Savanna Energy Services Corp. Agrees to Cancel New Build Australian Contracts

CALGARY, ALBERTA--(Marketwired - March 2, 2015) - Savanna Energy Services Corp. (TSX:SVY) - In light of the significant uncertainty in respect of commodity pricing and activity levels for all of Savanna's services, Savanna and an Australian customer have mutually agreed to cancel construction of the 4 TDS drilling rigs previously contracted in Q4 2014, resulting in the reduction of $34.5 million from Savanna's 2015 capital budget and a further $25 million from its 2016 capital commitments.

Savanna's estimated capital commitment for 2015 is updated as follows:

(Stated in millions of dollars)
Estimated capital required to complete 2014 growth initiatives	16.4
Estimated capital required to complete 2014 new field operating facilities	18.5
Maintenance capital for 2015	22.3
Proceeds on sale of field operating facilities received to date in 2015	(11.5	)
Net capital program spend	45.7

In addition, the Company determined to consolidate a number of its field operating facilities. The $16 million aggregate net book value of the land and buildings associated with these locations were classified as held for sale at December 31, 2014. To date in 2015, total proceeds of $11.5 million were received for two of the properties and the remaining locations continue to be actively marketed.