CALGARY, ALBERTA--(Marketwire - July 24, 2012) - Aveda Transportation and Energy Services ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced it has acquired selected assets of 1st Rate Energy Services Inc. ("1st Rate") and a privately owned company controlled by a director of 1st Rate (collectively "Complete Energy Services Inc." or "Complete"). Aveda is predominantly acquiring tanks, matting, light towers and other ancillary equipment and trucking fleets that are expected to significantly increase the Company's oilfield equipment rental fleet.
The Company is acquiring the assets of Complete for a total of approximately $7.5 million in cash. Once fully integrated, Aveda expects the acquisition to add approximately $3.1 million in annual EBITDA.
The Company also announced it is opening a branch in Odessa, TX which will primarily focus on rig moving in the west Texas region. Aveda has also signed a lease on a new Pennsylvania facility that will see its operations in that state move from New Columbia to Williamsport, PA before the end of the year.
"We continue to identify sound opportunities to grow through acquisition, especially on the oilfield rentals side of our business," said Mr. David Werklund, Interim President and CEO of Aveda. "The assets we are acquiring are highly complementary to our existing rentals fleet and will allow us to assist customers with increasingly larger and more complex initiatives. We intend to rapidly integrate and deploy these new assets so that they can begin contributing to our growth in the immediate near term. We also continue to expand our presence in the U.S. in an effort to drive growth in our core rig moving business by locating in close proximity to customers and areas of high drilling activity."
In conjunction with the acquisition the company has finalized an expansion of its existing credit facility to $50 million from $35 million previously. The Company's credit facility is secured by a general security agreement with a first charge on all the Company's assets, bears interest at prime plus 1.25% per annum plus an unused facility fee of 0.25% per annum. The credit facility is due on January 1, 2015. There are no principal payments required on this facility until the due date.
In addition, following a market analysis and consecutive periods of relatively poor financial performance, the Company is electing to close its Melita, MB branch and will allocate its fleet assets between the newly opened Odessa branch and its operations in Nisku, AB. With the redistribution of assets, the Nisku branch will have a greater focus on rig moving activities in the future.
The Company expects transaction costs along with costs of closing the Melita branch, starting up the Odessa branch and reallocating assets and personnel to be in the range of approximately $1.2 million and $2.0 million. Most of these costs will be incurred in the third quarter of 2012. The Company also anticipates increasing its capital expenditure program by $6.0 million in 2012 to facilitate the Odessa expansion and to buy out certain operating leases.
About Aveda Transportation and Energy Services
Aveda provides specialized transportation of products, materials, supplies and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas and Pennsylvania. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.
Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Nisku, AB, Grand Prairie, AB, Mineral Wells, TX, Pleasanton, TX and New Columbia, PA. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.
This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: projected capital expenditures and commitments and the financing thereof; projected transaction costs; projected costs of opening the branch in Odessa, TX; increases in revenue; equipment delivery and deployment dates; geographic allocation of equipment; expectations regarding the Company's ability to raise capital and to increase its equipment fleet; benefits associated with financial results; activity levels; business strategy; successful integration of structural changes; restructuring plans acquisitions. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:
- the performance of Aveda's businesses, including current business and economic trends;
- oil and natural gas commodity prices and production levels;
- the effect of the rebranding on Aveda's businesses;
- capital expenditure programs and other expenditures by Aveda and its customers:
- the ability of Aveda to retain and hire qualified personnel;
- the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
- the ability of Aveda to maintain good working relationships with key suppliers;
- the ability of Aveda to market its services successfully to existing and new customers;
- the ability of Aveda to obtain timely financing on acceptable terms;
- currency exchange and interest rates;
- risks associated with foreign operations;
- changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and
- a stable competitive environment.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2011 (the "MD&A"). Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
This News Release contains the term EBITDA which is defined in the MD&A. EBITDA as presented does not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses EBITDA to analyze the operating performance of the business. EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.
Neither 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.