"EcoStim" or the "Company", is providing a brief update on the status of various contract opportunities as communicated in the Company's most recent conference call in mid-November. At that time, the Company had submitted bids and proposals for Argentina-related contracts valued at over $75 million for work in 2017 and beyond. Based on customer indications, we had expected the awards for much of this work to be finalized before the end of 2016. However, the final outcome of these bids has not been concluded within the time frame previously expected.
The Company has been informed that the award notification on two of the key contract opportunities has been delayed until mid to late January 2017. In the interim, the Company is continuing to work for this client under the previous rotational on-call contracts which have now been extended into January. With respect to the unconventional project the Company was pursuing for 2017, the Company has received indications informally that the work will likely be awarded to a competitor primarily because the Company lacks the necessary pumping horsepower readily available in the country to execute the work.
In addition to the Argentina opportunities discussed on our conference call, the Company has also been evaluating two contract opportunities in West Texas. One of these contract opportunities progressed to a fully negotiated and signed letter of intent ("LOI") for a one year take or pay contract with an estimated annual value of $71 million. Unfortunately, the private equity backed E&P company we worked with on this agreement announced on December 14, 2016 that their properties in West Texas were being sold. Subsequently, we were informed that the acquiring company did not wish to proceed to the contract stage and therefore discussions were terminated. The second opportunity that we identified is still under consideration and we have recently become aware of additional opportunities in the United States which we are further evaluating.
J. Chris Boswell, EcoStim's President and Chief Executive Officer commented, "It is frustrating to experience delays in the award of these contracts but we understand that our clients have many priorities and we can only wait until they have concluded their respective reviews of the tenders submitted. We continue to believe that our offers are very competitive and remain confident that we will be awarded some of the proposed work for next year. With respect to West Texas, we were very pleased to have reached operational and financial terms with a high-quality company to potentially expand our operations into a rapidly growing West Texas market. However, as has happened many times in West Texas, our customer decided to sell their assets to a larger company who unfortunately had long established relationships with other service providers. This experience was a good exercise for the Company and we are now actively looking at other similar opportunities in West Texas and other resurging markets for possible expansion into the United States. I would like to thank everyone for their patience and we look forward to an improved 2017."
Source: Eco-Stim Energy Solutions, Inc.
Date: Dec 28, 2016