CALGARY, May 21, 2020 /CNW/ - Western Energy Services
Corp. ("Western" or the "Company") (TSX: WRG) announces the release
of its first quarter 2020 financial and operating results.
Additional information relating to the Company, including the
Company's financial statements and management's discussion and
analysis as at and for the three months ended March 31, 2020 and 2019 will be available on
SEDAR at www.sedar.com. Non-International Financial Reporting
Standards ("Non-IFRS") measures, such as Adjusted EBITDA, and
abbreviations for standard industry terms are included in this
press release. All amounts are denominated in Canadian
dollars (CDN$) unless otherwise identified.
First Quarter 2020 Operating Results:
- First quarter revenue decreased by $14.0
million to $51.8 million in
2020 as compared to $65.8 million in
the first quarter of 2019. In the contract drilling segment,
revenue totalled $34.2 million in the
first quarter of 2020, a decrease of $15.2
million (or 31%) as compared to $49.4
million in the first quarter of 2019. In the production
services segment, revenue totalled $17.7
million for the three months ended March 31, 2020, as compared to $16.4 million for the three months ended
March 31, 2019, an increase of
$1.3 million (or 8%). While contract
drilling day rates were higher in the
United States and Canada,
and activity and hourly rates were higher for well servicing in
Canada, lower contract drilling
and oilfield rental equipment activity impacted revenue as
described below:
-
- Drilling rig utilization – Operating Days ("Drilling Rig
Utilization") in Canada decreased
to 26% in the first quarter of 2020 compared to an average of 34%
in the same period of the prior year, reflecting an 800 basis
points ("bps") reduction. The decrease in activity in 2020 was
mainly attributable to the significant decrease in crude oil prices
in the latter part of the first quarter, as a result of the
international price war and the COVID-19 pandemic, which resulted
in heightened market uncertainty and customers reducing and
cancelling their 2020 drilling programs. First quarter 2020
Drilling Rig Utilization of 26% represented a discount of 900 bps
to the Canadian Association of Oilwell Drilling Contractors
("CAODC") industry average of 35%1, a decrease as
compared to the first quarter of 2019 when Drilling Rig Utilization
of 34% was 500 bps higher than the industry average. The decrease
in the Company's utilization as compared to the industry average in
2020 was due to Western's decision to hold day rates steady and
customers cancelling their drilling programs. Western's market
share, represented by the Company's Operating Days as a percentage
of the CAODC's total Operating Days in the Western Canadian
Sedimentary Basin ("WCSB"), decreased to 7.2% in the first quarter
of 2020, as compared to 9.8% in the first quarter of 2019. Revenue
per Billable Day improved by 3% in the first quarter of 2020, as
compared to the same period in the prior year, due to changes in
the average rig mix and higher third party revenue as more fuel was
purchased on behalf of the Company's customers;
- In the United States, two of
the Company's eight drilling rigs worked during the quarter, one of
which operated on a term contract. Drilling Rig Utilization was 20%
in the first quarter of 2020, compared to 64% in the first quarter
of 2019, reflecting a 66% decrease in Operating Days. Revenue per
Billable Day for the first quarter of 2020 was consistent with the
same period of the prior year, mainly due to changes in the average
rig mix as the higher day rates on the Company's high specification
Duvernay class rigs in the
Williston Basin in North Dakota, were offset by the rigs working
in the Permian Basin in Texas,
which worked at lower average day rates, while operating at a
significantly lower cost; and
- In Canada, service rig
utilization was 37% in the first quarter of 2020 compared to 36% in
the same period of the prior year. The increase is due to continued
efforts by management to improve activity with existing customers
and broaden the Company's customer base, despite continued market
uncertainty including historic low commodity prices in the latter
half of the first quarter. Revenue per Service Hour increased
during the first quarter of 2020 by 8%, as compared to the same
period in the prior year, due to changes in the average rig mix.
Higher utilization and pricing, led to well servicing revenue in
the period increasing to $15.6
million, an improvement of $1.8
million (or 13%), as compared to the same period in the
prior year.
- Administrative expenses decreased by $0.5 million (or 5%) to $3.8 million in the first quarter of 2020, as
compared to $4.3 million in the first
quarter of 2019, mainly due to lower employee related costs.
- As a result of continued market uncertainty, ultra-low
commodity prices, unprecedented demand destruction due to the
COVID-19 pandemic and the related outlook for current and future
oilfield services activity and pricing, the Company completed an
impairment test for each of its cash generating units ("CGU") as at
March 31, 2020. Based on the results
of these tests, it was determined that property and equipment in
the Company's contract drilling and oilfield rentals CGUs was
impaired by $9.5 million and
$2.0 million respectively. There was
no impairment recognized in the Company's well servicing CGU.
- The Company incurred a net loss of $15.3
million in the first quarter of 2020 ($0.17 per basic common share) as compared to a
net loss of $7.1 million in the same
period in 2019 ($0.08 per basic
common share). The change can mainly be attributed to a
$2.8 million decrease in Adjusted
EBITDA and the $11.5 million
impairment loss, offset partially by a $3.5
million decrease in depreciation expense due to certain
assets being fully depreciated in the period and by a $2.6 million increase in income tax
recovery.
- First quarter Adjusted EBITDA decreased by $2.8 million (or 25%) to $8.4 million in 2020 as compared to $11.2 million in the first quarter of 2019. The
year over year change in Adjusted EBITDA is due to lower contract
drilling activity in Canada and
the United States, and lower
oilfield rental equipment activity in Canada, offset partially by higher well
servicing activity and hourly rates in Canada.
- First quarter 2020 additions to property and equipment of
$0.6 million included $0.1 million related to expansion capital and
$0.5 million of maintenance capital.
In total, additions to property and equipment in the first quarter
of 2020 decreased by $1.6 million (or
74%) from the $2.2 million incurred
in the first quarter of 2019.
- On January 6, 2020, the Company
announced a normal course issuer bid (the "Bid"), which was filed
with and accepted by the Toronto Stock Exchange. Pursuant to the
Bid, Western may purchase for cancellation up to 5,200,000 common
shares of the Company. The Bid commenced on January 14, 2020 and will terminate the earlier
of: (i) January 13, 2021; and (ii)
the date on which the maximum number of common shares are purchased
pursuant to the Bid. Since the commencement of the Bid, in the
first quarter of 2020, 1,584,000 common shares for a total cost of
approximately $0.5 million have been
repurchased. Effective May 21,
2020, Western determined to suspend further purchases under
its share repurchase program. Western may determine to
recommence purchases under its program or otherwise modify its
share purchase plans in the future at any time without prior
notice.
1
|
Source: CAODC,
monthly Contractor Summary.
|
Selected Financial
Information
|
|
|
(stated in
thousands, except share and per share amounts)
|
|
|
|
|
Three
months ended March 31
|
Financial
Highlights
|
|
2020
|
2019
|
Change
|
Revenue
|
|
51,765
|
65,775
|
(21%)
|
Adjusted
EBITDA(1)
|
|
8,361
|
11,248
|
(26%)
|
Adjusted EBITDA as a
percentage of revenue
|
|
16%
|
17%
|
(6%)
|
Cash flow from
operating activities
|
|
1,539
|
5,888
|
(74%)
|
Additions to property
and equipment
|
|
575
|
2,192
|
(74%)
|
Net loss
|
|
(15,331)
|
(7,078)
|
117%
|
– basic
net loss per share
|
|
(0.17)
|
(0.08)
|
113%
|
–
diluted net loss per share
|
|
(0.17)
|
(0.08)
|
113%
|
Weighted average
number of shares
|
|
|
|
|
–
basic
|
|
91,892,784
|
92,306,835
|
-
|
–
diluted
|
|
91,892,784
|
92,306,835
|
-
|
Outstanding common
shares as at period end
|
|
90,918,814
|
92,307,042
|
(2%)
|
(1) |See
"Non-IFRS measures" included in this press release.
|
|
|
|
Three months ended
March 31
|
Operating
Highlights(2)
|
|
2020
|
2019
|
Change
|
Contract
Drilling
|
|
|
|
|
Canadian
Operations:
|
|
|
|
|
Contract drilling rig
fleet:
|
|
|
|
|
–
Average active rig count
|
|
14.7
|
18.7
|
(21%)
|
– End of
period
|
|
49
|
49
|
-
|
Revenue per Billable
Day
|
|
22,091
|
21,484
|
3%
|
Revenue per Operating
Day
|
|
25,050
|
24,241
|
3%
|
Operating
Days
|
|
1,179
|
1,493
|
(21%)
|
Drilling rig
utilization – Billable Days
|
|
30%
|
38%
|
(21%)
|
Drilling rig
utilization – Operating Days
|
|
26%
|
34%
|
(24%)
|
CAODC industry
average utilization – Operating Days(3)
|
|
35%
|
29%
|
21%
|
|
|
|
|
|
United States
Operations:
|
|
|
|
|
Contract drilling rig
fleet:
|
|
|
|
|
–
Average active rig count
|
|
1.8
|
5.5
|
(67%)
|
– End of
period
|
|
8
|
8
|
-
|
Revenue per Billable
Day (US$)
|
|
20,056(4)
|
19,976
|
-
|
Revenue per Operating
Day (US$)
|
|
22,945(4)
|
23,567
|
(3%)
|
Operating
Days
|
|
142
|
423
|
(66%)
|
Drilling rig
utilization – Billable Days
|
|
22%
|
75%
|
(71%)
|
Drilling rig
utilization – Operating Days
|
|
20%
|
64%
|
(69%)
|
|
|
|
|
|
Production
Services
|
|
|
|
|
Canadian
Operations:
Well servicing rig
fleet:
|
|
|
|
|
–
Average active rig count
|
|
23.6
|
22.8
|
4%
|
– End of
period
|
|
63
|
63
|
-
|
Revenue per Service
Hour
|
|
727
|
673
|
8%
|
Service
Hours
|
|
21,491
|
20,498
|
5%
|
Service rig
utilization
|
|
37%
|
36%
|
3%
|
(2)
|
See "Defined Terms"
included in this press release.
|
|
(3)
|
Source: The
Canadian Association of Oilwell Drilling Contractors ("CAODC")
monthly Contractor Summary. The CAODC industry average is
based on Operating Days divided by total available drilling
days.
|
|
(4)
|
Excludes shortfall
commitment revenue from take or pay contracts of US$0.2 million for
the three months ended March 31, 2020.
|
|
Financial Position
at (stated in thousands)
|
March 31,
2020
|
December 31,
2019
|
March 31,
2019
|
Working
capital
|
20,918
|
7,031
|
24,213
|
Property and
equipment
|
496,974
|
511,052
|
609,117
|
Total assets
|
542,131
|
550,537
|
663,117
|
Long term
debt
|
239,118
|
228,274
|
238,590
|
Western is an oilfield service company focused on three core
business lines: contract drilling, well servicing and oilfield
rental equipment services. Western provides contract drilling
services through its division, Horizon Drilling ("Horizon") in
Canada, and its wholly owned
subsidiary, Stoneham Drilling Corporation ("Stoneham") in
the United States ("US").
Western provides well servicing and oilfield rental equipment
services in Canada through its
wholly owned subsidiary Western Production Services Corp. ("Western
Production Services"). Western Production Services' division,
Eagle Well Servicing ("Eagle") provides well servicing operations,
while its division, Aero Rental Services ("Aero") provides oilfield
rental equipment services. Stoneham's division, Western Oilfield
Services, provides well servicing operations in the United
States. Financial and operating results for Horizon and
Stoneham are included in Western's
contract drilling segment, while financial and operating results
for Eagle, Aero, and Western Oilfield Services are included in
Western's production services segment.
Western has a drilling rig fleet of 57 rigs specifically suited
for drilling complex horizontal wells. Western is currently
the fourth largest drilling contractor in Canada, based on the CAODC registered
rigs2, with a fleet of 49 rigs operating through
Horizon. Of the Canadian fleet, 23 are classified as Cardium
class rigs, 19 as Montney class
rigs and seven as Duvernay class
rigs. As compared to the Cardium class rigs, the Montney class rigs have a larger hookload,
while the Duvernay class rigs have
the largest hookload allowing the rig to support more drill pipe
downhole. Additionally, Western has eight drilling rigs
operating through Stoneham in the
US, including six Duvernay class
rigs. Western is also the fourth largest well servicing
company in Canada, based on the
CAODC registered rigs3, with a fleet of 63 rigs
operating through Eagle. Additionally, Western Oilfield
Services operates three well servicing rigs in the Bakersfield area of California in the US. Western's oilfield
rental equipment division, which operates through Aero, provides
oilfield rental equipment for hydraulic fracturing services, well
completions and production work, coil tubing and drilling
services.
Crude oil and natural gas prices impact the cash flow of
Western's customers, which in turn impacts the demand for Western's
services. The following table summarizes average crude oil
and natural gas prices, as well as average foreign exchange rates,
for the three months ended March 31,
2020 and 2019.
|
|
Three months ended March 31
|
|
|
2020
|
2019
|
Change
|
Average crude oil
and natural gas prices(1)(2)
|
|
|
|
|
Crude
Oil
|
|
|
|
|
West Texas
Intermediate (US$/bbl)
|
|
46.17
|
54.87
|
(16%)
|
Western Canadian
Select (CDN$/bbl)
|
|
34.10
|
59.15
|
(42%)
|
|
|
|
|
|
Natural
Gas
|
|
|
|
|
30 day Spot AECO
(CDN$/mcf)
|
|
1.98
|
2.57
|
(23%)
|
|
|
|
|
|
Average foreign
exchange rates(2)
|
|
|
|
|
US dollar to Canadian
dollar
|
|
1.34
|
1.33
|
1%
|
(1) See
"Abbreviations" included in this press release.
(2) Source:
Sproule March 31, 2020 Price Forecast, Historical
Prices.
|
West Texas Intermediate ("WTI") on average declined by 16% for
the three months ended March 31,
2020, compared to the same period in the prior year.
Similarly, pricing on Western Canadian Select ("WCS") crude oil
decreased by 42% in the first quarter of 2020, compared to the same
period in the prior year. Crude oil prices in both
Canada and the US were impacted by
the price war between Saudi Arabia
and Russia, coupled with the
ongoing COVID-19 pandemic. Crude oil prices continued to
decrease subsequent to March 31,
2020, significantly impacting the demand for the Company's
services. Natural gas prices in Canada decreased for the three months ended
March 31, 2020, as the 30 day spot
AECO price decreased by 23%, over the same period of the prior
year. The US dollar to the Canadian dollar foreign exchange
rate strengthened quarter over quarter, which had a slightly
positive effect on the cash flows of Western's Canadian customers,
when selling US dollar denominated commodities.
2
|
Source: CAODC
Contractor Summary as at May 21, 2020.
|
3
|
Source: CAODC Fleet
List as at May 21, 2020.
|
In the United States, industry
activity has decreased in the first quarter of 2020. As
reported by Baker Hughes Company4, the number of active
drilling rigs in the United States
decreased by approximately 28% in the first quarter of 2020, as
compared to the same period in the prior year. The crude oil
price war between Saudi Arabia and
Russia, coupled with low demand as
a result of the COVID-19 pandemic have had significant impacts on
industry activity in both the US and in Canada. Prior to the
COVID-19 pandemic, there were also continued industry concerns over
market access, increased regulation, and the prevailing customer
preference to return cash to shareholders, or pay down debt, rather
than grow production in Canada and
the US. The CAODC5 reported that for drilling in
Canada, the total number of
Operating Days in the WCSB increased by approximately 8% for the
three months ended March 31, 2020 as
compared to the same period in the prior year, despite total
industry rig count decreasing by 6% year over year.
Outlook
Two of Western's 57 drilling rigs are under term take or pay
contracts, with one expected to expire in 2020 and the other in
2021. These contracts each typically generate between 250 and
350 Billable Days per year.
Due to decreased activity levels as a result of the
unprecedented demand destruction and ultra-low commodity price
environment associated with the international price war, coupled
with the COVID-19 pandemic, Western's revised capital budget for
2020 is expected to total approximately $2
million, mainly related to maintenance capital.
Western believes the revised 2020 capital budget provides a prudent
use of cash resources to manage its balance sheet. Western
will continue to manage its operations in a disciplined manner and
make required adjustments to its capital program as customer demand
changes.
The significant decrease in crude oil prices in the first
quarter of 2020 resulting from the international price war has
caused increased uncertainty in global markets. Low crude oil
demand associated with the COVID-19 pandemic is having a
significant impact on Western's customers. The precise duration and
extent of the adverse impacts of the current macroeconomic
environment and the COVID-19 pandemic on Western's customers,
operations, business and global economic activity remains highly
uncertain at this time. Additionally, continued uncertainty
surrounding takeaway capacity related to the timing of completion
of the construction on the Trans Mountain pipeline expansion and
the Keystone XL pipeline, as well as the in service date of the
Enbridge Line 3 pipeline replacement, have resulted in 2020 capital
budgets for Western's Canadian customers decreasing considerably
year over year. As such, year over year activity levels in
Canada and the United States are expected to be
significantly lower than 2019 levels. Controlling fixed
costs, maintaining balance sheet flexibility and managing through
the unprecedented market downturn are priorities for the Company,
as prices and demand for Western's services remain below historical
levels. Since the beginning of the year, Western temporarily
reduced its salaried workforce by 52%, reduced cash compensation
for the remaining employees, reduced planned capital expenditures,
and continues to identify opportunities to further streamline its
support structure. Going forward, Western's variable cost
structure, and a prudent capital budget, will aid in preserving
balance sheet strength.
As at March 31, 2020, Western had
$24.0 million drawn on its
$60.0 million credit facilities,
consisting of its $50.0 million
syndicated first lien credit facility (the "Revolving Facility")
and its $10.0 million committed
operating facility (the "Operating Facility" and together the
"Credit Facilities"), which mature on December 17, 2021. Western currently has
$210.7 million outstanding on its
Second Lien Facility, which matures on January 31, 2023.
Oilfield service activity in Canada will be affected by the development of
resource plays in Alberta and
northeast British Columbia which
will be impacted by pipeline construction, environmental
regulations, and the level of investment in Canada. In the
short term, the largest challenges facing the oilfield service
industry are ongoing liquidity concerns as a result of the reduced
customer spending caused by the demand destruction from the
COVID-19 pandemic and international price war, ultra-low crude oil
pricing, and limited take away capacity. However, Western
views the Government of Canada's
decision to contribute $1.7 billion
towards the clean-up of abandoned and orphaned wells favorably and
agrees this will assist with improving industry activity for well
servicing activities in the short term. In the medium term,
Western's rig fleet is well positioned to benefit from the recently
approved liquefied natural gas project in British Columbia.
It remains Western's view that its modern drilling and well
servicing rig fleets, reputation, and disciplined cash management
provide a competitive advantage which will enable the Company to
manage through the current challenging oilfield service
environment.
Non-IFRS Measures
Western uses certain measures in this press release which do not
have any standardized meaning as prescribed by International
Financial Reporting Standards ("IFRS"). These measures, which
are derived from information reported in the condensed consolidated
financial statements, may not be comparable to similar measures
presented by other reporting issuers. These measures have
been described and presented in this press release in order to
provide shareholders and potential investors with additional
information regarding the Company. The Non-IFRS measure used
in this press release is identified and defined as follows:
Adjusted EBITDA
Earnings before interest and finance costs, taxes, depreciation
and amortization, other non-cash items and one-time gains and
losses ("Adjusted EBITDA") is a useful supplemental measure as it
is used by management and other stakeholders, including current and
potential investors, to analyze the Company's principal business
activities. Adjusted EBITDA provides an indication of the
results generated by the Company's principal operating segments,
which assists management in monitoring current and forecasting
future operations, as certain non-core items such as interest and
finance costs, taxes, depreciation and amortization, and other
non-cash items and one-time gains and losses are removed. The
closest IFRS measure would be net loss for consolidated
results.
4
|
Source: Baker Hughes
Company, 2020 Rig Count monthly press releases.
|
5
|
Source: CAODC,
monthly Contractor Summary.
|
The following table provides a reconciliation of net loss, as
disclosed in the condensed consolidated statements of operations
and comprehensive income, to Adjusted EBITDA:
|
|
Three months ended
March 31
|
(stated in
thousands)
|
|
2020
|
2019
|
Net
loss
|
|
(15,331)
|
(7,078)
|
Income tax
recovery
|
|
(5,139)
|
(2,522)
|
Loss before income
taxes
|
|
(20,470)
|
(9,600)
|
Add
(deduct):
|
|
|
|
Depreciation
|
|
12,898
|
16,376
|
Stock based
compensation
|
|
100
|
174
|
Finance
costs
|
|
4,678
|
4,676
|
Other
items
|
|
(345)
|
(378)
|
Impairment of
property and equipment
|
|
11,500
|
-
|
Adjusted
EBITDA
|
|
8,361
|
11,248
|
Defined Terms:
Average active rig count (contract drilling): Calculated
as drilling rig utilization – Billable Days multiplied by the
average number of drilling rigs in the Company's fleet for the
period.
Average active rig count (production services):
Calculated as service rig utilization multiplied by the average
number of service rigs in the Company's fleet for the period.
Billable Days: Defined as Operating Days plus rig
mobilization days.
Drilling rig utilization – Operating Days (or
"Drilling Rig Utilization"): Calculated based on
Operating Days divided by total available days.
Drilling rig utilization – Billable Days:
Calculated based on Billable Days divided by total available
days.
Operating Days: Defined as contract drilling days,
calculated on a spud to rig release basis.
Service Hours: Defined as well servicing hours
completed.
Service rig utilization: Calculated based on
Service Hours divided by available hours, being 10 hours per day,
per well servicing rig, 365 days per year.
Contract Drilling Rig Classifications:
Cardium class rig: Defined as any contract drilling rig
which has a total hookload less than or equal to 399,999 lbs (or
177,999 daN).
Montney class rig:
Defined as any contract drilling rig which has a total hookload
between 400,000 lbs (or 178,000 daN) and 499,999 lbs (or 221,999
daN).
Duvernay class rig:
Defined as any contract drilling rig which has a total hookload
equal to or greater than 500,000 lbs (or 222,000 daN).
Abbreviations:
- Barrel ("bbl");
- Basis point ("bps"): A 1% change equals 100 basis points and a
0.01% change is equal to one basis point;
- Canadian Association of Oilwell Drilling Contractors
("CAODC");
- DecaNewton ("daN");
- International Financial Reporting Standards ("IFRS");
- Pounds ("lbs");
- Thousand cubic feet ("mcf");
- Western Canadian Sedimentary Basin ("WCSB");
- Western Canadian Select ("WCS"); and
- West Texas Intermediate ("WTI").
Forward-Looking Statements and Information
This press
release contains certain statements or disclosures relating to
Western that are based on the expectations of Western as well as
assumptions made by and information currently available to Western
which may constitute forward-looking information under applicable
securities laws. All information and statements contained
herein that are not clearly historical in nature constitute
forward-looking information, and words and phrases such as "may",
"will", "should", "could", "expect", "intend", "anticipate",
"believe", "estimate", "plan", "potential", "continue", "looking
to", or the negative of these terms or other comparable
terminology are generally intended to identify forward-looking
information. Such information represents the Company's
internal projections, estimates or beliefs concerning, among other
things, an outlook on the estimated amounts and timing of additions
to property and equipment, anticipated future debt levels and
revenues or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or
performance. This information involves known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking information.
In particular, forward-looking information in this press release
includes, but is not limited to, statements relating to commodity
pricing; the future demand for and utilization of the Company's
services and equipment, in particular, in light of the ultra-low
commodity price environment associated with the international price
war, coupled with the COVID-19 pandemic; the pricing for the
Company's services and equipment; the terms of existing and
future drilling contracts in Canada and the US and the revenue resulting
therefrom (including the number of Billable Days typically
generated from such contracts and expected expiration dates of such
contracts); the Company's revised expansion and maintenance capital
plans for 2020 and its ability to make changes thereto in response
to customer demands; the Company's liquidity needs including the
ability of current capital resources to cover Western's financial
obligations, working capital requirements and the revised 2020
capital budget; expectations as to the increase in crude oil
transportation capacity through pipeline development; expectations
as to the benefits of the liquefied natural gas expansion in
British Columbia on the Company
and its rig fleet; the future deployment or retirement of rigs and
other existing assets; the potential impact of changes to laws,
governmental and environmental regulations; the expectation of
continued investment in the Canadian crude oil and natural gas
industry; the development of Alberta and British
Columbia resource plays; expectations relating to producer
spending and activity levels for oilfield services; the Company's
approach to management of its budget and operations; the Company's
ability to maintain a competitive advantage to enable it to manage
the current oilfield service environment; and the Company's ability
to find and maintain enough field crew members; and the amount and
timing of purchases of common shares under the Bid.
The material assumptions in making the forward-looking
statements in this press release include, but are not limited to,
assumptions relating to: demand levels and pricing for oilfield
services; demand for crude oil and natural gas and the price and
volatility of crude oil and natural gas; pressures on commodity
pricing; the continued business relationships between the Company
and its significant customers; the Company's competitive advantage;
crude oil transport and pipeline approval and development; the
Company's ability to finance its operations; the effectiveness of
the Company's cost structure and capital budget; the effects of
seasonal and weather conditions on operations and facilities; the
competitive environment to which the various business segments are,
or may be, exposed in all aspects of their business and the
Company's competitive position therein; the ability of the
Company's various business segments to access equipment (including
spare parts and new technologies); assumptions with respect to
global economic conditions and the accuracy of our market outlook
expectations for 2020 and in the future; our expectations regarding
the impacts, direct and indirect, of the COVID-19 pandemic on our
business, customers, business partners, employees, supply chain,
other stakeholders and the overall economy; changes in laws or
regulations; currency exchange fluctuations; the ability of the
Company to attract and retain skilled labour and qualified
management; the ability to retain and attract significant
customers; the ability to maintain a satisfactory safety record;
and general business, economic and market conditions.
Although Western believes that the expectations and assumptions
on which such forward-looking statements and information are based
on are reasonable, undue reliance should not be placed on the
forward-looking statements and information as Western cannot give
any assurance that they will prove to be correct. Since
forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. These include, but are not limited to, the risk that
the ultra-low commodity price environment will be sustained for an
indefinite period, the impact of the COVID-19 pandemic and the
resulting effects on economic conditions, restrictions imposed by
public health authorities or governments, fiscal and monetary
responses by governments and financial institutions and disruptions
to global supply chains and other general industry, economic,
market and business conditions. Readers are cautioned that
the foregoing list of risks, uncertainties and assumptions are not
exhaustive. Additional information on these and other risk
factors that could affect Western's operations and financial
results are discussed under the heading "Risk Factors" in Western's
annual information form for the year ended December 31, 2019 which may be accessed through
the SEDAR website at www.sedar.com. The forward-looking
statements and information contained in this press release are made
as of the date hereof and Western does not undertake any obligation
to update publicly or revise any forward-looking statements and
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
SOURCE Western Energy Services Corp.