Savanna's focus on right-sizing it's operating and general and administrative costs, to better align with anticipated volatility and base levels of activity, is underway. It is anticipated that cost management will improve in forward quarters relative to Q1 2013 and Q4 2012.
The oilfield service market faces a high degree of uncertainty in the near-term. Commodity pricing, particularly heavy oil, and tight credit markets in North America are impacting customer demand for services, and this volatility has created significant uncertainty regarding activity levels for the remainder of 2013. In Australia, long-term prospects appear strong, however activity swings arising from weather and development have historically impacted short-term utilization, and initial start-up costs have impacted cash flows. Despite these factors, Savanna remains confident in the long-term prospects for every region in which the Company operates, and in Savanna's ability to deliver the safest, most effective drilling, completion and workover services possible to its customers.
Cautionary Statement Regarding Forward-Looking Information and Statements
Certain statements and information contained in this press release including statements related to the Company's expectation of the timing of delivery of new service rigs, the expectation of increasing the number of service rigs in North Dakota, the expectation of increased activity levels, increased utilization, improved operating margins, and improved returns from Savanna's Australian operations, the expectation of overall cost management improvements, the expectation of continued uncertainty in North American activity levels and the Company's ability to mitigate the effect of such, the expectation of a long-term increase in well servicing activity, and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may", "likely", "estimate", "predict", "potential", "continue", "maintain", "retain", "grow", and similar expressions and statements relating to matters that are not historical facts may constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995.
These statements are based on certain assumptions and analysis made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. In particular, the Company's expectation of the timing of delivery of new service rigs is premised on current advice from its suppliers on the progress of the rig builds. The Company's expectation of increasing the number of service rigs in North Dakota is premised on the Company's current outlook for industry activity in that region. The Company's expectation of increased activity levels, increased utilization, improved operating margins, and improved returns from Savanna's Australian operations is premised on actual results experienced to date in 2013, the contracts in place and communications with its customers in the region, and the general expectation that coal seam gas activity will increase in that country as plans for liquefied natural gas plants move forward.
The Company's expectation of overall cost management improvements, is premised on cost management and process improvement initiatives currently underway. The Company's expectation of its ability to mitigate the effect of continued uncertainty in North American activity levels is premised on actual results experienced to date in 2013, customer contracts and commitments, the Company's expectations for its customers' capital budgets and geographical areas of focus, the status of current negotiations with its customers, and the focus of its customers on oil directed drilling opportunities in the current natural gas pricing environment in North America. The Company's expectation of a long-term increase in well servicing activity in North America is premised on the increase in the number of oil and gas liquids based wells that have been drilled over the last several years and the required maintenance through the life of such wells compared to natural gas wells. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to: fluctuations in the price and demand for oil and natural gas; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for well servicing, oilfield rentals and contract drilling; the effects of weather conditions on operations and facilities; the existence of competitive operating risks inherent in well servicing, oilfield rentals and contract drilling; general economic, market or business conditions; changes in laws or regulations, including taxation, environmental and currency regulations; the lack of availability of qualified personnel or management; the other risk factors set forth under the heading "Risks and Uncertainties" in the Company's Annual Report and under the heading "Risk Factors" in the Company's Annual Information Form; and other unforeseen conditions which could impact on the use of services supplied by the Company.
Consequently, all of the forward-looking information and statements made in this press release are qualified by this cautionary statement and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business or operations. Except as may be required by law, the Company assumes no obligation to update publicly any such forward-looking information and statements, whether as a result of new information, future events, or otherwise.
Savanna's full Q1 2013 report, including its management's discussion and analysis and condensed consolidated financial statements, is available on Savanna's website (www.savannaenergy.com) under the investor relations section and has also been filed on SEDAR at www.sedar.com.
Savanna will host a conference call for analysts, investors and interested parties on Tuesday, May 7, 2013 at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time) to discuss the Company's first quarter results. The call will be hosted by Ken Mullen, Savanna's President and Chief Executive Officer and Darcy Draudson, Executive Vice President, Finance and Chief Financial Officer.
If you wish to participate in this conference call, please call 1-888-892-3255 (for participants in North America). Please call 10 minutes ahead of time.
A replay of the call will be available until May 14, 2013 by dialing 1-800-937-6305 and entering passcode 436282.
Savanna is a Canadian-based drilling and oilfield services provider with operations in Canada, the United States and Australia, focused on providing fit for purpose equipment and technologies.
Savanna Energy Services Corp.
President and Chief Executive Officer
Savanna Energy Services Corp.
EVP Finance and Chief Financial Officer
Most Popular Stories
- Twitter Names Woman to Board
- NSA Tracks 5 Billion Cellphone Records a Day
- Nelson Mandela Dies After Momentous Life
- Nelson Mandela Dead at 95
- W.H. Corrects Itself on Unclegate
- Pope Francis Says He'll Fight Child Sex Abuse
- Yemen Attack Kills 52
- Fast-Food Workers Want $15 an Hour
- Roybal-Allard Tours Gordon Brush Plant
- Aspen Contracting Adding 300 Jobs