ENSERVCO to Boost Fleet Capacity With $6 Million Capex Budget; Reports 85% Increase in April Revenue Versus Same Month of 2012
DENVER, CO -- (Marketwired) -- 05/16/13 -- ENSERVCO Corporation (OTCQB: ENSV), a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, today said it will invest approximately $6.0 million in capital expenditures during 2013, with $4.7 million being allocated toward new equipment fabrication. The capex budget, which also includes $1.3 million for enhancements to existing equipment, will be funded through internal cash flow.
Management estimates the annualized revenue potential from the new equipment at approximately $10 million. The equipment includes nine frac heating trucks with a total of 12 burner boxes, four hot oilers and two well acidizing trucks. The investments will expand ENSERVCO's (ENSV.PK) frac heating capacity by 40 percent and increase its hot oiling fleet by 15 percent.
"Although we reported record financial results during the two most recent quarters, we were nevertheless constrained by capacity limitations," said Rick Kasch, president. "This fleet expansion will enhance our ability to meet growing customer demand as we head into the busy season this fall."
ENSERVCO also announced that sales during April 2013 reached $3.7 million, up 85% from the same month last year. The improvement was fueled in part by cool spring temperatures across the Company's service territories, as well as sustained demand for fluid heating services, particularly in regions where new hydraulic fracturing techniques require higher water temperatures than traditional frac designs.
Management also commented on the increased trading volume in ENSERVCO's common stock in recent days. "We believe the improved liquidity is at least partially related to our November 2012 private placement. The shares and associated warrants were priced at $0.35 and $0.55, respectively. Given the significant increase in our share price during recent months, we believe it is likely some of the participants in the transaction are recognizing profits." Kasch added that management has not sold any shares subsequent to the November private placement.
Through its various operating subsidiaries, ENSERVCO has emerged as one of the energy service industry's leading providers of hot oiling, acidizing, frac 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 six 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 28, 2013. 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.
Contacts: Pfeiffer High Investor Relations, Inc. Geoff High Phone 303-393-7044 Email: Email Contact Web: www.pfeifferhigh.com MZ Group Derek Gradwell SVP, Natural Resources Phone: 949-259-4995 Email: Email Contact Web: www.mzgroup.com