By CALGARY, ALBERTA--(Marketwire - Jan. 17, 2012) - Total Energy Services Inc. ("Total") (TSX:TOT) announces that it has increased its 2012 capital expenditure budget to $58.1 million. This $27.5 million increase includes $13.1 million for the Contract Drilling Services division (Chinook Drilling), $5.2 million for the Rentals and Transportation division (Total Oilfield Rentals), $3.7 million for the Gas Compression Services division (Bidell) and $5.5 million for capital maintenance amongst all divisions.
Included in Total's Contract Drilling Services division budget is $10.5 million for the construction of a 3,500 meter (vertical depth rating) telescopic double drilling rig complete with top drive and $2.6 million of ancillary rig equipment and upgrades. Upon completion of this rig build, which is scheduled for the fourth quarter of 2012, Chinook Drilling will have a modern fleet of 16 drilling rigs including 14 telescopic doubles with vertical depth ratings of 3,000 meters or greater that are very well suited for extended reach horizontal drilling programs. Chinook Drilling will look to contract the new rig closer to completion although preliminary discussions are underway with several operators.
The additional capital expenditures allocated to the Rentals and Transportation division will replace and upgrade six heavy trucks and increase the number of pieces of rental equipment being constructed pursuant to the current 2012 build program by 10% to approximately 220 pieces. Upon completion of this capital program, Total will have an owned heavy truck fleet consisting of 105 units with an average age of three years and approximately 9,200 pieces of rental equipment.
The capital expenditure program for Total's Gas Compression Service division will be directed towards the continued expansion of Bidell's parts and service business as well as Total's entry into the process equipment fabrication business.
Included in the $5.5 million of maintenance capital spending is $2.5 million of capital leases related to the regular replacement of light duty vehicles.
Total intends to finance its 2012 capital expenditure budget from cash on hand, operating cash flow and, if necessary, its $35 million credit facility which is currently fully available and undrawn. Total's 2012 capital expenditure budget provides Total with considerable flexibility to pursue additional investment opportunities as they may arise.
Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".
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