CALGARY, Jan. 22 /CNW/ - Flint Energy Services Ltd. (Flint, the Company)
announced today that it has analyzed the potential impacts of Suncor Energy's
recently announced plans for a reduction in Suncor's capital expenditures on
Flint's business for 2009. Suncor is a valued client of Flint's Facility
Infrastructure Division. Based on Suncor's announcement, Flint anticipates a
possible reduction in 2009 revenues for its Facility Infrastructure division
of between $100 - $150 million from 2008 levels.
It is anticipated that the greatest immediate impact will be felt as a
result of Suncor's decision to postpone completion of its Firebag 3 project in
Fort McMurray, Alberta; currently approximately 50% complete. Flint will be
working with Suncor as it demobilizes from the project to ensure that the
project is left in what has been described as a "safe mode" to preserve and
protect the facilities currently fabricated or constructed and to permit
future resumption of work on the project.
The Suncor project postponement will result in an immediate layoff of
construction workers. Additional layoffs will follow once the project has
reached "safe mode".
Work continues on Flint's clients' other oil sands projects, including
Albian Sands' Expansion 1, Suncor Firebag's Sulfur Plant, and StatoilHydro's
The Suncor announcement will result in a delay in the realization on
Flint's Facility Infrastructure's backlog which stood at approximately $800
million at the end of 2008.
Bill Lingard, President and CEO of Flint said, "This is disappointing
news for Flint and our people who have been involved with the project.
However, we recognize and respect the reasoning behind this decision. We are
working closely with Suncor to complete all necessary work on the site in
preparation for what we hope is a short-run postponement of the project. We
are confident that oil sands development will continue, albeit at a reduced
pace for now."
The Company further announced that every effort will be made to transfer
affected workers to Flint's other projects where their skills are needed.
Flint's heavy and specialty hauling business segment within its Oilfield
Services division will also be impacted by this announcement, but layoffs are
not anticipated at this time.
Flint Energy Services Ltd. is a market leader providing an expanding
range of integrated products and services for the oil and gas industry
including: production services; field construction; oilfield transportation;
process equipment design and manufacturing; and tubular management services.
Flint provides this unique breadth of products and services through over 60
strategic locations in the oil and gas producing areas of western North
America, from Inuvik in the Northwest Territories to Mission, Texas on the
Mexican border. Flint is a preferred provider of infrastructure construction
management, module fabrication, and maintenance services for upgrading and
production facilities in Alberta's fast growing oil sands sector.
FORWARD LOOKING STATEMENTS
Certain statements in this news release are "forward-looking statements",
which reflect current expectations of the management of Flint regarding future
events or Flint's future performance. All statements other than statements of
historical fact contained in this news release may be forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in the forward-looking statements.
Flint believes that the expectations reflected in such forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking statements
should not be unduly relied upon. The forward-looking statements are expressly
qualified in their entirety by this cautionary statement. The forward-looking
statements are made as of the date of this news release and Flint assumes no
obligation to update or revise them to reflect new events or circumstances,
except as expressly required by applicable securities law. Further information
regarding risks and uncertainties relating to Flint and its securities can be
found in the disclosure documents filed by Flint with the securities
regulatory authorities, available at www.sedar.com.
For further information:
For further information: Guy Cocquyt, Director of Investor Relations,
Flint Energy Services Ltd., Telephone: (403) 218-7195,
firstname.lastname@example.org, Website: www.flintenergy.com