Click here to close now.

SYS-CON MEDIA Authors: Liz McMillan, Elizabeth White, Lori MacVittie, Carmen Gonzalez, Srinivasan Sundara Rajan

News Feed Item

ENSERVCO Provides Capital Expenditure and Operational Update

DENVER, CO -- (Marketwired) -- 07/10/14 -- ENSERVCO Corporation (NYSE MKT: ENSV)

  • $7 Million Added to 2014 Capex Budget; Full-Year Budget Totals $16 Million
  • Annual Revenue Potential of New Equipment Exceeds $35 Million
  • Company Initiating Acidizing and Hot Oiling Programs with Multiple Customers
  • Management Provides Update on Anticipated Second Quarter Financial Results

ENSERVCO Corporation (NYSE MKT: ENSV), a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, today provided an update on its 2014 capital expenditure plan and recent operational developments.

2014 CAPEX PLAN
ENSERVCO has added $7 million to its previously announced $9 million capital expenditures plan for 2014. The additional investments will go toward the fabrication of eight frac water "mega" heaters, six hot oiling units and two acidizing units. Annual revenue potential from the additional equipment is estimated to be at least $15 million bringing the estimated annual revenue potential for the entire $16 million 2014 capex plan to more than $35 million.

New frac water heating units designed by ENSERVCO during the past year (being referenced to as mega heaters by the Company), double the capacity of ENSERVCO's legacy frac water heating units (previously referred to as "boxes"). The 18 mega heaters planned under the combined 2014 capex program will therefore be equivalent in both heating and revenue potential to 36 of the Company's prior boxes. In addition, the Company anticipates higher operating margins from efficiencies that should be realized in both labor and fuel expenses from the new design.

In summary, the total capex plan should result in a 2014 year-end equipment fleet of (i) the equivalent of 80 legacy frac water heating units, up from 42 at the end of 2013; (ii) 41 hot oiling units, up from 27; and (iii) seven acidizing units, up from three. Six additional hot oil units from the 2014 plan are scheduled for delivery in the first quarter of 2015.

To date, fabrication is on schedule and the Company has begun receiving and deploying its first hot oil and acidizing units. Due to recent limited availability of specialized trucks required to fabricate acidizing units, management has re-allocated a portion of the initial $9 million in capex toward the construction of acidizing docks and related equipment, and reduced to two the number of acidizing units which, as mentioned, have been received. The remaining two units are now included in the second phase of spending.

As previously announced, the first phase of spending is being funded from internal cash flow. Management plans to fund the second phase with bank financing and is currently reviewing term sheets from two leading commercial lenders. Details of the financing and a detailed deployment schedule for the equipment will be presented during the Company's second quarter earnings announcement in mid-August.

"The decision to increase our capital investments was based on detailed discussions with customers about their expanding service needs and our expansion into new markets," said Rick Kasch, president and CEO. "Much of this demand is for non-seasonal well maintenance work. In recent weeks, we have been commissioned by multiple customers to initiate ongoing well acidizing and hot oiling programs in both our Rocky Mountain service region and in Texas. This work was previously performed by other service providers, and represents an expansion of our market share in very active oil and gas fields."

Kasch added, "These programs, which should represent several million dollars in additional annual revenue, include regular acidizing of more than 1,000 wells for multiple customers operating in central Wyoming's CO2 flood fields. In addition, later in the third quarter, we expect to commence acidizing programs for three companies in the Texas Panhandle region. This year-round work should lead to a strong improvement in our third quarter financial results versus the third quarter last year."

SECOND QUARTER OPERATIONS
The second quarter has historically been one of the Company's two slowest due to the wind down of the seasonal frac water heating work. The Company indicated that despite an almost $1 million increase in second quarter hot oiling revenues versus last year's second quarter, total revenue is expected to be approximately $600,000 below the $7.9 million reported in its 2013 second quarter. The anticipated decline is principally due to a three-week halt in frac water heating for a large customer in the DJ Basin. The stoppage resulted from a well-site accident on a frac job for which ENSERVCO was heating water. The accident triggered an incident review and evaluation of ENSERVCO's safety procedures in the DJ Basin by the customer. The incident analysis determined the accident resulted from the failure of a component on another service provider's equipment. Once the customer's safety evaluation was completed, ENSERVCO was cleared to restart services. However, by the time clearance was obtained, the heating season had slowed significantly and the lost revenue could not be recovered.

Kasch said the Company expects to report a second quarter operating loss of approximately $1 million versus operating income of $550,000 in the same quarter last year. The anticipated decline is due to (i) the reduction in revenue mentioned above; (ii) the addition of safety coordinators during 2013 at each of the Company's locations as a part its commitment to high safety standards; (iii) higher maintenance and repair costs associated with the Company's expanded service fleet; and (iv) the labor costs incurred in retaining the crews waiting for the re-start of activity with the aforementioned large DJ Basin customer.

About ENSERVCO
Through its various operating subsidiaries, ENSERVCO has emerged as one of the energy service industry's leading providers of hot oiling, acidizing, frac-water heating and fluid management services. The Company owns and operates a fleet of more than 230 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO serves customers in seven major domestic oil and gas fields, and operates in Colorado, Kansas, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia. Additional information is available at www.enservco.com.

Cautionary Note Regarding Forward-Looking Statements
This news release contains information that is "forward-looking" in that it describes events and conditions ENSERVCO reasonably expects to occur in the future. Expectations for the future performance of ENSERVCO are dependent upon a number of factors, and there can be no assurance that ENSERVCO will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond ENSERVCO's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in a Form 10-K filed on March 20, 2014. It is important that each person reviewing this release understand the significant risks attendant to the operations of ENSERVCO. ENSERVCO disclaims any obligation to update any forward-looking statement made herein.

Contact:
Geoff High
Pfeiffer High Investor Relations, Inc.
Phone 303-393-7044
Email: Email Contact
Web: www.pfeifferhigh.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that QTS Realty Trust, one of the nation’s largest and fastest-growing providers of data center facilities and cloud services and a leader in security and compliance, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. QTS Realty Trust, Inc. (NYSE: QTS) is a leading national provider of data center solutions and fully managed services, and a leader in security and compliance...
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things...
SYS-CON Events announced today that IndependenceIT, a leading software provider of simplified IT management solutions for workspaces, applications and desktops-as-a-service, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IndependenceIT's Cloud Workspace® Suite combines application, end-user and infrastructure management into a seamless, easy-to-manage platform, with a unified management interface an...
GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools. Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabili...
SOASTA, the leader in performance analytics, today reported record growth of the CloudTest community, exceeding 30,000 registered users of the CloudTest platform in Q1 2015. SOASTA also announced widespread adoption of its Web and mobile testing solutions, with more than 1,600 customers completing more than 285,000 tests using CloudTest during the quarter. This rapid growth shows that DevOps-driven digital businesses are embracing a more continuous approach to testing, and CloudTest is meeting t...
SYS-CON Events announced today that that Innodisk, the service-driven provider of industrial embedded flash and DRAM storage products and technologies, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies. With satisfied customers across the embedded, aerospace and defense, cloud storage markets an...
SYS-CON Events announced today that WSM International (WSM), the world’s leading cloud and server migration services provider, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. WSM is a solutions integrator with a core focus on cloud and server migration, transformation and DevOps services.
VoxImplant has announced full WebRTC support in the newest versions of its Android SDK and iOS SDK. The updated SDKs, which enable audio and video calls on mobile devices, are now compatible with the WebRTC standard to allow any mobile app to communicate with WebRTC-enabled browsers, including Google Chrome, Mozilla Firefox, Opera, and, when available, Microsoft Spartan. The WebRTC-updated SDKs represent VoxImplant's continued leadership in simplifying the development of real-time communication...
SYS-CON Events announced today that Site24x7, the cloud infrastructure monitoring service, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Site24x7 is a cloud infrastructure monitoring service that helps monitor the uptime and performance of websites, online applications, servers, mobile websites and custom APIs. The monitoring is done from 50+ locations across the world and from various wireless carr...
Today, IT is not just a cost center. IT is an enabler and driver of business. With the emergence of the hybrid cloud paradigm, IT now has increasingly more capabilities to create new strategic opportunities for a business. Hybrid cloud allows an organization to utilize multi-tenant public clouds, dedicated private clouds, bare metal hosting, and the associated support and services for the right use cases through an on-demand, XaaS model. This model of IT creates tremendous opportunities for busi...
SYS-CON Events announced today that Intelligent Systems Services will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Established in 1994, Intelligent Systems Services Inc. is located near Washington, DC, with representatives and partners nationwide. ISS’s well-established track record is based on the continuous pursuit of excellence in designing, implementing and supporting nationwide clients’ mission-cri...
SYS-CON Events announced today that B2Cloud, a provider of enterprise resource planning software, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. B2cloud develops the software you need. They have the ideal tools to help you work with your clients. B2Cloud’s main solutions include AGIS – ERP, CLOHC, AGIS – Invoice, and IZUM
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that Tufin, the market-leading provider of Security Policy Orchestration Solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. As the market leader of Security Policy Orchestration, Tufin automates and accelerates network configuration changes while maintaining security and compliance. Tufin's award-winning Orchestration Suite™ gives IT organizations the power and a...
“With easy-to-use SDKs for Atmel’s platforms, IoT developers can now reap the benefits of realtime communication, and bypass the security pitfalls and configuration complexities that put IoT deployments at risk,” said Todd Greene, founder & CEO of PubNub. PubNub will team with Atmel at CES 2015 to launch full SDK support for Atmel’s MCU, MPU, and Wireless SoC platforms. Atmel developers now have access to PubNub’s secure Publish/Subscribe messaging with guaranteed ¼ second latencies across PubN...