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Cathedral Energy Services announces increase in 2008 capital budget and capital budget for 2009

Nov 18, 2008
7:00am

 

    /NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

    CALGARY, Nov. 18 /CNW/ - Cathedral Energy Services Income Trust (TSX:
CET.UN; the "Trust") is pleased to announce the board of directors of the
Trust's Administrator, Cathedral Energy Services Ltd. ("Cathedral"), have
approved an updated 2008 capital budget of $51.4 million (previous approved
budget was $39.9 million) and a 2009 capital budget of $17.0 million. Included
in the 2008 and 2009 capital expenditures are maintenance capital items in the
amount of $745,000 and $1,500,000, respectively. The 2008 and 2009 capital
expenditures will be financed by way of a combination of the Trust's credit
facilities and cash flow from operations.
    In summary, the major items within the total 2008 capital budget are: i)
20 Electro-Magnetic Measurement-While-Drilling ("EM-MWD") systems: ii)
expansion of the mud motor and collar fleet to accommodate increased
directional drilling capacity as well as to reduce rental expense for such
equipment; iii) 11 production testing units as well as progress payments on
units to be received in 2009; iv) specialty wireline tools; and v) facility
acquisition costs. The Trust expects to end 2008 with 98 MWD systems (37 in
U.S.), 28 wireline units (5 in U.S.) and 30 production testing units (8 in
U.S.).
    The major items with the 2009 capital budget are: i) an upgrade of the
fleet of EM-MWD systems to our third generation; ii) addition of 11 MWD
systems; iii) expansion of the mud motor and collar fleet to accommodate
increased directional drilling capabilities; iv) addition of 7 production
testing units for the U.S. market; and v) facility renovation costs.
    The Trust continues to make progress towards commencing commercial
activities in Venezuela. In contemplation of providing services, the Trust is
mobilizing directional drilling equipment for operations in Venezuela. The
movement of this equipment to Venezuela will bring our investment in
facilities and equipment in Venezuela to approximately $7.3 million.
    Cathedral's third generation ("G3") EM system has been commercially
released. The G3 tool utilizes enhanced formation impedance matching
techniques coupled with advanced data encoding and decoding methods that has
allowed for substantially improved transmission depth and signal detection.
The G3 system has allowed Cathedral to penetrate traditionally non EM markets
(i.e. south east Saskatchewan) as well as to enhance performance in
traditional markets. The new system not only improves data transmission
depths, but also reduces operational costs in a given application over the
existing G1/G2 EM systems.

    Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "intend",
"will", "believe", "should", "project", "forecast", "plan" and similar
expressions, including the negatives thereof, (ii) statements that are based
on current expectations and estimates about the markets in which the
Trust/Cathedral operates and (iii) statements of belief, intentions and
expectations about developments, results and events that will or may occur in
the future, constitute "forward-looking statements" and are based on certain
assumptions and analysis made by the Trust/Cathedral. Forward-looking
statements in this news release include, but are not limited to, statements
with respect to future capital expenditures, including the amount, nature and
timing thereof; oil and natural gas prices and demand; other development
trends within the oil and natural gas industry; business strategy; expansion
and growth of the Trust's/Cathedral's business and operations and other such
matters. Such forward-looking statements are subject to important risks and
uncertainties, which are difficult to predict and that may affect the
Trust's/Cathedral's operations, including, but are not limited to: the impact
of general economic conditions; industry conditions; government and regulatory
developments; oil and natural gas product supply and demand; competition; and
the Trust's/Cathedral's ability to attract and retain qualified personnel. The
Trust's/Cathedral's actual results, performance or achievements could differ
materially from those expressed in, or implied by, these forward-looking
statements and, accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if
any of them do transpire or occur, what benefits the Trust/Cathedral will
derive therefrom. Subject to applicable law, the Trust disclaims any intention
or obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
    All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in the Trust's current
Annual Information Form and Annual Report which have been filed with Canadian
provincial securities commissions and are available on www.sedar.com.

    %SEDAR: 00018316E
For further information: Requests for further information should be
directed to: Mark L. Bentsen, President and Chief Executive Officer or P.
Scott MacFarlane, Chief Financial Officer, Cathedral Energy Services Ltd.,
1700, 715 - 5th Avenue S.W., Calgary, Alberta, T2P 2X6, Telephone: (403)
265-2560, Fax: (403) 262-4682, www.cathedralenergyservices.com

Cathedral opens a 36,000 square foot full service operation facility in Oklahoma City, Oklahoma and Estevan, Saskatchewan operations migrate to Emerald Park, Saskatchewan.