SECURE Energy Services Acquires Production Chemicals Business
17 Apr, 2017, 08:00 ET
CALGARY, April 17, 2017 /CNW/ - Secure Energy Services Inc. ("SECURE" or the "Corporation") (TSX – SES) is pleased to announce that effective April 13, 2017, SECURE has completed an acquisition of the Canadian division of a production chemical business from a US-based multi-national company for an aggregate purchase price of approximately CDN$29.8 million, subject to any post-closing adjustments, with consideration paid in cash ("the Acquisition"). The acquired assets will be integrated into our Drilling and Production Services ("DPS") division's Production Chemicals business line. This Acquisition is another step in the continual growth of SECURE's 90+ service solutions at all stages of the oilfield lifecycle.
"We are very excited to increase our presence in the production chemicals market, including bringing on a highly-qualified group of experienced and dedicated employees," said Rene Amirault, Chairman and Chief Executive Officer of SECURE. "This Acquisition will allow us to accelerate our growth in the market with new opportunities, a highly valued customer base, key infrastructure and synergies within our existing production chemical business."
The acquired assets are primarily related to production chemicals products, providing SECURE with a complete suite of over 100 fully formulated proprietary products including:
- Flow assurance;
- Asset integrity;
- Production optimization; and
- A variety of fracturing and stimulation products.
SECURE has also acquired key infrastructure related to the product offering, which consists of:
- First class blending facility, warehousing and yard space in Red Deer, Alberta;
- Research lab facility with H2S certification in Edmonton, Alberta capable of full service product support and ongoing R&D; and
- Network of 16 sales distribution points throughout the Western Canadian Sedimentary Basin ("WCSB").
SECURE is very pleased to welcome an experienced and dedicated employee base to its team as of April 13th. The continuity of the team will ensure our customer's product and service needs for their ongoing oil and gas production activities will be seamlessly transitioned without interruption.
Our Production Chemicals business line provides solutions that optimize production, provide flow assurance and help our clients maintain the integrity of their production assets. SECURE aims to provide full cycle chemical solutions to our customers, supported by an experienced technical team in our lab facilities in Calgary and Edmonton, Alberta, as well as our diverse field locations.
The production chemicals market has seen steady cumulative annual growth over the last decade, with growth in oil production and associated water being key drivers. New challenges in optimizing production continue to emerge as tight reservoirs require specialized, custom chemical solutions. SECURE's ability to meet this challenge is now bolstered by its addition of advanced specialty chemical products and a sophisticated research lab that will continue to innovate and design customized chemical solutions for customers.
SECURE has added industry leading technology in all facets of flow assurance, asset integrity and production optimization. With this proprietary product portfolio, SECURE has the opportunity for meaningful sales growth in the production, stimulation and fracturing segments. The fracturing market is expected to expand as the market recovers and more wells continue to be drilled and completed.
The Acquisition provides SECURE with 88 experienced employees, with the additional know how and an infrastructure base to augment and accelerate our growth to better serve our customers. SECURE has now acquired a product portfolio with over 17 years of product sales and development in the industry, serving a diversified group of top tier clients.
The Corporation expects the acquisition to be accretive to funds from operations, adjusted EBITDA and net income.
Certain statements contained in this new release constitute "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as forward-looking statements). When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", and similar expressions, as they relate to SECURE, or its management, are intended to identify forward-looking statements. Such statements reflect the current views of SECURE with respect to future events and operating performance and speak only as of the date of this document. In particular, this document contains or implies forward-looking statements pertaining to: anticipated benefits of the Acquisition, expected synergies with SECURE's production chemical business, anticipated growth in SECURE's production chemicals and completion chemicals businesses, including sales growth, and anticipated growth in completion products markets through market recovery and increased drilling activity.
Forward-looking statements concerning expected operating and economic conditions are based upon prior year results as well as the assumption that levels of market activity and growth will be consistent with industry activity in Canada and the U.S. and similar phases of previous economic cycles. Forward-looking statements concerning the relative future competitive position of the Corporation are based upon the assumption that economic and operating conditions, including commodity prices, crude oil and natural gas storage levels, interest and foreign exchange rates, the regulatory framework regarding oil and natural gas royalties, environmental regulatory matters, the ability of the Corporation and its subsidiaries to successfully market their services and drilling and production activity in North America will lead to sufficient demand for the Corporation's services and its subsidiaries' services including demand for oilfield services for drilling and completion of oil and natural gas wells, that the current business environment will remain substantially unchanged, and that present and anticipated programs and expansion plans of other organizations operating in the energy industry may change the demand for the Corporation's services and its subsidiaries' services. Forward-looking statements concerning the nature and timing of growth are based on past factors affecting the growth of the Corporation, past sources of growth and expectations relating to future economic and operating conditions.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to those factors referred to and under the heading "Business Risks" in SECURE's latest Management's Discussion and Analysis and under the heading "Risk Factors" in the Corporation's Annual Information Form (for the year ended December 31, 2016 and also includes the risks associated with the possible failure to realize the anticipated synergies in integrating the assets acquired in the Acquisition with the operations of SECURE. Although forward-looking statements contained in this document are based upon what the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements in this document are expressly qualified by this cautionary statement. Unless otherwise required by law, SECURE does not intend, or assume any obligation, to update these forward-looking statements.
NON-GAAP MEASURES, OPERATIONAL DEFINITIONS AND ADDITIONAL SUBTOTALS
The Corporation uses accounting principles that are generally accepted in Canada (the issuer's "GAAP"), which includes International Financial Reporting Standards ("IFRS"). Certain supplementary measures in this document do not have any standardized meaning as prescribed by IFRS, including the non-GAAP measure adjusted EBITDA. These non-GAAP measures, operational definitions and additional subtotals used by the Corporation may not be comparable to similar measures presented by other reporting issuers. These non-GAAP financial measures, operational definitions and additional subtotals are included because management uses the information to analyze operating performance, leverage and liquidity. Therefore, these non-GAAP financial measures, operational definitions and additional subtotals should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. See the management's discussion and analysis available at www.sedar.com for a reconciliation of the Non-GAAP financial measures, operational definitions and additional subtotals.
ABOUT SECURE ENERGY SERVICES INC.
SECURE is a TSX publicly traded energy services company that provides safe, innovative, efficient and environmentally responsible fluids and solids solutions to the oil and gas industry. The Corporation owns and operates midstream infrastructure and provides environmental services and innovative products to upstream oil and natural gas companies operating in western Canada and certain regions in the United States ("U.S.").
The Corporation operates three divisions:
Processing, Recovery and Disposal Division ("PRD"): The PRD division owns and operates midstream infrastructure that provides processing, storing, shipping and marketing of crude oil, oilfield waste disposal and recycling. More specifically these services are clean oil terminalling and rail transloading, custom treating of crude oil, crude oil marketing, produced and waste water disposal, oilfield waste processing, landfill disposal, and oil purchase/resale service. SECURE currently operates a network of facilities throughout Western Canada and in North Dakota, providing these services at its full service terminals ("FST"), landfills, stand-alone water disposal facilities ("SWD") and full service rail facilities ("FSR").
Drilling and Production Services Division ("DPS"): The DPS division provides equipment and product solutions for drilling, completion and production operations for oil and gas producers in Western Canada. The drilling service line comprises the majority of the revenue for the division which includes the design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas. The drilling service line focuses on providing products and systems that are designed for more complex wells, such as medium to deep wells, horizontal wells and horizontal wells drilled into the oil sands. The production services line focuses on providing equipment and chemical solutions that optimize production, provide flow assurance and maintain the integrity of production assets.
Onsite Services Division ("OS"): The operations of the OS division include Projects which include pipeline integrity (inspection, excavation, repair, replacement and rehabilitation), demolition and decommissioning, and reclamation and remediation of former wellsites, facilities, commercial and industrial properties, and environmental construction projects (landfills, containment ponds, subsurface containment walls, etc.); Environmental services which provide pre-drilling assessment planning, drilling waste management, remediation and reclamation assessment services, Naturally Occurring Radioactive Material ("NORM") management, waste container services, and emergency response services; and Integrated Fluid Solutions ("IFS") which include water management, recycling, pumping and storage solutions.
SOURCE SECURE Energy Services Inc.
For further information: Secure Energy Services Inc.: Rene Amirault, Chairman, President and Chief Executive Officer, Phone: (403) 984-6100, Fax: (403) 984-6101; Allen Gransch, Executive Vice President and Chief Financial Officer, Phone: (403) 984-6100, Fax: (403) 984-6101; Website: www.secure-energy.com, TSX Symbol: SES
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