Total Energy Services Inc. Announces Preliminary 2016 Capital Expenditure Budget
CALGARY, ALBERTA--(Marketwired - Jan. 15, 2016) - Total Energy Services Inc. ("Total" or the "Company") (TSX:TOT) announces its preliminary 2016 capital expenditure budget of $12.1 million. Included in this budget is $3.9 million (US $2.75 million) for the purchase of the operating assets of a United States oilfield equipment rental company, $3.0 million for expansion of the natural gas compression rental fleet, $2.2 million for the purchase of equipment for continued growth within the Compression and Process Services division and $3.0 million for maintenance capital expenditures. Total has no capital commitments from 2015 that will carry into 2016.
The rental acquisition consists of a complementary oilfield surface equipment rental business that will be integrated into the Company's Rentals and Transportation Services division's existing United States operations effective January 1, 2016. For 2015, such acquired business generated approximately $2.7 million (US $1.9 million) of earnings before interest, taxes, depreciation and amortization.
The $3.0 million budget for expansion of the natural gas compression rental fleet is not currently committed to be spent. Consistent with past practice, any additions to the Company's compression rental fleet are conditional on the receipt of satisfactory rental orders that cannot be filled utilizing the Company's existing rental fleet.
Total intends to finance the capital expenditures detailed above with cash on hand and cash flow from operations. The Company's $65 million credit facility is currently undrawn. Total's strong financial position, disciplined dividend policy and minimal capital expenditure commitments position the Company well as the North American energy services industry enters what is expected to be a very challenging year.
Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
(January 15, 2016 - 2:23 PM EST)
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