OKOTOKS, AB, Jan. 12, 2012 /CNW/ - (TSX:MTL) Mullen Group Ltd. ("Mullen Group" and/or the "Corporation") announced today its capital expenditure plan for 2012 as approved by
the Board of Directors. The Board of Directors considered, among other
things, the current state of the economy, the prospects for continued
drilling activity in western Canada and the backlog of major capital
projects related to the development of Canada's oil sands and heavy oil
resources. As a result, the capital budget for Mullen Group has been
set at $100.0 million, an increase of approximately $25.0 million over
the expected capital spent for 2011. This $100.0 million does not
include any capital that may be required for acquisitions.
"This decision reflects not only our confidence in the long term
prospects for the markets Mullen Group serves but also in our 27
independently operated business units. We want to ensure that our
employees continue to have access to the best and most efficient
equipment and have best in-class facilities in which to work, as these
are integral components of our Quality initiatives", commented Murray
K. Mullen, Chairman and Chief Executive Officer.
It is anticipated that the capital budget will be allocated as follows:
$50.0 million to the Oilfield Services segment, $25.0 million to the
Trucking/Logistics segment and $25.0 million for the further
development of Mullen Group's network of facilities.
The majority of the Oilfield Services segment's planned capital
expenditures will be deployed to further develop its operations related
to well servicing and fracing support services with specialized
equipment such as super heaters, hot oilers and combo units in addition
to further expanding its "Pipeline on Wheels" through investment in
fluid hauling equipment. Mullen Group will also deploy capital to
enhance its fleet of trucks, trailers, and support equipment in its
drilling and drilling related operations. Furthermore, Mullen Group
will allocate capital to those business units that service the oil
sands and infrastructure development sector to enhance its fleet of
trucks, specialized hydraulic trailers, pumps and specialized
equipment. The planned capital expenditure of $25.0 million in the
Trucking/Logistics segment will be primarily used to replace trucks and
trailers through the purchase of approximately 60 trucks and 200
Mullen Group's investment in facilities includes its development of an
industrial park in north-east Edmonton, Alberta that will facilitate
the multi-modal movement of industrial and energy related products. In
addition, Mullen Group plans to expand its maintenance and camp
facilities in several markets serving the heavy oil resource plays in
western Canada and it will continue to allocate funds to enhance its
storage and warehousing facilities in the key resource plays in Alberta
and British Columbia.
"Mullen Group believes it is a competitive advantage to own facilities
in key strategic areas so when attractive opportunities arise they will
be pursued. The commencement of the development of a transload and
distribution centre in north-east Edmonton is an initiative that we
believe will result in further opportunities to serve the Alberta
market and thereby expand our presence in this growing market", stated
Stephen H. Lockwood, President and Co-Chief Executive Officer. "The
2012 capital budget does not include any capital that may be required
for acquisitions. We continue to see acquisition opportunities in our
Oilfield Services segment and Trucking/Logistics segment. Mullen Group
will continue to evaluate these opportunities and act upon those that
meet our objectives of generating free cash and enhancing shareholder
value", added Mr. Lockwood.
Mullen Group also announced today its intention to retain its practice
of paying annual dividends of $1.00 per Common Share. Consistent with
past practice, the Board of Directors will continue to determine on a
quarterly basis the amount of, and record date for, the quarterly
"There are significant issues and challenges that continue to dominate
the headlines, events well beyond our control. Here at the Mullen
Group we are taking an optimistic view that 2012 will be another great
year for our organization and we intend on taking full advantage of the
opportunities. This is why our Board of Directors has determined that
directing a larger portion of our free cash to our business units and
leaving the annual dividend at its current level of $1.00 per share is
the best overall value proposition for our shareholders at this time.
Not only are we investing in our future, we strengthen the balance
sheet, which is always a good thing to do", said Mr. Mullen.
This news release may contain forward-looking statements that are
subject to risk factors associated with the oil and natural gas
business and the overall economy. Mullen Group believes that the
expectations reflected in this news release are reasonable, but results
may be affected by a variety of variables. Mullen Group relies on
litigation protection for "forward-looking" statements. Mullen Group
is a company that owns a network of independently operated businesses.
Today the Mullen Group is recognized as the largest provider of
specialized transportation and related services to the oil and natural
gas industry in western Canada and as one of the leading suppliers of
trucking and logistics services in Canada - two sectors of the economy in which Mullen Group has strong business
relationships and industry leadership. Mullen Group provides
management and financial expertise, technology and systems support to
its independent businesses. Mullen Group is a publicly traded
corporation listed on the Toronto Stock Exchange under the symbol "MTL".
Additional information is available on our website at www.mullen-group.com or on SEDAR at www.sedar.com.
SOURCE Mullen Group Ltd.
For further information:
Mr. Murray K. Mullen - Chairman of the Board and Chief Executive Officer
Mr. Stephen H. Lockwood - Co-Chief Executive Officer and President
Mr. P. Stephen Clark - Chief Financial Officer