/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Nov. 18 /CNW/ - Cathedral Energy Services Income Trust (TSX: CET.UN; the "Trust") is pleased to announce the board of directors of the Trust's Administrator, Cathedral Energy Services Ltd. ("Cathedral"), have approved an updated 2008 capital budget of $51.4 million (previous approved budget was $39.9 million) and a 2009 capital budget of $17.0 million. Included in the 2008 and 2009 capital expenditures are maintenance capital items in the amount of $745,000 and $1,500,000, respectively. The 2008 and 2009 capital expenditures will be financed by way of a combination of the Trust's credit facilities and cash flow from operations.
In summary, the major items within the total 2008 capital budget are: i) 20 Electro-Magnetic Measurement-While-Drilling ("EM-MWD") systems: ii) expansion of the mud motor and collar fleet to accommodate increased directional drilling capacity as well as to reduce rental expense for such equipment; iii) 11 production testing units as well as progress payments on units to be received in 2009; iv) specialty wireline tools; and v) facility acquisition costs. The Trust expects to end 2008 with 98 MWD systems (37 in U.S.), 28 wireline units (5 in U.S.) and 30 production testing units (8 in U.S.).
The major items with the 2009 capital budget are: i) an upgrade of the fleet of EM-MWD systems to our third generation; ii) addition of 11 MWD systems; iii) expansion of the mud motor and collar fleet to accommodate increased directional drilling capabilities; iv) addition of 7 production testing units for the U.S. market; and v) facility renovation costs.
The Trust continues to make progress towards commencing commercial activities in Venezuela. In contemplation of providing services, the Trust is mobilizing directional drilling equipment for operations in Venezuela. The movement of this equipment to Venezuela will bring our investment in facilities and equipment in Venezuela to approximately $7.3 million.
Cathedral's third generation ("G3") EM system has been commercially released. The G3 tool utilizes enhanced formation impedance matching techniques coupled with advanced data encoding and decoding methods that has allowed for substantially improved transmission depth and signal detection. The G3 system has allowed Cathedral to penetrate traditionally non EM markets (i.e. south east Saskatchewan) as well as to enhance performance in traditional markets. The new system not only improves data transmission depths, but also reduces operational costs in a given application over the existing G1/G2 EM systems.
Certain statements in this news release including (i) statements that may contain words such as "anticipate", "could", "expect", "seek", "may" "intend", "will", "believe", "should", "project", "forecast", "plan" and similar expressions, including the negatives thereof, (ii) statements that are based on current expectations and estimates about the markets in which the Trust/Cathedral operates and (iii) statements of belief, intentions and expectations about developments, results and events that will or may occur in the future, constitute "forward-looking statements" and are based on certain assumptions and analysis made by the Trust/Cathedral. Forward-looking statements in this news release include, but are not limited to, statements with respect to future capital expenditures, including the amount, nature and timing thereof; oil and natural gas prices and demand; other development trends within the oil and natural gas industry; business strategy; expansion and growth of the Trust's/Cathedral's business and operations and other such matters. Such forward-looking statements are subject to important risks and uncertainties, which are difficult to predict and that may affect the Trust's/Cathedral's operations, including, but are not limited to: the impact of general economic conditions; industry conditions; government and regulatory developments; oil and natural gas product supply and demand; competition; and the Trust's/Cathedral's ability to attract and retain qualified personnel. The Trust's/Cathedral's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do transpire or occur, what benefits the Trust/Cathedral will derive therefrom. Subject to applicable law, the Trust disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Trust's current Annual Information Form and Annual Report which have been filed with Canadian provincial securities commissions and are available on www.sedar.com.
%SEDAR: 00018316E