CORRE Announces Major Drill Cuttings Treatment Contract in Kuwait
June 19 2014 - 10:25AM
Marketwired
CORRE Announces Major Drill Cuttings Treatment Contract in Kuwait
TORONTO, ONTARIO--(Marketwired - Jun 19, 2014) - Canadian Oil
Recovery and Remediation Enterprises Ltd. (TSX-VENTURE:CVR)
("CORRE" or the "Company") is pleased to announce that SAR AS, the
MENA operating partner of CORRE in SAR-CORRE MENA Limited ("SCM"),
has been awarded a major multi-million dollar contract by the
Kuwait Oil Company ("KOC") to treat oil based mud ("OBM") drill
cuttings ("KOC Contract"). Eighteen companies were approved by KOC
to bid for this drill cuttings treatment project.
The KOC Contract includes the mobilization and construction of a
fully equipped permanent facility to treat 26,000 tons of drill
cuttings per year as specified in the contract. This facility will
be built using the proven drill cuttings treatment technology and
process of SAR's world class facility currently operating in
Averoy, Norway, which has the capacity to treat 50,000 tons of
drill cuttings per year. The treatment capacity of the new facility
can be increased if and when needed. The term of the KOC Contract
is for 5 years with a one-year extension option during which
130,000-156,000 tons of drill cuttings are expected to be treated.
The contract provides a 6 month mobilization period starting July
10th 2014. Accordingly, the permanent facility is expected commence
operations on or before January 10th 2015.
The Company is unable to disclose the total contract amount at
the present time in order to safeguard the confidentiality of its
proprietary processing rate and its bidding prices for similar
ongoing high value drill cuttings contracts in the Gulf. At the
present time, the Company's operating partner is in the process of
bidding for another major onshore drill cuttings treatment
contract, and is also preparing to bid on an equally major drill
cuttings contract located offshore. Notwithstanding this current
limitation for competitive purposes, the Company is able to provide
the following particulars pertaining to the KOC Contract:
- The estimated Capital Expenditures of the KOC Contract are
approximately $8.5 million (45% of which will be CORRE's
proportionate obligation in connection with its ownership interest
in SCM);
- Upon completion of mobilization, a payment in the amount of
$1.65 million will be due to SCM from KOC;
- Based upon Company management's review of contracts awarded in
the MENA and other regions for drill cuttings tenders during the
past 4 years, the estimated range of the service industry average
operating cost under such agreements is between $120 and $275 per
ton and SCM's costs will be within this range. The three primary
factors affecting the actual cost of operators under such
agreements are: a. volume (economies of scale may result in lower
operational costs); b. the technology being employed (for example,
direct thermal desorption, as compared to indirect thermal
desorption); and c. total overhead costs; and
- Though the absolute contract value cannot be disclosed at this
time, the Company is able to confirm that the total revenue payable
under the KOC Contract exceeds $18 million dollars.
"With this contract, our MENA operating partner has positioned
us as one of the primary contractors in the specialized service of
treatment of drill cuttings in the MENA region. This represents a
significant milestone in the development of our oil waste
management and treatment services in the region and in our joint
role with the local national oil companies as advocates for a clean
and safe environment. With SAR as our partner and pre-qualified oil
service provider, we continue to bid for more contracts and to
increase our environmental remediation responsibilities using our
optimized and approved technologies to treat oil-contaminated soil,
recover oil and clean drill cuttings. Furthermore, SAR can now
demonstrate the quality and effectiveness of its drill cuttings
treatment services to KOC, a leading oil company in the Gulf
region," said CORRE's Chairman and CEO John Lorenzo. "Finally, I
would like to thank our shareholders and strategic allies for their
patience and unfailing support."
About CORRE
CORRE is a Canadian-based oil services company which trades on
the TSX Venture Exchange under the symbol CVR. CORRE provides full
cycle oil waste management solutions to the petroleum industry.
CORRE's customers are primarily in the upstream petroleum sector
(oil production and drilling companies) and downstream petroleum
sector (oil refinery, transportation and distribution companies).
CORRE's operating lines include remediating oil-contaminated soil;
treating sludge, oil based muds and drilling waste, oil recovery;
automated oil storage tank cleaning, oil and gas engineering, and
project management. CORRE provides its advanced environmental
solutions through strategic operating partnerships with some of the
most distinguished companies throughout the world.
Forward Looking
Statements
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. In particular, forward-looking information
in this press release includes, but is not limited to, the
potential future value of the KOC Contract, estimated operating
costs and CAPEX and the potential for successfully obtaining
additional contracts via the tendering processes discussed herein.
Although we believe that the expectations reflected in the
forward-looking information are reasonable, there can be no
assurance that such expectations will prove to be correct. We
cannot guarantee future results, performance or achievements.
Consequently, there is no representation that the actual results
achieved will be the same, in whole or in part, as those set out in
the forward-looking information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
commodity price volatility; general economic conditions in Canada,
the United States, the MENA region and globally; industry
conditions, governmental regulation, including environmental
regulation; unanticipated operating events or performance; failure
to obtain industry partner and other third party consents and
approvals, if and when required; the availability of capital on
acceptable terms; the need to obtain required approvals from
regulatory authorities; stock market volatility; competition for,
among other things, capital, skilled personnel and supplies;
changes in laws; and the other risk factors disclosed under our
profile on SEDAR at www.sedar.com. Readers are cautioned that this
list of risk factors should not be construed as
exhaustive.
The forward-looking information contained in this news
release is expressly qualified by this cautionary statement. We
undertake no duty to update any of the forward-looking information
to conform such information to actual results or to changes in our
expectations except as otherwise required by applicable securities
legislation. Readers are cautioned not to place undue reliance on
forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Canadian Oil Recovery and Remediation Enterprises Ltd.John
LorenzoChairman & CEO(416) 368-4027Canadian Oil Recovery and
Remediation Enterprises Ltd.David FreemanCorporate Development(416)
368-4027dfreeman@corre.com
Canadian Oil Recovery an... (TSXV:CVR)
Historical Stock Chart
From May 2024 to Jun 2024
Canadian Oil Recovery an... (TSXV:CVR)
Historical Stock Chart
From Jun 2023 to Jun 2024