/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/
CALGARY, Feb. 22 /CNW/ - Western Energy Services Corp. ("Western" or the "Company") is pleased to report that recent activity levels for its stimulation services have been strong. The Company's subsidiary StimSol Canada Inc. ("Stimsol") and the Company's Texas stimulation operations have experienced strong demand for their expertise and technology, which is expected to continue as the Company serves the niche market of production optimization through stimulation services.
The Company's legacy businesses of shallow coiled tubing and well testing exposed the Company to the volatile shallow gas and coal bed methane markets as well as the drilling cycle, all of which have experienced a down turn. The Company's new focus on stimulation services is expected to result in less operational volatility and stronger financial results.
Western reports the following progress in the implementation of its new focus on stimulation services:
- Western's acquisition of StimSol has enabled Western to market
proprietary solvent- acid blends and to enter the niche market of
production optimization through stimulation services.
- Western's operations in Texas, having adopted StimSol's technology,
have become a driver for future profitable growth.
- New equipment has been added to both the Canadian and US operations
during the fourth quarter of 2006 and into 2007 including:
- one nitrogen pumper;
- three nitrogen transports;
- four acid pumpers;
- and four acid transports.
- The Company's new facility near Abilene, Texas became operational in
December and serves as the Company's US administration centre and
primary equipment base.
- The Company is in the process of simplifying its business processes
and reducing its general and administrative and operational costs by:
- moving all Canadian well service equipment into StimSol to achieve
operational synergies;
- consolidating the number of operational bases in Alberta from five
to three and in the US from four to two, so that each operational
base has a complete complement of equipment and trained personnel
to ensure quality customer service;
- reducing its general and administrative expenses, staff levels,
and reorganizing and simplifying its business processes; and
- selling certain under-utilized, non-core assets and strategically
reinvesting the capital.
Western's Tool Division continues to expand as indicated by the previously announced contract with Norwood Resources Ltd. Tool rentals in South Texas have increased making a positive contribution to revenues. Management believes the Tool Division will achieve an increase of 75% in revenues for 2007 as compared to 2006, with up to a 35% contribution margin.
The Company expects to report on its annual financial statements and first quarter 2007 results near the end of April 2007.
Western's team is committed to the implementation of Western's new focus on production optimization through stimulation services. Western's management believes that their efforts in 2006 will become evident in 2007 as the experience and focus of the Western team generates improved operational and financial results.
Western is an oil field services company trading on the TSX Venture Exchange in Canada under the symbol "WSV". Western is active in Canada, Texas, and Latin America.
Forward Looking Information
This release contains certain forward-looking statements related but not limited to the Company's expectations, intentions, plans and beliefs. Investment advisors, shareholders and potential investors are cautioned not to place undue reliance on forward-looking information which by its nature involves assumptions, risks and uncertainties, both general and specific, that contribute to the possibilities that predictions, projections, forecasts and future events will not occur. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. The Company does not assume any responsibility to update this information for events subsequent to its preparation.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.