's ability to protect itself from "cyber-attacks"
which could compromise its information systems and critical
infrastructure; disruptions to global supply chains; and other
general industry, economic, market and business conditions.
Readers are cautioned that the foregoing list of risks,
uncertainties and assumptions are not exhaustive. Additional
information on these and other risk factors that could affect
Western's operations and financial results are discussed under the
headings "Risk Factors" in Western's annual information form
for the year ended December 31, 2022,
which may be accessed through the SEDAR website at
www.sedar.com.
The forward-looking statements and information contained in this
news release are made as of the date hereof and Western does not
undertake any obligation to update publicly or revise any
forward-looking statements and information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws. Any forward-looking statements
contained herein are expressly qualified by this cautionary
statement.
SOURCE Western Energy Services Corp.