/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Dec. 11, 2014 /CNW/ - Cathedral Energy Services Ltd. (the "Company" or "Cathedral" / TSX: CET) announces that the Company's Board of Directors have approved a 2015 capital budget of $15 million which includes $11.2 million of growth expenditures, $3.3 million of maintenance expenditures and $0.5 million of infrastructure expenditures.
The Directional Drilling division is expected to invest $13.1 million of the 2015 capital budget including $10.2 million for growth, $2.4 million for maintenance and $0.5 million for infrastructure. Growth capital expenditures will include the addition of mud motors and drill collars for the replacement of high rental expense items and an initial build of 25 motors for a Canadian mud motor rental fleet. Maintenance capital expenditures are expected to allow for: 1) continued enhancement of the Company's Fusion MWD platform electronics; 2) addition of mud pulse transmitters for expanded Fusion MWD dual telemetry capabilities; 3) continued conversion of legacy motors to Cathedral's proprietary mud motor bearing section; and 4) expansion of mud motor power section fleet to improve equipment uptime and provide new configurations requested by customers. The infrastructure investment of $0.5 million relates to the remaining construction costs for an operations facility in Oklahoma City with full service repair capabilities. Cathedral has entered into a Purchase and Sale Agreement related to the facility being built in Oklahoma City. The Company expects this transaction to close approximately March 31, 2015 with net proceeds of approximately $4.8 million.
The Flowback and Production Testing division anticipates investing a total of $1.9 million. Growth capital expenditures of $1.0 million relate to storage tanks and additional equipment that would otherwise be rented. Maintenance expenditures of $0.9 million are planned in relation to unit upgrades and costs associated with redeploying units from Canada to the U.S.
Cathedral intends to finance its 2015 capital budget from cash flow from operations, proceeds of the Oklahoma City facility sale and leaseback, and if necessary, its existing credit facility.
Given current industry oil price dynamics, Cathedral may adjust its capital budget to match industry activity levels as the year progresses. The 2015 capital budget contains short lead time items which provides flexibility for adjustments as required.
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Cathedral Energy Services Ltd. (the "Company" or "Cathedral"), based in Calgary, Alberta is incorporated under the Business Corporations Act (Alberta) and operates in the U.S. under Cathedral Energy Services Inc. The Company is publicly traded on the Toronto Stock Exchange under the symbol "CET". Cathedral is a trusted partner to North American energy companies requiring high performance directional drilling services and dependable flowback and production testing solutions. We work in partnership with our customers to tailor our equipment and expertise to meet their specific geographical and technical needs. Our experience, technologies and responsive personnel enable our customers to achieve higher efficiencies and lower project costs. For more information, visit www.cathedralenergyservices.com..
SOURCE Cathedral Energy Services Ltd.
Requests for further information should be directed to: P. Scott MacFarlane, President and Chief Executive Officer; Randy Pustanyk, Executive Vice President and Chief Operating Officer or Michael F. Hill, Chief Financial Officer, Cathedral Energy Services Ltd., 6030 3 Street S.E., Calgary, Alberta T2H 1K2, Telephone: 403.265.2560, Fax: 403.262.4682Copyright CNW Group 2014