/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/
CALGARY, March 28 /CNW/ - Western Energy Services Corp. ("Western") is
pleased to announce that it has entered into an agreement with Grenville
Energy Partnership ("Grenville") to acquire all of Grenville's oilfield
service equipment (the "Equipment") for the purchase price of $12.5 million.
The Equipment consists of all oilfield service equipment owned by Grenville
and operated by Western pursuant to its joint venture with Grenville, which
joint venture will terminate on closing. The purchase price will be paid using
$4.1 million from a new credit facility Western has negotiated with a Canadian
chartered bank, with the balance being paid by the issuance of a convertible
debenture (the "Debenture").
Jim McQuarrie, President and CEO of Western, states, "This transaction is
a key step in our plan to refocus Western into the more stable and less
cyclical market of production optimization through stimulation services. The
Grenville equipment purchase will double the size of our equipment fleet,
increase our top and bottom lines, and eliminate the complexity and extra
costs of operating under the joint venture agreement. Significantly, the debt
service costs of the new credit facility will be less than Western's revenue
sharing obligations to Grenville under the joint venture agreement."
The effective date of the purchase is January 1, 2007 and is expected to
close within the next 30 days. The transaction is subject to the approval of
the TSX Venture Exchange and Western entering into formal documentation with
The Debenture has a one year maturity, bears interest at 8%, payable
monthly, is convertible at the option of the holder into common shares of
Western at $0.20 per share, may be repaid by Western at any time without
penalty and is secured on a subordinated basis to Western's bank and its
bridge loan lender by equipment having a book value of approximately
$17 million. Western can force the conversion of the Debenture into common
shares upon raising at least $5 million in equity or having its shares trade
at an average of $0.30 or more for 20 consecutive trading days or meeting
certain earnings tests during fiscal 2007. If Western forces the conversion of
the Debenture, the conversion price will be the lesser of (A) $0.20, and (B)
120% of the weighted average issue price of the shares issued by Western in
meeting the conversion tests or the 20 day weighted average closing price of
Western's shares up to the date of conversion, whichever is greater. In no
event will the conversion price be less than $0.12 per share.
Western is an oil field services company trading on the TSX Venture
Exchange in Canada under the symbol "WSV". Western is active in Canada, Texas
and Latin America.
Forward Looking Information
This release contains certain forward-looking statements related but not
limited to the Western's expectations, intentions, plans and beliefs.
Investment advisors, shareholders and potential investors are cautioned not to
place undue reliance on forward-looking information which by its nature
involves assumptions, risks and uncertainties, both general and specific, that
contribute to the possibilities that predictions, projections, forecasts and
future events will not occur. Consequently, actual results could differ
materially from the expectations expressed in these forward-looking
statements. Western does not assume any responsibility to update this
information for events subsequent to its preparation.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: Additional information relating to the Company
is filed on SEDAR at www.sedar.com; Please visit the web site: www.wesc.ca or
contact: Jim McQuarrie, President & CEO, (403) 266-0667, or Investor Relations
at (403) 668-4880; If you would like to receive future information releases by
email please provide your email address to: email@example.com