|By PR Newswire||
|January 20, 2014 04:51 PM EST||
OKOTOKS, AB, Jan. 20, 2014 /PRNewswire/ - (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".
SOURCE Mullen Group Ltd.