February 23 - Entrec Corporation has announced its 2015 business plan and a net capital expenditure programme of USD21 million.
With the recent decline in crude oil prices, there is now significant uncertainty as to how these prices will impact future activity levels in the oil and gas industry and in particular, the Alberta oil sands region, said Entrec, and its 2015 business plan and capital expenditure programme reflects this new reality.
Having fulfilled previous commitments and taken delivery of certain equipment in the first quarter of 2015, Entrec will be curtailing future capital expenditures until the industry outlook improves.
"Moving into 2015, our outlook is mixed," said Entrec president and ceo, John Stevens. "On the positive side, we expect that utilisation levels for our crawler and rough terrain cranes will increase throughout 2015 as some of our oil sands construction projects continue to ramp up."
Offsetting these improvements, however, is heightened uncertainty related to Entrec's operations supporting oil and natural gas exploration and production. Although demand has remained strong so far, the company is anticipating a slowdown in activity this year due to the recent drop in crude prices, which will have a negative impact on Entrec's operations.
The company expects activity levels to remain high in northwest British Columbia as it continues to support the smelter revitalisation project in Kitimat, which is anticipated to remain active until mid-2015. Entrec says it is also well positioned there to support the region's growing industrial activity, including the future construction of LNG facilities.
Entrec does expect that utilisation levels for its platform trailers will remain similar to levels achieved in 2014, but below those achieved in 2012 and 2013.
"2015 will be a challenging year for the oil and gas industry," says the company. Entrec notes that it is currently difficult to accurately predict the potential impact the crude price collapse will have on the crane and specialised transportation industry as the year proceeds.
Entrec estimates revenue for the year ending December 31, 2015 to range from USD200 million to USD240 million, compared to an estimated revenue of approximately USD230 million for the year ended December 31, 2014.
"While we expect 2015 to be a challenging year from an operating perspective, we are aggressively managing our costs through this period and remain well-positioned to capture future growth opportunities once industry fundamentals improve," said Stevens.
The company's 2015 growth capital expenditures will include the addition of a 750-tonne capacity LR1750 crawler crane, which is expected to be used on an oil sands and power construction project for the majority of 2015 and 2016; as well as the addition of several all-terrain mobile cranes.