UPDATE: Cathedral Energy Services Slumps 15.6%, Hits New Yr Lows As Posts Lower Q4, Declares 2013 Q1 Dividend
Cathedral Energy Services Ltd. (CET.TO), has fallen to a new yr low of $4.00 this afternoon. The company said for the fourth quarter net earnings were $1.56 million ($0.04 per share diluted) as compared to $12.6 million ($0.33 per share diluted) in 2011. The Directors have approved a 2013 Q1 dividend in the amount of $0.075 per share which will have a date of record March 31, 2013 and a payment date of April 15, 2013.
OUTLOOK: "On a year-over-year basis, 2013 overall industry activity levels are expected to remain relatively flat over 2012. Within the Canadian market, industry experts are projecting the oil price differential to narrow in the second half of 2013 which should lead to more dollars in the hands of producer and this may result in increased funding for drilling and completions programs. So far in 2013, industry activity levels in Canada are at lower levels than the prior year. This is expected as the industry did not experience the overall decline in market activity until after the 2012 spring breakup.
"The Company continues to see significant opportunities in the U.S. market for both directional drilling and frac flowback services; in particular in the Texas and Oklahoma regions where the Company's market share is minimal. In late 2012, Cathedral's U.S. Directional Drilling division opened an operations base in Oklahoma City, Oklahoma and for 2013 the Company is expecting to experience an expanding work base from this area. For 2013 Cathedral is planning for increased activity levels from its Texas and Rocky Mountain regions. Despite being in a dry gas market, Cathedral's north east U.S. (Marcellus) area is expected to remain flat from an activity level basis.
"Commencing in January 2013, our U.S. Production Testing division expanded its operations into the Eagleford (Texas) resource play with two units that were relocated from other area within the U.S. As well, the Company has three high pressure units being manufactured for this region and these new builds are expected to be operating in 2013 Q2. As Cathedral pursues and obtains additional work in the U.S. market, it will reallocate equipment where there is demand.
"In 2013 Cathedral will continue to convert its mud motor fleet over to its in-house proprietary design. At the end of 2012 approximately 21% of the fleet had been converted. As part of the conversion process, parts from the motors being torn down are reused when repairing like mud motors. This allows Cathedral to obtain value for such parts. The rate of conversion is dependent on a number of factors including the availability of motor parts manufacturing by third parties and the ability of Cathedral to consume in operations the parts of the mud motors that are being replaced.
"On the technology front, Cathedral anticipates commencing its build out of its MWD "at-bit" technology in 2013 Q4. The "at-bit" technology allows for MWD measurements (inclination and gamma) that are sourced from directly behind the drill bit and this allows for improved geosteering and optimum well placement. As well, in 2013 Cathedral will expand its rollout of the enhanced Fusion MWD platform electronics.
"The Company continues to move forward with the startup of its Venezuela operations. With the near completion of the final agreements and the movement of equipment into the country, Cathedral continues to focus on being prepared for its first field operations."
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