CALGARY, June 4, 2019 /CNW/ - Tervita Corporation ("Tervita" or the "Corporation") (TSX: TEV) announced today a long term commercial agreement with a Senior E&P Producer ("Producer") to develop a pipeline connected dedicated disposal infrastructure project. The agreement provides Tervita with minimum volume commitments over a five year term with the potential to negotiate an extension. The agreement gives the Producer guaranteed access to cost efficient water disposal, allowing the Producer to prioritize their capital spending on their core operations.
Under the agreement, Tervita is developing a water disposal network including multiple water disposal wells and a centralized water injection facility pipeline connected to the Producer's production facilities, in one of the most prolific areas of activity in the Alberta Montney. The disposal infrastructure is expected to be constructed throughout 2019 and commissioned in Q1 2020.
"We are excited about working in partnership to provide long term, committed services that are cost effective, leverage efficiencies and allow our customer to free up resources to focus on their own corporate initiatives, through our safe, efficient and environmentally responsible solutions," said John Cooper, President and CEO of Tervita. "This innovative business model demonstrates our expertise in seamlessly integrating with customers to align with their standards for operational excellence, and we are pursuing more opportunities like this with customers."
In connection with the full commitment to this agreement and the success of our drilling program to date, we now anticipate spending approximately $90-$100 million on expansion and growth projects versus our previous guidance of $60-$100 million. Tervita continues to see customer demand that supports a further $200-$300 million pipeline of organic growth capital projects providing attractive after tax rates of returns and paybacks of three to five years.
Tervita is a leading waste management and environmental solutions provider offering waste processing, treating, recycling, and disposal services to customers in the oil and gas, mining, and industrial sectors. We serve our customers onsite and through a network of facilities in Canada and the United States.
For 40 years, Tervita has been focused on delivering safe and efficient solutions through all phases of a project while minimizing impact, maximizing returns™. Our dedicated and experienced employees are trusted sustainability partners to our clients. Safety is our top priority: it influences our actions and shapes our culture. Tervita trades on the TSX under the ticker TEV. For more information, visit tervita.com.
This news release contains certain statements that may be "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws. Forward looking statements are statements that are not historical facts and are often, but not always, identified using words or phrases such as "expects", "plans", "anticipates", "believes", "intends", "estimates", "estimated", "projects", "potential" and similar expressions, or stating that certain actions, events or conditions "will", "would", "may", "might", "could" or "should" occur or be achieved or other similar terminology. In particular, but without limiting the foregoing, this news release contains forward-looking statements or information pertaining to the expected timeframes for construction and commissioning of the disposal infrastructure, anticipated spending on expansion and growth projects and expectations surrounding the value of the pipeline of organic growth capital projects and such projects' after tax rates of return and payback timelines. Risks and uncertainties that may affect actual results include, without limitation, risks to the construction and commissioning process that may arise that are outside of Tervita's control and risks that the assumptions Tervita has made regarding the typical timeframe for constructing and completing such a project do not prove to be correct. In addition, Tervita's expectations regarding future spending and the value of organic growth capital projects are subject to the risks inherent in Tervita's business. Accordingly, this news release is subject to the disclaimer and is qualified by the assumptions, qualifications and risk factors referred to in management's discussion and analysis dated May 2, 2019 and in Tervita's 2019 annual report , each of which are available under Tervita's profile on SEDAR at sedar.com, including factors such as the general economic conditions and dependency on exploration and production activity levels in the markets, changes in environmental regulations and increase in market competition and changes in industry practices, all of which may affect the Corporation's ability to achieve success with the agreement. Although Tervita believes the expectations expressed in such forward-looking statements and information are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements.
The forward-looking statements and information included in this news release are expressly qualified in their entirety by this cautionary statement. Tervita cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements and information contained in this news release are made as of the date hereof, and, except as required by law, Tervita does not undertake any obligation to update publicly or to revise any of the included forward-looking statements or information, whether as a result of new information, change in management's estimates or opinions, future circumstances or events or otherwise, except as expressly required by applicable securities law.
SOURCE Tervita Corporation
For further information: Investor Relations: 1-866-233-6690, IR@tervita.com