Enerflex Ltd. Provides Update Related to Kurdistan Project
Enerflex (TSX: EFX) (NYSE: EFXT) has announced the termination of its Kurdistan-based EH Cryo project following a Force Majeure declaration after a fatal drone attack at an adjacent facility. The company faces arbitration proceedings from its customer but disputes these claims and will seek to recover amounts owed. The project's net asset position was $161 million at Q3/24 end, with $75 million in Engineered Systems backlog to be reversed in Q4/24. A $31 million letter of credit supports project obligations, though any drawing would be considered improper by Enerflex. The company maintains $588 million available for future drawings.
Enerflex (TSX: EFX) (NYSE: EFXT) ha annunciato la cessazione del suo progetto EH Cryo in Kurdistan dopo una dichiarazione di Forza Maggiore a seguito di un attacco mortale con droni in una struttura vicina. L'azienda si trova ad affrontare procedimenti arbitrali da parte del suo cliente, ma contesta queste affermazioni e cercherà di recuperare le somme dovute. La posizione netta degli attivi del progetto ammontava a $161 milioni alla fine del terzo trimestre del 2024, con un arretrato di $75 milioni nei Sistemi Ingegnerizzati da recuperare nel quarto trimestre del 2024. Una lettera di credito di $31 milioni supporta gli obblighi del progetto, anche se qualsiasi prelievo sarebbe considerato improprio da Enerflex. L'azienda mantiene $588 milioni disponibili per futuri prelievi.
Enerflex (TSX: EFX) (NYSE: EFXT) ha anunciado la terminación de su proyecto EH Cryo en Kurdistán tras una declaración de Fuerza Mayor luego de un ataque mortal con drones en una instalación adyacente. La empresa enfrenta procedimientos de arbitraje por parte de su cliente, pero disputa estas reclamaciones y buscará recuperar los montos adeudados. La posición neta de activos del proyecto era de $161 millones al final del tercer trimestre de 2024, con un remanente de $75 millones en Sistemas Ingeniería que se revertirá en el cuarto trimestre de 2024. Una carta de crédito de $31 millones respalda las obligaciones del proyecto, aunque cualquier retiro sería considerado inapropiado por Enerflex. La empresa mantiene $588 millones disponibles para futuros retiros.
Enerflex (TSX: EFX) (NYSE: EFXT)은 인근 시설에서 발생한 치명적인 드론 공격 이후 불가항력 선언에 따라 쿠르드스탄에 기반한 EH Cryo 프로젝트의 종료를 발표했습니다. 회사는 고객으로부터 중재 절차에 직면하고 있으나, 이러한 주장에 반대하며 미결제 금액의 회수를 추구할 것입니다. 프로젝트의 순 자산 규모는 2024년 3분기 말 기준으로 $161 백만이며, 2024년 4분기에는 $75 백만의 엔지니어링 시스템 적체가 청구될 예정입니다. $31 백만의 신용장으로 프로젝트 의무를 지원하지만, Enerflex는 어떤 인출도 부적절하다고 간주합니다. 회사는 향후 인출을 위해 $588 백만을 유지하고 있습니다.
Enerflex (TSX: EFX) (NYSE: EFXT) a annoncé la cessation de son projet EH Cryo basé au Kurdistan suite à une déclaration de Force Majeure après une attaque mortelle par drone sur une installation adjacente. L'entreprise est confrontée à des procédures d'arbitrage de son client mais conteste ces revendications et cherchera à récupérer les sommes dues. La position nette d'actifs du projet était de $161 millions à la fin du 3ème trimestre 2024, avec un arriéré de $75 millions dans les Systèmes Ingénierie qui devra être annulé au 4ème trimestre 2024. Une lettre de crédit de $31 millions soutient les obligations du projet, bien que tout tirage serait considéré comme impropre par Enerflex. L'entreprise dispose de $588 millions pour de futurs tirages.
Enerflex (TSX: EFX) (NYSE: EFXT) hat die Beendigung seines in Kurdistan angesiedelten EH Cryo-Projekts nach einer Erklärung von Höherer Gewalt nach einem tödlichen Drohnenangriff auf eine angrenzende Anlage angekündigt. Das Unternehmen sieht sich Schiedsverfahren von seinem Kunden gegenüber, bestreitet jedoch diese Ansprüche und wird versuchen, fällige Beträge einzufordern. Die Nettoposition des Projekts betrug zum Ende des 3. Quartals 2024 $161 Millionen, mit einem Rückstand von $75 Millionen bei den Ingenieursystemen, der im 4. Quartal 2024 zurückgeführt werden soll. Ein $31 Millionen großes Akkreditiv unterstützt die Projektverpflichtungen, jedoch würde jede Abhebung von Enerflex als unzulässig erachtet. Das Unternehmen hält $588 Millionen für zukünftige Abhebungen bereit.
- Strong liquidity position with $588 million available for future drawings
- Minimal gross margin impact expected from the project termination
- $161 million net asset position at risk
- $75 million reduction in Engineered Systems backlog
- Potential legal costs from arbitration proceedings
- $31 million letter of credit exposure
Insights
The termination of the Kurdistan project represents a significant development with material financial implications. The
The
The regional geopolitical instability affecting this project highlights operational risks in politically sensitive markets. Investors should monitor the arbitration proceedings and potential impact on future regional business opportunities.
CALGARY, Alberta, Nov. 27, 2024 (GLOBE NEWSWIRE) -- Enerflex Ltd. (TSX: EFX) (NYSE: EFXT) (“Enerflex” or the “Company”) today provided an update of a modularized cryogenic natural gas processing facility in Kurdistan (the “EH Cryo project”).
As previously announced, during the second quarter of 2024, Enerflex suspended activity at the EH Cryo project, demobilized its personnel and provided its customer with notice of Force Majeure following a fatal drone attack at an adjacent facility. Due to the continuing Force Majeure and circumstances that make it impossible for Enerflex to fulfill its obligations under the EH Cryo project contract, Enerflex today provided its customer with formal notice of termination.
As previously announced, Enerflex’s customer has commenced arbitration proceedings against the Company, asserting certain baseless and unsubstantiated claims. Enerflex is disputing these claims and, following today’s termination, Enerflex will seek to recover amounts owing in connection with the EH Cryo project. At the end of Q3/24, the net asset position associated with the EH Cryo project was
Approximately
Since inception of the EH Cryo project, Enerflex has maintained a
ADVISORY REGARDING FORWARD-LOOKING INFORMATION
This news release contains “forward-looking information” within the meaning of applicable Canadian securities laws and “forward-looking statements” (and together with “forward-looking information”, “forward-looking information and statements”) within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking information and statements. The use of any of the words "future", "continue", "estimate", "expect", "may", "will", "could", "believe", "predict", "potential", "objective", and similar expressions, are intended to identify forward-looking information and statements. In particular, this news release includes (without limitation) forward-looking information and statements pertaining to the Company’s expectations to recover amounts owing in connection with the EH Cryo project, if any; and the Company’s expectations to reverse approximately
All forward-looking information and statements in this news release are subject to important risks, uncertainties, and assumptions, which may affect Enerflex's operations, including, without limitation: the impact of economic conditions; the markets in which Enerflex's products and services are used; general industry conditions; changes to, and introduction of new, governmental regulations, laws, and income taxes; increased competition; political unrest and geopolitical conditions; and other factors, many of which are beyond the control of Enerflex. As a result of the foregoing, actual results, performance, or achievements of Enerflex could differ and such differences could be material from those expressed in, or implied by, these statements, including but not limited to those factors referred to under the heading "Risk Factors" in: (i) Enerflex's Annual Information Form for the year ended December 31, 2023, (ii) Enerflex's management’s discussion and analysis for the year ended December 31, 2023, and (iii) Enerflex's Management Information Circular dated March 15, 2024, each of the foregoing documents being accessible under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively.
Readers are cautioned that the foregoing list of assumptions and risk factors should not be construed as exhaustive. The forward-looking information and statements included in this news release are made as of the date of this news release and are based on the information available to the Company at such time and, other than as required by law, Enerflex disclaims any intention or obligation to update or revise any forward-looking information and statements, whether as a result of new information, future events, or otherwise. This news release and its contents should not be construed, under any circumstances, as investment, tax, or legal advice.
ABOUT ENERFLEX
Enerflex is a premier integrated global provider of energy infrastructure and energy transition solutions, deploying natural gas, low-carbon, and treated water solutions – from individual, modularized products and services to integrated custom solutions. With over 4,600 engineers, manufacturers, technicians, and innovators, Enerflex is bound together by a shared vision: Transforming Energy for a Sustainable Future. The Company remains committed to the future of natural gas and the critical role it plays, while focused on sustainability offerings to support the energy transition and growing decarbonization efforts.
Enerflex's common shares trade on the Toronto Stock Exchange under the symbol "EFX" and on the New York Stock Exchange under the symbol "EFXT". For more information about Enerflex, visit www.enerflex.com.
For investor and media enquiries, contact:
Marc Rossiter
President and Chief Executive Officer
E-mail: MRossiter@enerflex.com
Preet S. Dhindsa
Senior Vice President and Chief Financial Officer
E-mail: PDhindsa@enerflex.com
Jeff Fetterly
Vice President, Corporate Development and Investor Relations
E-mail: JFetterly@enerflex.com
FAQ
Why did Enerflex (EFXT) terminate the Kurdistan EH Cryo project?
What is the financial impact of the Kurdistan project termination on Enerflex (EFXT)?
What legal challenges does Enerflex (EFXT) face regarding the Kurdistan project?
