/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Aug. 29, 2016 /CNW/ - Cathedral Energy Services Ltd. (TSX:CET) ("Cathedral" or the "Company") announces it has negotiated certain amendments to its credit facility with The Bank of Nova Scotia ("BNS") and National Bank of Canada ("NBF") (the "Amended Facility"). Export Development Canada ("EDC") has joined Cathedral's banking syndicate with the result that Cathedral's credit facility availability has increased from that disclosed in Cathedral's Q2 financial statements and the credit facility commitments from BNS and NBF have decreased.
EDC's support of Cathedral is part of a previously announced program, whereby EDC earmarked financial capacity for Canadian small and medium enterprises in the oil and gas sector. EDC recognizes there are many companies across Canada with solid fundamentals that are financially stressed as a result of the current commodity price driven downturn. Cathedral was able to demonstrate to EDC they have a strong export mandate and a business plan to manage through the current sector challenges and achieve future growth.
Under the Amended Facility, Cathedral's credit facility availability is now $36 million reducing to $33 million by December 31, 2016 and $28 million by March 31, 2017. At June 30, 2016, Cathedral's total draw on its credit facility was $27.3 million and the Company had cash balances of $2.2 million. Cathedral has reduced its bank debt 48% from $56.8 million at December 31, 2014. The lenders have also agreed to extend the maturity of Cathedral's credit facility to November 2017. Further details on Cathedral's credit facility are outlined in the Company's financial disclosure located at www.sedar.com.
Cathedral also announces it has initiated a process to identify, examine and consider a range of strategic alternatives available to the Company, with a view to maximizing shareholder value. Strategic alternatives may include, but are not limited to, debt and/or equity financings, joint venture or partnership transactions, the sale of the Company or a portion of the Company's assets, a merger or other such options as may be determined by the Company's Board of Directors to be in the best interests of the Company and its shareholders. For the purposes of considering strategic alternatives, Cathedral has established a special committee of independent directors ("the Special Committee"). The Special Committee has retained FirstEnergy Capital Corp. as its financial advisor in connection with this review of strategic alternatives.
Cathedral does not intend to disclose developments with respect to the strategic alternatives process unless and until the Board has approved a definitive transaction or other course of action or otherwise deems disclosure of developments is appropriate or otherwise required by law. There are no guarantees that the process will result in a transaction of any form or, if a transaction is entered into, as to its terms or timing.
Export Development Canada (EDC) is Canada's export credit agency. EDC's mandate is to support and develop Canada's trade, and the capacity of Canadian companies to participate in and respond to international business opportunities. EDC's knowledge and partnerships are used by more than 7,300 Canadian companies and their global customers in more than 140 markets worldwide each year. A Crown corporation accountable to Parliament through the Minister of International Trade, EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis. For additional information visit www.edc.ca.
Cathedral Energy Services Ltd. (the "Company" or "Cathedral"), based in Calgary, Alberta is incorporated under the Business Corporations Act (Alberta) and operates in the U.S. under Cathedral Energy Services Inc. The Company is publicly traded on the Toronto Stock Exchange under the symbol "CET". Cathedral, is a trusted partner to North American energy companies requiring high performance directional drilling services and dependable flowback and production testing solutions. We work in partnership with our customers to tailor our equipment and expertise to meet their specific geographical and technical needs. Our experience, technologies and responsive personnel enable our customers to achieve higher efficiencies and lower project costs. For more information, visit www.cathedralenergyservices.com.
This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements relating to, among other things, Cathedral's anticipated credit facility availability as at December 31, 2016 and March 31, 2017, the anticipated maturity date of Cathedral's credit facility, the various forms of strategic alternatives transactions that may be considered and/or approved by Cathedral and the intended timing of future disclosure with respect to development related to the strategic alternatives process. Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to the Company, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this press release in connection with the forward-looking statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to the performance of Cathedral's businesses, including current business and economic trends, oil and natural gas commodity prices and production levels, and the ability of Cathedral to obtain and retain timely financing on acceptable terms. Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in the Company's Annual Information Form under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise. All forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current Annual Information Form and Annual Report which have been filed with Canadian provincial securities commissions and are available on www.sedar.com.
SOURCE Cathedral Energy Services Ltd.
For further information: P. Scott MacFarlane, President and Chief Executive Officer or Michael F. Hill, Chief Financial Officer: Cathedral Energy Services Ltd., 6030 3 Street S.E., Calgary, Alberta T2H 1K2, Telephone: 403.265.2560, Fax: 403.262.4682, www.cathedralenergyservices.com