CALGARY, AB, June 30, 2020 /CNW/ - Western Energy Services
Corp. ("Western") (TSX: WRG) announces that it and Alberta
Investment Management Corporation, the lender under its second lien
credit facility, have agreed to amend the second lien facility
credit agreement to provide that the payment of interest and a
portion of principal that Western would have been required to pay
on July 2, 2020 will now be due on
September 1, 2020.
Western has the financial resources available from existing cash
on hand and availability under its senior secured credit facility
to make the required payment, which would have been approximately
$8.2 million, on the original
due date. However, Western is currently in discussions with
its lenders and other parties with respect to potential further
refinancing transactions to provide long-term financial stability
through the current challenging industry environment arising from
lower oil and natural gas prices, reduced exploration activity in
the North American energy industry and business disruptions
resulting from the COVID-19 pandemic. The payment extension
is intended to provide Western with additional flexibility to allow
it to avoid drawing this amount on its senior credit facility
while it explores these potential opportunities.
There is no certainty as to whether Western will be successful
in negotiating or completing new refinancing transactions prior to
the extended payment deadline or at all. If no such
alternative transactions are completed and no further payment
extension under the second lien facility is available by
September 1, 2020, then Western would
plan to make the payment on such date using financial resources
that it expects to have available at that time.
About Western
Western is an oilfield service company which provides contract
drilling services in Canada
through its Horizon Drilling division and in the United States through its wholly-owned
subsidiary Stoneham Drilling Corporation. In Canada, Western
also provides well servicing through its Eagle Well Servicing
division and provides oilfield rental services through its Aero
Rental Services division. Stoneham's division, Western Oilfield
Services, provides well servicing in the
United States.
Forward-Looking Statements and Information
This press release contains certain statements or disclosures
relating to Western that are based on the expectations of Western
as well as assumptions made by and information currently available
to Western which may constitute forward-looking information under
applicable securities laws. All information and statements
contained herein that are not clearly historical in nature
constitute forward-looking information, and words and phrases such
as "may", "will", "should", "could", "expect", "intend",
"anticipate", "believe", "estimate", "plan", "potential",
"continue", "looking to", or the negative of these terms or other
comparable terminology are generally intended to identify
forward-looking information. This information involves known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking information. In
particular, forward-looking information in this press release
includes statements relating to potential refinancing transactions
that Western may seek to pursue and Western's plans to finance the
payment of amounts due under its second lien credit facility when
due on September 1, 2020. Such
statements reflect Western's current views and intentions with
respect to future events, based on information available to
Western. In particular, these statements are based on
assumptions as to the willingness of Western's lenders and other
parties to negotiate new financing arrangements, the continuation
of current industry conditions affecting Western's performance and
financial condition, and the continued availability of Western's
senior secured credit facility to finance the second lien payment
requirements when due on September 1,
2020.
Although Western believes that the expectations and assumptions
on which such forward-looking statements and information are based
on are reasonable, undue reliance should not be placed on the
forward-looking statements and information as Western cannot give
any assurance that they will prove to be correct. Since
forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. These risks include (i) the potential further
deterioration of industry conditions that could negatively affect
Western's performance and financial conditions, (ii) Western's
lenders or other parties becoming unwilling to negotiate potential
refinancing transactions, and (iii) Western's inability to meet its
obligations under its credit facilities such that further financing
is not available, was well as other risk factors are discussed
under the heading "Risk Factors" in Western's annual information
form for the year ended December 31,
2019 which may be accessed through the SEDAR website at
www.sedar.com. The forward-looking statements and information
contained in this press release are made as of the date hereof and
Western does not undertake any obligation to update publicly or
revise any forward-looking statements and information, whether as a
result of new information, future events or otherwise, unless so
required by applicable securities laws.
SOURCE Western Energy Services Corp.