CALGARY, ALBERTA--(Marketwired - Feb. 25, 2016) - Western Energy Services Corp. ("Western" or the "Company") (TSX:WRG) announces the release of its fourth quarter and year end 2015 financial and operating results and the suspension of its quarterly dividend. Additional information relating to the Company, including the Company's financial statements and management's discussion and analysis as at and for years ended December 31, 2015 and 2014 will be available on SEDAR at www.sedar.com. Non-International Financial Reporting Standards ("Non-IFRS") measures and abbreviations for standard industry terms are included in this press release. All amounts are denominated in Canadian dollars (CDN$) unless otherwise identified.
Fourth Quarter 2015 Operating Results:
Year to Date Operating Results:
Dividend Suspension
Given the current commodity price environment and limited visibility for oilfield service activity, the Board of Directors has suspended the Company's quarterly dividend until further notice. This reduction will allow Western to preserve its liquidity while providing the Company with the financial flexibility to pursue further growth opportunities.
Selected Financial Information | |||||||||||||
(stated in thousands, except share and per share amounts) | |||||||||||||
Three months ended December 31 | Year ended December 31 | ||||||||||||
Financial Highlights | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||
Revenue | 42,678 | 139,210 | (69 | %) | 227,524 | 507,832 | (55 | %) | |||||
Operating Revenue(1) | 40,458 | 129,181 | (69 | %) | 216,485 | 474,120 | (54 | %) | |||||
Gross Margin(1) | 13,372 | 57,826 | (77 | %) | 85,951 | 207,231 | (59 | %) | |||||
Gross Margin as a percentage of Operating Revenue | 33 | % | 45 | % | (27 | %) | 40 | % | 44 | % | (9 | %) | |
Adjusted EBITDA(1) | 7,573 | 50,419 | (85 | %) | 60,545 | 176,777 | (66 | %) | |||||
Adjusted EBITDA as a percentage of Operating Revenue | 19 | % | 39 | % | (51 | %) | 28 | % | 37 | % | (24 | %) | |
Cash flow from operating activities | 11,139 | 47,830 | (77 | %) | 90,955 | 181,351 | (50 | %) | |||||
Capital expenditures | 3,259 | 31,071 | (90 | %) | 33,562 | 108,604 | (69 | %) | |||||
Net income (loss) | (55,010 | ) | (8,164 | ) | 574 | % | (129,139 | ) | 36,450 | (454 | %) | ||
-basic net income (loss) per share | (0.75 | ) | (0.11 | ) | 582 | % | (1.74 | ) | 0.49 | (455 | %) | ||
-diluted net income (loss) per share | (0.75 | ) | (0.11 | ) | 582 | % | (1.74 | ) | 0.48 | (463 | %) | ||
Weighted average number of shares | |||||||||||||
-basic | 73,655,198 | 74,882,690 | (2 | %) | 74,238,320 | 74,396,701 | - | ||||||
-diluted | 73,655,198 | 74,927,714 | (2 | %) | 74,238,320 | 75,427,149 | (2 | %) | |||||
Outstanding common shares as at period end | 73,646,292 | 74,866,028 | (2 | %) | 73,646,292 | 74,886,028 | (2 | %) | |||||
Dividends declared | 3,682 | 5,614 | (34 | %) | 20,392 | 22,376 | (9 | %) |
(1) | See "Non-IFRS measures" included in this press release. |
Three months ended December 31 | Year ended December 31 | ||||||||||||
Operating Highlights | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||
Contract Drilling | |||||||||||||
Canadian Operations: | |||||||||||||
Contract drilling rig fleet: | |||||||||||||
-Average | 52 | 50 | 4 | % | 50 | 49 | 2 | % | |||||
-End of period | 52 | 49 | 6 | % | 52 | 49 | 6 | % | |||||
Operating Revenue per Revenue Day(1) | 22,038 | 27,104 | (19 | %) | 23,458 | 26,178 | (10 | %) | |||||
Operating Revenue per Operating Day(1) | 24,228 | 29,710 | (18 | %) | 25,821 | 28,699 | (10 | %) | |||||
Operating Days(1) | 955 | 2,724 | (65 | %) | 4,748 | 10,478 | (55 | %) | |||||
Drilling rig utilization - Revenue Days(1) | 22 | % | 65 | % | (66 | %) | 29 | % | 64 | % | (55 | %) | |
Drilling rig utilization - Operating Days(1) | 20 | % | 59 | % | (66 | %) | 26 | % | 58 | % | (55 | %) | |
CAODC industry average utilization(1)(2) | 20 | % | 45 | % | (56 | %) | 23 | % | 44 | % | (48 | %) | |
United States Operations: | |||||||||||||
Contract drilling rig fleet: | |||||||||||||
-Average | 5 | 5 | - | 5 | 5 | - | |||||||
-End of period | 5 | 5 | - | 5 | 5 | - | |||||||
Operating Revenue per Revenue Day (US$)(1) | 31,350 | 28,309 | 11 | % | 29,483(3) | 26,124 | 13 | % | |||||
Operating Revenue per Operating Day (US$)(1) | 34,217 | 31,876 | 7 | % | 33,166(3) | 29,680 | 12 | % | |||||
Operating Days(1) | 84 | 385 | (78 | %) | 526 | 1,506 | (65 | %) | |||||
Drilling rig utilization - Revenue Days(1) | 20 | % | 95 | % | (79 | %) | 32 | % | 94 | % | (66 | %) | |
Drilling rig utilization - Operating Days(1) | 18 | % | 85 | % | (79 | %) | 29 | % | 83 | % | (65 | %) | |
Production Services | |||||||||||||
Well servicing rig fleet: | |||||||||||||
-Average | 66 | 65 | 2 | % | 66 | 65 | 2 | % | |||||
-End of period | 66 | 65 | 2 | % | 66 | 65 | 2 | % | |||||
Service Rig Operating Revenue per Service Hour(1) | 703 | 837 | (16 | %) | 779 | 817 | (5 | %) | |||||
Service Hours | 15,352 | 34,456 | (55 | %) | 71,225 | 127,768 | (44 | %) | |||||
Service rig utilization(1) | 25 | % | 58 | % | (57 | %) | 30 | % | 54 | % | (44 | %) |
(1) | See "Non-IFRS measures" included in this press release. |
(2) | Source: The Canadian Association of Oilwell Drilling Contractors ("CAODC"). The CAODC industry average is based on Operating Days divided by total available days. |
(3) | Excludes shortfall commitment and standby revenue from take or pay contracts of US$4.5 million for the year ended December 31, 2015. |
Financial Position at (stated in thousands) | December 31, 2015 | December 31, 2014 | Change | |
Working capital | 70,679 | 78,336 | (10 | %) |
Property and equipment | 773,647 | 827,306 | (6 | %) |
Total assets | 876,608 | 1,057,118 | (17 | %) |
Long term debt | 264,155 | 264,165 | - |
Western is an oilfield service company focused on three core business lines: contract drilling, well servicing and oilfield rental equipment services. Western provides contract drilling services through its division, Horizon Drilling ("Horizon") in Canada, and its wholly owned subsidiary, Stoneham Drilling Corporation ("Stoneham"), in the United States ("US"). On December 28, 2015, Western wound up its partnership, Western Energy Services Partnership (the "Partnership") and rolled all of the Partnership's assets into IROC Drilling and Production Services Corp., which then changed its name to Western Production Services Corp. ("Western Production Services"). As a result, Western now provides well servicing operations in Canada through Western Production Services' division, Eagle Well Servicing ("Eagle") and oilfield rental equipment services in Canada through Western Production Services' division, Aero Rental Services ("Aero"). Financial and operating results for Horizon and Stoneham are included in Western's contract drilling segment, while Eagle and Aero's financial and operating results are included in Western's production services segment.
Western currently has a drilling rig fleet of 57 rigs specifically suited for drilling horizontal wells of increased complexity. Western is the sixth largest drilling contractor in Canada with a fleet of 52 rigs operating through Horizon. Of the Canadian fleet, 25 are classified as Cardium rigs, 19 as Montney rigs and eight as Duvernay rigs. As compared to the Cardium classified rigs, the Montney class rigs have a larger hookload, while the Duvernay class rigs have the largest hookload. Additionally, Western has five Duvernay class triple drilling rigs deployed in the United States operating through Stoneham. Western is also the fourth largest well servicing company in Canada with a fleet of 66 rigs operating through Eagle. Western's oilfield rental equipment division, which operates through Aero, provides oilfield rental equipment for frac services, well completions and production work, coil tubing and drilling services.
Crude oil and natural gas prices impact the cash flow of Western's customers, which in turn impacts the demand for Western's services. Overall performance of the Company was affected by the decline in crude oil and natural gas prices throughout 2015. While crude oil prices were strong in the first six months of 2014, they weakened significantly in the last half of 2014 and continued to weaken in 2015. Partially offsetting the decline in crude oil and natural gas prices for Western's Canadian customers was the strengthening of the US dollar in comparison to the Canadian dollar. The following table summarizes the average oil and natural gas prices, as well as the average foreign exchange rates for the three months ended December 31, 2015 and 2014 and for the years ended December 31, 2015 and 2014.
Three months ended December 31 | Year ended December 31 | |||||||
2015 | 2014 | Change | 2015 | 2014 | Change | |||
Average oil and natural gas prices(1) | ||||||||
Oil | ||||||||
West Texas Intermediate (US$/bbl) | 42.18 | 73.15 | (42 | %) | 48.80 | 93.00 | (48 | %) |
Western Canadian Select (CDN$/bbl) | 36.86 | 65.30 | (44 | %) | 44.83 | 82.04 | (45 | %) |
Natural Gas | ||||||||
30 day Spot AECO (CDN$/mcf) | 2.48 | 3.62 | (32 | %) | 2.71 | 4.50 | (40 | %) |
Average foreign exchange rates | ||||||||
US dollar to Canadian dollar | 1.34 | 1.14 | 18 | % | 1.28 | 1.10 | 16 | % |
(1) | See "Abbreviations" included in this press release. |
The significant reduction in commodity prices has resulted in a corresponding decrease in the demand for oilfield services in both Canada and the United States. The CAODC reported that for drilling in Canada, the total number of Operating Days in the WCSB decreased approximately 50% for the year ended December 31, 2015, as compared to 2014. Similarly, as reported by Baker Hughes Incorporated, the number of active drilling rigs in the United States decreased approximately 47% in 2015 as compared to 2014. Well servicing hours were also impacted by the decline in demand, as the CAODC reported that Service Hours in the WCSB decreased approximately 40% in 2015, as compared to the prior year.
Outlook
Currently, 7 of Western's 57 drilling rigs (or 12%) are operating under long term take-or-pay contracts providing a base level of future revenue, with 4 of these contracts expected to expire in 2016 and 3 expected to expire in 2017. These contracts each typically generate between 250 and 350 Revenue Days per year.
Western's revised capital budget for 2016 is expected to total $7 million and is comprised of $2 million of expansion capital and $5 million of maintenance capital. The following table summarizes the capital spending incurred in 2015 and the revised 2016 capital budget:
Capital Expenditures (stated in millions) |
Revised 2015 Budget Announced October 29, 2015 |
Capital Expenditures Year Ended December 31, 2015 |
Cancellations 2015 |
Carry Forward Capital Spending 2016 |
2016 Budget Announced December 16, 2015 |
Cancellations 2016 |
Revised 2016 Budget Announced February 25, 2016 |
|||
Expansion | 23 | (23 | ) | - | - | 6 | (4 | ) | 2 | |
Maintenance | 15 | (11 | ) | (4 | ) | - | 12 | (7 | ) | 5 |
Total Capital Expenditures | 38 | (34 | ) | (4 | ) | - | 18 | (11 | ) | 7 |
Capital spending in 2015 totalled $34 million, a decrease from the previously announced revised 2015 capital budget of $38 million as an additional $4 million in maintenance capital expenditures were cancelled in the fourth quarter of 2015, due to the decrease in oilfield service activity. No capital from the revised 2015 budget was carried forward into 2016. The initial 2016 capital budget of $18 million announced in the fourth quarter of 2015 has been reduced by $11 million and now totals $7 million, comprised of $2 million of expansion capital and $5 million of maintenance capital. Expansion capital in the revised 2016 budget relates to additional oilfield rental equipment. Maintenance capital includes $3 million in the contract drilling segment and $2 million in the production services segment.
Western believes the revised 2016 capital budget provides a prudent use of cash resources and will allow it to maintain its balance sheet strength in the current market conditions. This budget also demonstrates the Company's commitment to maintaining Western's premier drilling and well servicing rig fleets, while remaining responsive to customer requirements, and expanding Western's strategic presence in the oilfield rental equipment market. Western will continue to manage its operations in a disciplined manner and make any required adjustments to its capital program as customer demand changes.
Subsequent to December 31, 2015, crude oil and natural gas prices have continued to deteriorate to levels not seen in over a decade. This continued pressure on commodity prices has resulted in continued year-over-year reductions to the capital spending plans for the majority of Western's customers. In many cases, the capital spending reductions have been significant. As a result, active drilling rig counts in both Canada and the United States are expected to be at or near 30 year lows in 2016. Activity levels throughout the oilfield service industry in the first quarter of 2016 are expected to be significantly lower as compared to the same period in the prior year, when the effect of the lower commodity price environment had not fully impacted Western's activity levels and pricing. Lower activity and pricing pressure will continue to impact Western's Adjusted EBITDA and cash flow from operating activities. Western's variable cost structure, under which approximately 80% of operating and administrative costs are variable, the suspension of the Company's quarterly dividend and a prudent capital budget will aid in preserving balance sheet strength. Within the current market, the Company's objective is to manage expenses within cash flow from operating activities. At December 31, 2015, Western's Net Debt to trailing 12 month Adjusted EBITDA ratio was 3.4. In addition to $58.4 million in cash and cash equivalents at December 31, 2015, Western has $175 million undrawn on the Company's revolving credit facility (the "Revolving Facility"), which does not mature until December 17, 2018, $20 million available on the Company's operating demand revolving loan (the "Operating Facility"), and no principal repayments due on the $265 million Senior Notes until they mature on January 30, 2019.
The Company's credit facilities contain certain financial covenants including an interest coverage ratio of 2.0 to 1.0 or greater. At December 31, 2015, the Company's interest coverage ratio was 2.8 to 1.0. The continued deterioration of the commodity price environment subsequent to year end and the corresponding impact on the demand for oilfield services activity has caused a number of oilfield service companies to seek covenant relief from their lenders. Western's interest coverage ratio is sensitive to the prolonged decline in oilfield services activity and failing to comply with this covenant could lead to restrictions on the Company's ability to access its credit facility in the future. At December 31, 2015, Western is in compliance with all debt covenants; however, due to estimates that oilfield services activity will remain low throughout 2016, Western is in discussions with its banking syndicate for relief to the existing banking covenants. Currently, there is no risk of a cross default with the Company's Senior Notes as the credit facility remains undrawn. In addition to suspending the Company's quarterly dividend and reducing capital spending to preserve balance sheet strength, the Company has taken a proactive approach to reducing administrative and fixed overhead costs including reducing fixed headcount since the beginning of 2015 by a third and implementing a 10% company-wide wage rollback to salaried employees and director's fees, as well as reducing various other office related costs. Oilfield service activity in Canada will be impacted by the development of resource plays in Alberta and northeast British Columbia including those related to liquefied natural gas projects, increased crude oil transportation capacity through rail and pipeline development and foreign investment into Canada. Currently, the largest challenge facing the oilfield service industry is customer spending constraints as a result of lower commodity prices. Western's view is that its modern drilling and well servicing rig fleets, strong customer base, reputation, and disciplined cash management provide a competitive advantage which will enable the Company to manage through the current slowdown in oilfield services activity.
Advance Notice Requirement For Nominating Directors
Western's board of directors approved the adoption of amended & restated by-laws of the Company (the "A&R By-laws") which, among other things, increase the quorum requirement for shareholder meetings to 25% of the outstanding shares from 5%, generally modernize the by-laws and include an advance notice requirement (the "Advance Notice Requirement") for shareholders who want to nominate a person or persons for election as a director of the Company other than the management director nominees, and other than pursuant to a requisition of a meeting or a shareholder proposal made pursuant to the provisions of the Business Corporations Act (Alberta). The purpose of the Advance Notice Requirement is to, among other things, set a deadline of 30 days by which shareholders must notify the Company in writing of an intention to nominate directors prior to any meeting of shareholders at which directors are to be elected, and prescribe the information regarding their nominees that must be included in the notice for it to be valid. The Advance Notice Requirement is similar to that adopted by many other TSX-listed issuers in the last few years and is in accordance with the guidelines prescribed by Institutional Shareholder Services or ISS. The A&R By-laws are effective immediately and will be subject to shareholder confirmation at the annual meeting of shareholders to be held on May 9, 2016. A copy of the A&R By-laws has been filed and is available under the Company's profile at www.sedar.com.
Non-IFRS Measures
Western uses certain measures in this press release which do not have any standardized meaning as prescribed by International Financial Reporting Standards ("IFRS"). These measures which are derived from information reported in the consolidated financial statements may not be comparable to similar measures presented by other reporting issuers. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company. These Non-IFRS measures are identified and defined as follows:
Operating Revenue Management believes that in addition to revenue, Operating Revenue is a useful supplemental measure as it provides an indication of the revenue generated by Western's principal operating activities, excluding flow through third party charges such as rig fuel, which at the customer's request may be paid for initially by Western, then recharged in its entirety to Western's customers.
Gross Margin
Management believes that in addition to net income, Gross Margin is a useful supplemental measure as it provides an indication of the results generated by Western's principal operating activities prior to considering administrative expenses, depreciation and amortization, how those activities are financed, the impact of foreign exchange, how the results are taxed, how funds are invested, and how non-cash items and one-time gains and losses affect results.
The following table provides a reconciliation of revenue under IFRS, as disclosed in the consolidated statements of operations and comprehensive income, to Operating Revenue and Gross Margin:
Three months ended December 31 | Year ended December 31 | ||||||||
(stated in thousands) | 2015 | 2014 | 2015 | 2014 | |||||
Operating Revenue | |||||||||
Drilling | 26,978 | 94,877 | 150,252 | 350,105 | |||||
Production Services | 13,525 | 34,447 | 66,550 | 125,404 | |||||
Less: inter-company eliminations | (45 | ) | (143 | ) | (317 | ) | (1,389 | ) | |
40,458 | 129,181 | 216,485 | 474,120 | ||||||
Third party charges | 2,220 | 10,029 | 11,039 | 33,712 | |||||
Revenue | 42,678 | 139,210 | 227,524 | 507,832 | |||||
Less: operating expenses | (37,974 | ) | (98,524 | ) | (179,843 | ) | (363,603 | ) | |
Add: | |||||||||
Depreciation - operating | 8,433 | 16,740 | 37,473 | 61,991 | |||||
Stock based compensation - operating | 235 | 400 | 797 | 1,011 | |||||
Gross Margin | 13,372 | 57,826 | 85,951 | 207,231 |
Adjusted EBITDA
Management believes that in addition to net income, earnings before interest and finance costs, taxes, depreciation and amortization, other non-cash items and one-time gains and losses ("Adjusted EBITDA") is a useful supplemental measure as it provides an indication of the results generated by the Company's principal operating segments similar to Gross Margin but also factors in the cash administrative expenses incurred in the period.
Operating Earnings
Management believes that in addition to net income, Operating Earnings is a useful supplemental measure as it provides an indication of the results generated by the Company's principal operating segments similar to Adjusted EBITDA but also factors in the depreciation expense incurred in the period.
The following table provides a reconciliation of net income under IFRS, as disclosed in the consolidated statements of operations and comprehensive income, to earnings before interest and finance costs, taxes and depreciation and amortization ("EBITDA"), Adjusted EBITDA and Operating Earnings:
Three months ended December 31 | Year ended December 31 | ||||||||
(stated in thousands) | 2015 | 2014 | 2015 | 2014 | |||||
Net income (loss) | (55,010 | ) | (8,164 | ) | (129,139 | ) | 36,450 | ||
Add: | |||||||||
Finance costs | 5,412 | 4,897 | 20,441 | 20,782 | |||||
Income taxes | (21,273 | ) | 5,784 | (12,548 | ) | 22,311 | |||
Depreciation - operating | 8,433 | 16,740 | 37,473 | 61,991 | |||||
Depreciation - administrative | 616 | 444 | 1,994 | 1,776 | |||||
EBITDA | (61,822 | ) | 19,701 | (81,779 | ) | 143,310 | |||
Add: | |||||||||
Stock based compensation - operating | 235 | 400 | 797 | 1,011 | |||||
Stock based compensation - administrative | 921 | 1,073 | 3,520 | 2,827 | |||||
Loss on asset decommissioning | 26,598 | 7,247 | 26,598 | 7,247 | |||||
Impairment loss on property and equipment | 41,862 | - | 41,862 | - | |||||
Impairment loss on goodwill | - | 22,668 | 71,256 | 22,668 | |||||
Other items | (221 | ) | (670 | ) | (1,709 | ) | (286 | ) | |
Adjusted EBITDA | 7,573 | 50,419 | 60,545 | 176,777 | |||||
Subtract: | |||||||||
Depreciation - operating | (8,433 | ) | (16,740 | ) | (37,473 | ) | (61,991 | ) | |
Depreciation - administrative | (616 | ) | (444 | ) | (1,994 | ) | (1,776 | ) | |
Operating Earnings (loss) | (1,476 | ) | 33,235 | 21,078 | 113,010 |
Net Debt
The following table provides a reconciliation of long term debt under IFRS, as disclosed in the condensed consolidated balance sheets to Net Debt:
(stated in thousands) | December 31, 2015 | December 31, 2014 | ||
Long term debt | 264,155 | 264,165 | ||
Current portion of long term debt | 761 | 1,062 | ||
Less cash and cash equivalents | (59,445 | ) | (62,662 | ) |
Net Debt | 206,471 | 202,565 |
Drilling rig utilization - Operating Days: Calculated based on Operating Days divided by total available days.
Drilling rig utilization - Revenue Days: Calculated based on Revenue Days divided by total available days.
Operating Days: Defined as contract drilling days, calculated on a spud to rig release basis.
Revenue Days: Defined as Operating Days plus rig mobilization days.
Service Hours: Defined as well servicing hours completed.
Service rig utilization: Calculated based on Service Hours divided by available hours, being 10 hours per day, per well servicing rig, 365 days per year.
Contract Drilling Rig Classifications
Cardium class rig: Defined as any contract drilling rig which has a total hookload of less than or equal to 399,999 lbs (or 177,999 daN).
Montney class rig: Defined as any contract drilling rig which has a total hookload between 400,000 lbs (or 178,000 daN) and 499,999 lbs (or 221,999 daN).
Duvernay class rig: Defined as any contract drilling rig which has a total hookload equal to or greater than 500,000 lbs (or 222,000 daN).
Abbreviations:
2015 Fourth Quarter Results Conference Call and Webcast
Western has scheduled a conference call and webcast to begin at 10:00 a.m. MST (12:00 p.m. EST) on Friday, February 26, 2016.
The conference call dial-in number is 1-866-223-7781.
A live webcast of the conference call will be accessible on Western's website at www.wesc.ca by selecting "Investors", then "Webcasts". Shortly after the live webcast, an archived version will be available for approximately 14 days.
An archived recording of the conference call will also be available approximately one hour after the completion of the call until March 11, 2016 by dialing 1-800-408-3053 or 905-694-9451, passcode 5548245.
Forward-Looking Statements and Information
This press release contains certain statements or disclosures relating to Western that are based on the expectations of Western as well as assumptions made by and information currently available to Western which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Western anticipates or expects may, or will occur in the future (in whole or part) should be considered forward-looking information. In some cases forward-looking information can be identified by terms such as "forecast", "future," "may", "will", "expect", "anticipate,", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro forma", or other comparable terminology.
In particular, forward-looking information in this press release includes, but is not limited to, statements relating to the declaration of dividends; the future demand for the Company's services and equipment; the terms of existing and future drilling contracts in Canada and the US and the revenues resulting therefrom (including the number of Operating Days typically generated from the Company's contracts); the Company's expansion and maintenance capital plans for 2016, including the ability of current capital resources to cover Western's financial obligations and the 2016 capital budget; the Company's expected sources of funding to support such capital plans and the Company's ability to adjust capital spending for the remainder of 2016 if market conditions continue to change; the use and availability of the Company's credit facilities; expectations as to the increase in crude oil transportation capacity through rail and pipeline development; expectations as to the necessary approvals for liquefied natural gas projects being obtained; the expectation of continued foreign investment into the Canadian oilfield industry; and the expectation that producer spending constraints will continue to be a large challenge facing the Company in 2016.
The material assumptions in making the forward-looking statements in this press release include, but are not limited to, assumptions relating to, demand levels and pricing for oilfield services; fluctuations in the price and demand for oil and natural gas; the continued low levels of and pressures on commodity pricing; the continued business relationship between the Company and its significant customers; general economic and financial market conditions; the development of liquefied natural gas projects, crude oil transport and pipeline approval and development; the Company's ability to finance its operations; the effects of seasonal and weather conditions on operations and facilities; the competitive environment to which the various business segments are, or may be, exposed in all aspects of their business; the ability of the Company's various business segments to access equipment (including spare parts and new technologies); changes in laws or regulations; currency exchange fluctuation; the ability of the Company to attract and retain skilled labour and qualified management; the ability to retain and attract significant customers; and other unforeseen conditions which could impact the use of services supplied by Western including Western's ability to respond to such conditions.
Although Western believes that the expectations and assumptions on which such forward-looking statements and information are based on are reasonable, undue reliance should not be placed on the forward-looking statements and information as Western cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risk that the demand for oilfield services will not improve for the remainder of 2016 and that commodity price levels will remain low, and other general industry, economic, market and business conditions. Readers are cautioned that the foregoing list of risks, uncertainties and assumptions are not exhaustive. Additional information on these and other risk factors that could affect Western's operations and financial results are included in Western's annual information form which may be accessed through the SEDAR website at www.sedar.com. The forward-looking statements and information contained in this press release are made as of the date hereof and Western does not undertake any obligation to update publicly or revise any forward-looking statements and information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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