EANS-News: C.A.T. oil AG 2014-16 investment program of EUR 390 million
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Subtitle: - Capacity increase of EUR 300 million in addition to EUR 90 million
for maintenance
- Significant expansion of operating capacity for all core services: fracturing
by 33%, sidetracking by 55% and drilling by 170% by YE2016 from YE2013
- CEO Manfred Kastner: Building upon the momentum that C.A.T. oil and the
broader industry have enjoyed we will invest a further EUR 300 million to
support our sustainable profitable growth in the upcoming three years.
Strategic management decisions/Investment program
Wien (euro adhoc) - 19 November 2013 - C.A.T. oil AG (O2C, ISIN: AT0000A00Y78),
one of the leading providers of oil and gas field services in Russia and
Kazakhstan, will invest EUR 390 million from 2014 to 2016, EUR 300 million
dedicated to bring on stream new operating capacity and EUR 90 million for
maintenance. The approved investment program suggests that by the end of 2016
operating capacities shall increase by 33% for fracturing, 55% for sidetracking
and 170% for drilling compared to the end of 2013. Through this investment the
Company shall not only materially enhance its operating activities and business
scale but also develop a more balanced service portfolio.
The total investment shall be split between the Company's operating and
re-portable segments as follows: approximately 20% of the total capex will be
allocated to Well Services and around 80% to Drilling, Sidetracking and IPM. The
2014-16 investment program aims at expanding significantly the Company's
business to meet the growing intensity and complexity of customers' up-stream
operating activities.
A favorable product mix development combined with the Company's efficient cost
management should further improve profitability over the period. The Company
will remain focused on its primary offering of fracturing, sidetracking and
drilling services, though might undertake further expansion of its complementary
services such as well completions should Russian producers expedite the
development of tight oil resources in 2014-2016.
Manfred Kastner, C.A.T. oil CEO, commented: "Building upon the momentum that
C.A.T. oil and the broader industry have enjoyed we will invest a further EUR
300 million to support our sustainable profitable growth in the upcoming three
years. We will do so in a very flexible way tailored to the needs and short- to
mid-term production plans of our customers. We have already proven our
competence in rolling out expansion programs efficiently, economically and in a
timely manner several times as witnessed by our successful diversification into
sidetracking services in 2006-08 and drilling operations in 2011-12. Although we
remain primarily adhered to our organic growth strategy, we continue screening
selective M&A opportunities, which emerge from time to time in the Russian
oilfield services market."
The 2014-16 investment program constitutes the next phase of C.A.T. oil's
ambitious expansion strategy and follows the previous two investment cycles: In
2006-08 the Company invested more than EUR 100 million in sidetrack drilling
thus successfully diversifying the Company's service portfolio. With equal
consistency and determination the Company undertook the 2011-12 investment
program of EUR 150 million primarily aimed at expanding into high class
drilling. The Company's total investments in growth, diversification and
maintenance of operating capacities amount to EUR 400 million since its IPO in
2006. Building on the experience gained in the past and positive market
prospects for the Russian oil and gas industry, C.A.T. oil is more than
confident in setting once again the right priorities for the future success and
prosperity of the Company, its shareholders and employees.
The Company will finance its 2014-16 investment program through a combination of
operating cash and long-term debt. Upon C.A.T. oil AG's request, the Company's
majority shareholder CAT. Holding (Cyprus) Limited has ex-pressed its consent to
enlarge and extend until November 2018 the existing committed credit line of EUR
100 million on an arm's length basis thus demonstrating its full commitment
going forward. Despite significant investments in the next three years, C.A.T.
oil foresees modest leverage, staying below its internal guidelines for the
Debt-to-EBITDA ratio of less than 2.0 times.
www.catoilag.com
Press contact:
FTI Consulting
Thomas M. Krammer
Phone: +49 (0)69 92037-183
Email: thomas.krammer@fticonsulting.com
Steffi Fahjen
Phone: +49 (0)69 92037-115
Email: steffi.fahjen@fticonsulting.com
About C.A.T. oil AG:
C.A.T. oil AG is one of the leading independent oil and gas field service
contractors in Russia and Kazakhstan and is listed on the Frankfurt Stock
Exchange (SDAX). C.A.T. oil provides a range of high quality services, which
enable oil and gas producers to extend lifecycle of their fields or bring yet
unexploited oil and gas reserves to production.
Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built up a
leading hydraulic fracturing service, a very effective method of well
stimulation by cracking rock formations with pressurized fluids, in Russia and
Kazakhstan. Following its IPO in 2006, the Company developed a second core
service of sidetrack drilling in 2006-08 and has established a strong presence
in Russia's sidetrack drilling market. Sidetrack drilling is a term used to
describe drilling of a new wellbore from the upper section of an existing well.
In 2011-12, the Company launched the next phase of its growth and
diversification strategy and set up high class drilling operations as a third
core service offering. High class drilling is the classical technology of
drilling vertical, inclined and horizontal wells for extraction of oil and gas.
In total, the Company has already invested more than EUR 400 million in growth
and diversification since its IPO in 2006.
Following the successful set up of high class drilling in 2011-12, C.A.T. oil
introduced its new segment reporting in 2013 clustering its activities in "Well
Services" (fracturing, cementing and completion operations) and "Drilling,
Sidetracking and IPM (Integrated Project Management)".
C.A.T. oil's customer base includes the leading Russian and Kazakh oil and gas
producers such as Gazprom, Rosneft, Lukoil, TNK-BP and KazMunaiGaz. The Company
has long-standing relationships with these customers and has been a reliable
service provider since its market entrance in the early nineties.
C.A.T. oil has its headquarters in Vienna. The Company's H1 2013 weighted
average headcount stood at 2,641 people, most of which are based in Russia and
Kazakhstan.
Disclaimer:
This document contains various forward-looking statements which reflect the
current views of C.A.T. oil's management with respect to certain future events,
performances and financial results. However, future events, performances and
financial results, being per se uncertain and subject to various internal and
external factors, may differ materially from the expectations expressed
explicitly or implicitly in any such forward-looking statements.
Further inquiry note:
Thomas Krammer Tel: +49(0)69-92037-183 Email: thomas.krammer@fticonsulting.com
Steffi Fahjen Tel: +49(0)69-92037-115 Email: steffi.fahjen@fticonsulting.com
end of announcement euro adhoc
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company: C.A.T. oil AG
Kärntner Ring 11-13
A-A-1010 Wien
phone: +43(0) 1 535 23 20 - 0
FAX: +43(0) 1 535 23 20 - 20
mail: ir@catoilag.com
WWW: http://www.catoilag.com
sector: Oil & Gas - Upstream activities
ISIN: AT0000A00Y78
indexes: SDAX, Classic All Share, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt
language: English
