CALGARY, Jan. 28, 2015 /CNW/ - The Board of Directors of Ensign Energy Services Inc. ("Ensign" or the "Company") has further reduced the Company's capital expenditure plans for the 2015 fiscal year. The revised capital expenditure budget for 2015 has now been set at $220 million, comprised of $140 million growth capital and $80 million maintenance capital.
The reduction in planned capital expenditures is in reaction to continued weakness in oil and natural gas commodity prices since the Company first announced its 2015 capital expenditure budget in early December 2014. The outlook for commodity prices has further declined since that time causing many of Ensign's customers, particularly in North America, to reduce their capital expenditure plans for 2015.
In light of reduced levels of demand for oilfield services and after recent consultations by management with the Company's major customers, the Board of Directors has deferred the construction of an additional eight new ADR drilling rigs from the Company's previously announced new build program. Ensign has delivered two new ADR 1500S drilling rigs since its announcement in December 2014 and now plans to complete six new ADR 1500S drilling rigs and one new ADR 850 drilling rig through the remainder of 2015. All seven of these remaining new builds are contracted or committed to work upon their completion.
Ensign considers it prudent to adopt measures intended to maintain a strong balance sheet throughout this period of weakness in the energy industry. Accordingly, some of its plans to continue to grow the Company through its new build program have been paused until such time as energy industry conditions improve and customer demand begins to strengthen.
In addition to the reduction in the Company's capital expenditure plans, the Board of Directors has reduced board compensation of directors by 20% and reduced the salaries of the Company's named executive officers by 10%, both effective January 1, 2015. Such reductions reflect the Company's belief in the importance of cost control in light of the current oilfield services industry outlook. The Board of Directors of Ensign will continue to monitor evolving industry conditions and may make further adjustments to operating capital or other costs as may be deemed appropriate under the circumstances.
Ensign Energy Services Inc. is an international oilfield services contractor based in Calgary, Alberta. Ensign Common Shares (symbol: ESI) are publicly traded through the facilities of the Toronto Stock Exchange.
SOURCE Ensign Energy Services Inc.
For further information: Ensign Energy Services Inc., 400 - 5th Avenue S.W., Suite 1000, Calgary, Alberta T2P 0L6, Mr. Glenn Dagenais, Executive Vice President Finance and Chief Financial Officer, Telephone: (403) 262-1361