/THIS RELEASE IS INTENDED FOR DISTRIBUTION OUTSIDE THE UNITED STATES ONLY
AND IS NOT AUTHORIZED FOR DISTRIBUTION WITHIN THE UNITED STATES/
ALICE, TX, Dec. 1 /CNW/ - Forbes Energy Services Ltd. ("Forbes" or the "Corporation")(TSX: FRB) is pleased to announce that it has entered into an agreement with Paradigm Capital Inc. (the "Underwriter") pursuant to which the Underwriter has agreed to purchase and offer to subscribers on a "bought deal" basis 18,750,000 common shares (21,562,500 if the Over-Allotment Option is exercised in full) (the "Common Shares")(the "Over-Allotment Option") of the Corporation at a price of $0.80 per Common Share for total gross proceeds to the Corporation of $15,000,000 ($17,250,000 if the Over-Allotment Option is exercised in full) (the "Offering"). The Offering will be made pursuant to a short form prospectus to be filed in all of the provinces of Canada, other than Quebec, and in other jurisdictions pursuant to applicable exemptions from registration and prospectus requirements. Certain directors and employees of Forbes, including senior management, will participate as investors in this Offering.
Proceeds of the Offering will be for equipment upgrades and working capital to expand Forbes' growth initiatives in Mexico and for general corporate purposes. Forbes believes there are strong business opportunities available in Mexico. The proceeds of this Offering will allow the Corporation to grow its Mexico business segment and possibly to capitalize on expanded activity in US shale gas development and overall increased industry activity levels. Closing of the Offering is subject to customary conditions, including approval by the TSX Exchange, and is expected to occur on or about December 17th, 2009.
About Forbes Energy
Forbes Energy Services Ltd. is an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas, Mississippi, Pennsylvania and Mexico.
Forward-Looking Information Advisory
This press release contains "forward-looking statements," as contemplated by the Private Securities Litigation Reform Act of 1995, including statements regarding the anticipating closing of the announced transaction, in which the Company discusses factors it believes may affect its performance in the future. The accuracy of the Company's assumptions, expectations, beliefs and projections depend on events or conditions that change over time and are thus susceptible to change based on actual experience, new developments and known and unknown risks. The Company gives no assurance that the forward-looking statements will prove to be correct and does not undertake any duty to update them. The Company's actual future results might differ from the forward-looking statements made in this press release for a variety of reasons, which include: supply and demand for oilfield services and the level of oil and natural gas prices; the continued uncertainty in the global financial markets and its effect on domestic spending in the oil and natural gas industry; the Company's ability to maintain pricing on its core services; the potential for excess capacity in the industry; and competition. Should one or more of the foregoing risks or uncertainties materialize, or should the Company's underlying assumptions prove incorrect, the Company's actual results may vary materially from those anticipated in its forward-looking statements, and the Company's business, financial condition and results of operations could be materially and adversely affected. Additional factors that you should consider are set forth in detail in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2008 (the "Form 10- K") as well as other filings the Company has made with the Securities and Exchange Commission.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States unless an exemption from registration is available. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities in the United States.
SOURCE PARADIGM CAPITAL INC.
For further information: For further information: Forbes Energy Services Ltd., L. Melvin Cooper, SVP & CFO, (361) 664-0549