/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, March 11 /CNW/ - Canyon Services Group Inc. ("Canyon" or the "Company") (TSX:FRC) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Peters & Co. Limited and including Cormark Securities Inc., Raymond James Ltd. and Wellington West Capital Markets Inc. (the "Underwriters") pursuant to which the Underwriters have agreed to purchase on a "bought deal" basis 10.7 million common shares ("Common Shares") of Canyon at a price of $3.80 per Common Share (the "Issue Price") for aggregate gross proceeds of approximately $40.7 million (the "Offering"). Canyon has also granted the Underwriters an option (the "Over-Allotment Option") to purchase up to an additional 1.6 million Common Shares at the Issue Price to cover over-allotments, if any, for additional gross proceeds of approximately $6.1 million. The Over-Allotment Option is exercisable in whole or in part at any time until 30 days after the closing of the Offering.
Proceeds of the Offering will be used to fund the Company's expanded 2010 capital program, to temporarily reduce bank indebtedness and for general corporate purposes. Canyon's continued expansion into deeper segments of the pressure pumping market with the successful completion of large, horizontal, multi-stage fracturing programs in Alberta and British Columbia, has resulted in increased demand for Canyon's services and the need to expand its pressure pumping fleet by approximately 50,000 hhp. Canyon's new capital program will increase the Company's horsepower capabilities from 75,000 hhp in Q2 2010 to approximately 125,000 hhp by late 2010 or early 2011. Management believes this expansion positions Canyon as one of the leaders in providing pressure pumping services to Canada's unconventional oil and natural gas resource plays.
Pursuant to the Offering, the Common Shares will be offered in all provinces of Canada by way of a short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration requirements pursuant to Rule 144A and/or Regulation D of the United States Securities Act of 1933.
Closing of the Offering is expected to occur on or about April 6, 2010 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.
ADVISORY: This press release contains forward-looking statements which may include statements concerning the closing date of the Offering, and the anticipated use of the net proceeds of the Offering, expanded capital program and debt reduction. Although Canyon believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Canyon can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the Offering could be delayed if Canyon is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the Offering by Canyon might change if the board of directors of Canyon determines that it would be in the best interests of Canyon to deploy the proceeds for some other purpose.
The forward-looking statements contained in this press release are made as of the date hereof and Canyon undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Corporation within the United States. The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws. Accordingly, the Common Shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration is available.
The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.
SOURCE Canyon Services Group Inc.
For further information: For further information: Brad Fedora, President & CEO, Phone (403) 290-2491; Barry O'Brien, Vice President, Finance & CFO, Phone (403) 290-2478