Eco-Stim Energy Solutions Signs Contract To Expand Operations into Oklahoma
HOUSTON, TX and NEUQUEN CITY, ARGENTINA -- (Marketwired) -- 01/26/17 -- Eco-Stim Energy Solutions, Inc. (NASDAQ: ESES) ("EcoStim" or the "Company") announced today that the Company has executed a one-year contract, with an option for a second year, with a well-capitalized and established US exploration and production company ("the Customer") to expand its pressure pumping operations into one of the fastest growing and most active oil and gas regions in Oklahoma. The Company expects that the work to be performed under this contract should provide a solid entry into this region, with the option to grow and allow the Company to generate positive cash flow with attractive returns.
The Customer is currently planning to utilize an EcoStim well stimulation fleet to complete roughly two wells per month, and should a second rig be deployed later this year, the number of wells will increase accordingly. Each well is expected to be completed with between 17 and 20 stages, which would require approximately 40,000 HHP. Currently, EcoStim owns approximately 77,000 HHP, with 32,000 HHP in Argentina and approximately 45,000 HHP in the United States. Management believes the Company has multiple options to secure any additional equipment needed to execute the work required under this contract.
This well stimulation fleet will utilize a combination of conventional diesel powered pumping units and the Company's innovative turbine powered units ("TPU") which have operated reliably in Argentina. The Company believes it has a competitive advantage with TPU's in the United States primarily because the TPU's offer our customers reduced manpower and lower field operating costs. In addition, the TPU's can run on natural gas, compressed natural gas or liquefied natural gas, allowing for the selection of the most cost effective fuel option. Furthermore, the emissions emitted from this type of equipment are significantly below the EPA's Tier 4 requirements making them one of the most efficient and cleanest running systems in the industry.
J. Chris Boswell, EcoStim's President and Chief Executive Officer commented, "We have said for some time that we would not enter the U.S. pressure pumping market without some type of technology advantage, a contract and better market conditions. We now believe we have met these criteria and while the work contemplated under this contract is not expected to be executed solely with the TPU technology, we will utilize this equipment as part of the service offering. In addition, we believe that this region is poised for significant growth and this contract will position the Company in an attractive region with an anchor customer."
"Since we expect the work in the US to commence early in Q2 2017, we will utilize the TPU's and other support equipment located in our Houston facilities. The ultimate amount of investment needed, if any, to support this contract will largely depend on the outcome of several outstanding bids in Argentina. The labor negotiations and the recent agreement reached in Argentina were important milestones; however, those negotiations delayed the award of several contracts from 2016 to 2017. We remain optimistic that the Company's bids are competitive and believe that the delayed contract awards will be decided soon".
Bobby Chapman, the Company's Chief Operations Officer commented, "We are excited to deploy advanced, environmentally efficient and cost effective pumping technology here in the North American market. We plan to build our operation here carefully just as we have in Argentina, with a high degree of competence. We believe this region of Oklahoma offers us the ability to demonstrate the cost savings associated with turbine powered equipment including the ability to run the operation on field gas. We have discussed this technology advantage with many potential customers in the region and most find the service offering very compelling."
About the Company
Eco-Stim Energy Solutions is an environmentally focused oilfield service and technology Company providing well stimulation and completion services and proprietary field management technologies to oil and gas producers. EcoStim's proprietary methodology and technology offers the potential to decrease the number of stages stimulated in shale plays through a unique process that predicts high probability production zones while confirming those production zones using the latest generation down-hole diagnostic tools. In addition, EcoStim offers its clients completion techniques that can dramatically reduce horsepower requirements, emissions, surface footprint and water usage. EcoStim seeks to deliver well completion services with better technology, better ecology and significantly improved economics for unconventional oil and gas producers worldwide.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate.
Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Chief Financial Officer
Source: Eco-Stim Energy Solutions, Inc.
Released January 26, 2017