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EANS-News: C.A.T. oil AG
2014-16 investment program of EUR 390 million
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- Subtitle: - Capacity increase of EUR 300 million in addition to EUR 90 million for maintenance - Significant expansion of operating capacity for all core services: fracturing by 33%, sidetracking by 55% and drilling by 170% by YE2016 from YE2013 - CEO Manfred Kastner: Building upon the momentum that C.A.T. oil and the broader industry have enjoyed we will invest a further EUR 300 million to support our sustainable profitable growth in the upcoming three years. Strategic management decisions/Investment program Wien (euro adhoc) - 19 November 2013 - C.A.T. oil AG (O2C, ISIN: AT0000A00Y78), one of the leading providers of oil and gas field services in Russia and Kazakhstan, will invest EUR 390 million from 2014 to 2016, EUR 300 million dedicated to bring on stream new operating capacity and EUR 90 million for maintenance. The approved investment program suggests that by the end of 2016 operating capacities shall increase by 33% for fracturing, 55% for sidetracking and 170% for drilling compared to the end of 2013. Through this investment the Company shall not only materially enhance its operating activities and business scale but also develop a more balanced service portfolio. The total investment shall be split between the Company's operating and re-portable segments as follows: approximately 20% of the total capex will be allocated to Well Services and around 80% to Drilling, Sidetracking and IPM. The 2014-16 investment program aims at expanding significantly the Company's business to meet the growing intensity and complexity of customers' up-stream operating activities. A favorable product mix development combined with the Company's efficient cost management should further improve profitability over the period. The Company will remain focused on its primary offering of fracturing, sidetracking and drilling services, though might undertake further expansion of its complementary services such as well completions should Russian producers expedite the development of tight oil resources in 2014-2016. Manfred Kastner, C.A.T. oil CEO, commented: "Building upon the momentum that C.A.T. oil and the broader industry have enjoyed we will invest a further EUR 300 million to support our sustainable profitable growth in the upcoming three years. We will do so in a very flexible way tailored to the needs and short- to mid-term production plans of our customers. We have already proven our competence in rolling out expansion programs efficiently, economically and in a timely manner several times as witnessed by our successful diversification into sidetracking services in 2006-08 and drilling operations in 2011-12. Although we remain primarily adhered to our organic growth strategy, we continue screening selective M&A opportunities, which emerge from time to time in the Russian oilfield services market." The 2014-16 investment program constitutes the next phase of C.A.T. oil's ambitious expansion strategy and follows the previous two investment cycles: In 2006-08 the Company invested more than EUR 100 million in sidetrack drilling thus successfully diversifying the Company's service portfolio. With equal consistency and determination the Company undertook the 2011-12 investment program of EUR 150 million primarily aimed at expanding into high class drilling. The Company's total investments in growth, diversification and maintenance of operating capacities amount to EUR 400 million since its IPO in 2006. Building on the experience gained in the past and positive market prospects for the Russian oil and gas industry, C.A.T. oil is more than confident in setting once again the right priorities for the future success and prosperity of the Company, its shareholders and employees. The Company will finance its 2014-16 investment program through a combination of operating cash and long-term debt. Upon C.A.T. oil AG's request, the Company's majority shareholder CAT. Holding (Cyprus) Limited has ex-pressed its consent to enlarge and extend until November 2018 the existing committed credit line of EUR 100 million on an arm's length basis thus demonstrating its full commitment going forward. Despite significant investments in the next three years, C.A.T. oil foresees modest leverage, staying below its internal guidelines for the Debt-to-EBITDA ratio of less than 2.0 times. www.catoilag.com Press contact: FTI Consulting Thomas M. Krammer Phone: +49 (0)69 92037-183 Email: firstname.lastname@example.org Steffi Fahjen Phone: +49 (0)69 92037-115 Email: email@example.com About C.A.T. oil AG: C.A.T. oil AG is one of the leading independent oil and gas field service contractors in Russia and Kazakhstan and is listed on the Frankfurt Stock Exchange (SDAX). C.A.T. oil provides a range of high quality services, which enable oil and gas producers to extend lifecycle of their fields or bring yet unexploited oil and gas reserves to production. Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built up a leading hydraulic fracturing service, a very effective method of well stimulation by cracking rock formations with pressurized fluids, in Russia and Kazakhstan. Following its IPO in 2006, the Company developed a second core service of sidetrack drilling in 2006-08 and has established a strong presence in Russia's sidetrack drilling market. Sidetrack drilling is a term used to describe drilling of a new wellbore from the upper section of an existing well. In 2011-12, the Company launched the next phase of its growth and diversification strategy and set up high class drilling operations as a third core service offering. High class drilling is the classical technology of drilling vertical, inclined and horizontal wells for extraction of oil and gas. In total, the Company has already invested more than EUR 400 million in growth and diversification since its IPO in 2006. Following the successful set up of high class drilling in 2011-12, C.A.T. oil introduced its new segment reporting in 2013 clustering its activities in "Well Services" (fracturing, cementing and completion operations) and "Drilling, Sidetracking and IPM (Integrated Project Management)". C.A.T. oil's customer base includes the leading Russian and Kazakh oil and gas producers such as Gazprom, Rosneft, Lukoil, TNK-BP and KazMunaiGaz. The Company has long-standing relationships with these customers and has been a reliable service provider since its market entrance in the early nineties. C.A.T. oil has its headquarters in Vienna. The Company's H1 2013 weighted average headcount stood at 2,641 people, most of which are based in Russia and Kazakhstan. Disclaimer: This document contains various forward-looking statements which reflect the current views of C.A.T. oil's management with respect to certain future events, performances and financial results. However, future events, performances and financial results, being per se uncertain and subject to various internal and external factors, may differ materially from the expectations expressed explicitly or implicitly in any such forward-looking statements. Further inquiry note: Thomas Krammer Tel: +49(0)69-92037-183 Email: firstname.lastname@example.org Steffi Fahjen Tel: +49(0)69-92037-115 Email: email@example.com end of announcement euro adhoc -------------------------------------------------------------------------------- company: C.A.T. oil AG Kärntner Ring 11-13 A-A-1010 Wien phone: +43(0) 1 535 23 20 - 0 FAX: +43(0) 1 535 23 20 - 20 mail: firstname.lastname@example.org WWW: http://www.catoilag.com sector: Oil & Gas - Upstream activities ISIN: AT0000A00Y78 indexes: SDAX, Classic All Share, Prime All Share stockmarkets: regulated dealing/prime standard: Frankfurt language: English