PHX Energy Services Corp. announces that its Board of Directors has approved a $10 million increase to the Corporation’s 2021 capital expenditure program (the “2021 Program”) and anticipates allocating $8 million of this increase towards growth capital and $2 million towards maintenance. With this increase the Corporation now anticipates spending $25 million in capital expenditures during the 2021-year. PHX Energy expects to dedicate the additional capital expenditures to the growth of the Velocity Real Time System (“Velocity”) and Atlas high performance drilling motor (“Atlas”) fleets.
In the first quarter of 2021, the Corporation has experienced an uptick in activity from the last quarter of 2020 as industry activity has continued to rebound. Both Velocity and Atlas continue to be in high demand and the Corporation anticipates further strengthening in both Canada and the US in the later half of the year. With this anticipated level of demand in North America and the recently announced new technology partnership in the Middle East North Africa (“MENA”) regions, PHX Energy believes its fleet would reach capacity in the second half of 2021. The increase to its 2021 Program will provide equipment to meet the anticipated demand within its global operations. Additionally, there are sizes of equipment required in the MENA region that differ from those in North America and a portion of the expenditures will be directed towards equipping the MENA fleet with the capabilities to meet these requirements.
PHX Energy will continue to take a disciplined approach toward growth and believes the increase to the 2021 Program will aid in further improvements in profitability while maintaining its strong financial position. The 2021 program is expected to be financed from a combination of cash flow from operations and the Corporation’s cash on its balance sheet.
About PHX Energy Services Corp.
The Corporation, through its directional drilling subsidiary entities, provides horizontal and directional drilling technology and services to oil and natural gas producing companies in Canada, the US, Russia, MENA and Albania. The common shares of PHX Energy are traded on the Toronto Stock Exchange under the symbol “PHX”