North American Energy Partners Inc. (NYSE: NOA; TO: NOA) intends to make purchases in the normal course in the U.S., primarily through the facilities of the New York Stock Exchange, of up to 1.8 million voting common shares.
Such voting common shares represent 5% of the some 36.3 million issued and outstanding voting common shares as of Sept. 30.
"Over the last year we have used the initial proceeds from the sale of our pipeline construction assets and piling business to significantly reduce both the size and cost of our debt. We now think that it is appropriate to use monetized working capital from the divestments to purchase our shares. While near horizon demand for our services in the oil sands market remains challenging, we believe that our medium to long term prospects, together with the contingent cash proceeds from the sale of our piling business, are not fully reflected in our stock price. If this remains the case, we are confident that the purchase of our shares would be in the best long term interest of our shareholders," Martin Ferron, president and CEO, said in the release.
The purchase program will commence on or about Oct. 23 and will terminate no later than 12 months from the date of the first purchase under such program. All purchases of shares in the U.S. will be made in compliance with the U.S. Securities Exchange Act. The safe harbor conditions limit the number of shares that can be purchased per day in the U.S. Subject to certain exceptions for block purchases, the maximum number of shares which can be purchased per day in the U.S. will be 25% of the average daily trading volume for the four calendar weeks preceding the date of purchase. The price per share will be based on the market price of such shares at the time of purchase in accordance with regulatory requirements.
The company will enter into an agreement with a broker to establish an automatic share purchase plan in respect of the purchase program. The plan will be established to provide standard instructions regarding how the company's voting common shares are to be purchased under the program, subject to pre-established parameters. Concurrent with the establishment of the plan, the company will confirm to the broker that it is then not aware of any material undisclosed or non-public information with respect to the company or any securities of the company. During the term of the plan, the company will not communicate any material undisclosed or non-public information to the trading staff of the broker; accordingly, the broker may make purchases regardless of whether a trading blackout period is in effect or whether there is material undisclosed or non-public information about the company at the time that purchases are made under the plan. Pursuant to the terms of the plan, provided that the company is neither in possession of material undisclosed or non-public information relating to the company nor in a trading blackout period, the company will have the ability to authorize the broker to make purchases outside of the pre-established price limits. In the event that the plan is materially varied, suspended or terminated, the company will issue a press release advising of such variation, suspension or termination, as applicable. Shares purchased pursuant to the purchase program will be cancelled.
In order to commence the purchase program prior to the release of the company's financial results for the quarter ended Sept. 30, the company is providing preliminary financial estimates. The company does not intend to provide such estimates in the future. The company expects financial performance for the quarter ended Sept. 30 to be similar to the quarter ended June 30, as previously indicated. Revenue from the most recent quarter is expected to be in the range of $105 million to $120 million compared to revenue of $115 million for the quarter ended June 30. Consolidated earnings before interest and taxes depreciation and amortization (EBITDA) is expected to be in the range of $9 million to $11 million compared to consolidated EBITDA of $8.9 million for the quarter ended June 30. The estimate ranges in this release exclude the impact of discontinued operations and non-recurring, non-operating items, such as income or expense items related to the sale of the company's piling business.
As anticipated, the company's operating environment remained in line with the previous quarter. The company expects a development decision for a significant new mine site by the end of the calendar year and continues to pursue heavy civil construction contracts in the oil sands and with other major resource companies in Canada.
All figures provided above with respect to the quarter ended Sept. 30 are preliminary, have not been reviewed by the company's auditors and are subject to change as the company's financial results are finalized.
North American Energy Partners Inc. provides services to large oil, natural gas and resource companies, primarily in Western Canada. The company is based in Acheson, Canada.