OKOTOKS, AB, Jan. 20, 2014 /CNW/ - (TSX:MTL) Mullen Group Ltd. ("Mullen Group" and/or the "Corporation") announced today its capital expenditure plan for 2014 as approved by
the Board of Directors (the "Board"). The Board considered a wide range of economic issues, commodity
pricing predictions and forecasted drilling activity for the Western
Canadian Sedimentary Basin as well as recent developments in the
anticipated build out of Canada's infrastructure for LNG and crude
oil. The capital budget for 2014 is set at $100.0 million, with
$75.0 million allocated to the Oilfield Services segment and
$25.0 million allocated to the Trucking/Logistics segment. These funds
will be used to acquire new trucks, trailers and specialized equipment
to support the on-going operations of Mullen Group's business units.
As the need arises, the Board will consider additional capital requests
throughout the year for special projects, the purchase and development
of land, or for acquisitions.
"We expect 2014 to be another good year for the Mullen Group, although
growth will continue to be difficult to achieve given the current
economic outlook as well as the near term prospects for the oil and gas
sector in western Canada. However, looking to the future, growth
opportunities are much brighter, which is the reasoning behind the
Board approving our request for a $100.0 million capital budget in
2014. Quite simply, we want to be prepared", said Murray Mullen,
Chairman and Chief Executive Officer.
"The discussions surrounding LNG exports through Canada's west coast, as
well as crude oil pipelines and infrastructure projects are progressing
and appear to be constructive, although there have been few definitive
announcements to date. One exception is crude by rail, with strong
indications that take-away capacity for crude oil from western Canada
could rise to one million barrels per day by year-end. Our view is
that our customers will benefit from this new capacity. In addition,
it is worth noting that while two percent annual GDP economic growth is
not in itself significant, we believe that there is a compounding
affect to this growth that should ultimately benefit our
Trucking/Logistics segment. There is also another important reason to
continue investing in our 26 business units. Providing our employees
with the newest equipment ensures that they have access to
best-in-class assets and a quality work environment -- prerequisites to
retaining, as well as attracting, a productive work force in this
market. Our investment of $100.0 million in 2014 will ensure that our
business units are well positioned for the future, particularly those
tied to the build out of crude oil take-away capacity and the
development of LNG", added Mr. Mullen.
Mullen Group also announced today its intention to continue its practice
of paying annual dividends of $1.20 per Common Share over the course of
2014, such dividends to be paid on a monthly basis, subject to Board
approval.
Mr. Mullen commented, "Rewarding our shareholders with consistent,
predictable dividends, as well as investing for future growth, are
important elements of Mullen Group's long term Strategic Plan. For
2014 the Board considered various alternatives for the anticipated free
cash flow and determined that investing the incremental free cash into
our 26 business units was the best use of shareholders' capital at this
time."
The Board announced today that it has declared a monthly dividend of
$0.10 per Common Share payable to the holders of record of Common
Shares at the close of business on January 31, 2014. The dividend will
be paid on February 17, 2014. For Canadian resident shareholders, this
dividend is designated as an "eligible dividend" for purposes of the
enhanced dividend tax credit rules contained in the Income Tax Act
(Canada) and any corresponding provincial and territorial tax
legislation.
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.
