SHLE:CC - Source Energy Services Announces Decision To Utilize Interest Payment Grace Period
(TheNewswire)
Calgary, Alberta – TheNewswire - (May16, 2022) ( TSX:SHLE ) - Source EnergyServices Ltd. (“Source”or the “Company”) announced today that it has elected to utilizethe 30-day grace period (the “Grace Period”) under the indenturegoverning its 10.5% senior secured first lien notes due March 15,2025 (the “Senior Notes”). The Company is utilizing the GracePeriod to permit the continuation andconclusion of discussions with the syndicate oflenders under its senior secured credit facility (the “CreditFacility”) to obtain a waiver from such lenders related to thepayment of the cash interest payment due on May 16, 2022, inconnection with the Senior Notes (the “May InterestPayment”). The Company does not expect to utilize the Grace Periodin its entirety and anticipates concluding its discussions with thelenders imminently.
While the Company has not disbursed the CAD $4.2 million May InterestPayment, the Company has ample liquidity available to fund thedisbursement, with $18.9 million of liquidity available as of the dateof this release. The Company is current with all its suppliers,industry partners and contractors and intends to remain so. Neitherthe utilization of any portion of the Grace Period nor the terms ofthe waiver contemplated would affect any of the Company’soperations, or commercial obligations.
The election to not make the May Interest Payment on the scheduleddate does not constitute an event of default under the indenture thatgoverns the Senior Notes, or the credit agreement that governs theCredit Facility, until the expiry of the Grace Period.
Source is a company that focuses on the integratedproduction and distribution of high quality frac sand, as well as thedistribution of other bulk completion materials not produced bySource. Source provides its customers with an end-to-end solution forfrac sand supported by its Wisconsin and Peace River mines andprocessing facilities, its Western Canadian terminal network, its“last mile” logistics capabilities and Sahara, a proprietarywellsite mobile sand storage and handling system.
Source’s full-service approach allows customers to rely on itslogistics platform to increase reliability of supply and to ensure thetimely delivery of frac sand and other bulk completion materials atthe wellsite.
Certain statements contained in this press releaseconstitute forward-looking statements relating to, without limitation,expectations, intentions, plans and beliefs, including information asto the future events, results of operations and Source’s futureperformance (both operational and financial) and business prospects.In certain cases, forward- looking statements can be identified by theuse of words such as “expects”, “estimates”,“anticipates”, “believes”, “continues”, “focus” orvariations of such words and phrases, or state that certain actions,events or results “may” or “will” be taken, occur or beachieved. Such forward-looking statements reflect Source’s beliefs,estimates and opinions regarding its future growth, results ofoperations, future performance (both operational and financial), andbusiness prospects and opportunities at the time such statements aremade, and Source undertakes no obligation to update forward-lookingstatements if these beliefs, estimates and opinions or circumstancesshould change unless required by applicable law. Forward-looking statements are necessarily basedupon a number of estimates and assumptions made by Source that areinherently subject to significant business, economic, competitive,political and social uncertainties and contingencies. Forward-lookingstatements are not guarantees of future performance. In particular,this press release contains forward-looking statements pertaining, butnot limited, to: Source’s discussions with its debtholders andlenders and Source’s expectation that it will remain current with all its suppliers, industry partners andcontractors during the Grace Period.
By their nature, forward-looking statements involve numerous currentassumptions, known and unknown risks, uncertainties and other factorswhich may cause the actual results, performance or achievements ofSource to differ materially from those anticipated by Source anddescribed in the forward-looking statements.
With respect to the forward-looking statementscontained in this press release assumptions have been made regarding,among other things: proppant market prices; future oil, natural gasand liquefied natural gas prices; future global economic and financialconditions; future commodity prices, demand for oil and gas and theproduct mix of such demand; levels of activity in the oil and gasindustry in the areas in which Source operates; the continuedavailability of timely and safe transportation for Source’sproducts, including without limitation, Source’s rail car fleet andthe accessibility of additional transportation by rail and truck; themaintenance of Source’s key customers and the financial strength ofits key customers; the maintenance of Source’s significant contractsor their replacement with new contracts on substantially similar termsand that contractual counterparties will comply with currentcontractual terms; operating costs; that the regulatory environment inwhich Source operates will be maintained in the manner currentlyanticipated by Source; future exchange and interest rates; geologicaland engineering estimates in respect of Source’s resources; therecoverability of Source’s resources; the accuracy and veracity ofinformation and projections sourced from third parties respecting,among other things, future industry conditions and product demand;demand for horizontal drilling and hydraulic fracturing and themaintenance of current techniques and procedures, particularly withrespect to the use of proppants; Source’s ability to obtainqualified staff and equipment in a timely and cost-efficient manner;the regulatory framework governing royalties, taxes and environmentalmatters in the jurisdictions in which Sourceconducts its business and any other jurisdictions in which Source mayconduct its business in the future; future capital expenditures to bemade by Source; future sources of funding for Source’s capitalprogram; Source’s future debt levels; the impact of competition onSource; and Source’s ability to obtain financing onacceptable terms.
A number of factors, risks and uncertainties could cause results todiffer materially from those anticipated and described hereinincluding, among others: the effects of competition and pricingpressures; risks inherent in key customer dependence; effects offluctuations in the price of proppants; risks related to indebtednessand liquidity, including Source’s leverage, restrictive covenants inSource’s debt instruments and Source’s capital requirements; risksrelated to interest rate fluctuations and foreign exchange ratefluctuations; changes in general economic, financial, market andbusiness conditions in the markets in which Source operates; changesin the technologies used to drill for and produce oil and natural gas;Source’s ability to obtain, maintain and renew required permits,licenses
and approvals from regulatory authorities; the stringent requirementsof and potential changes to applicable legislation, regulations andstandards; the ability of Source to comply with unexpected costs ofgovernment regulations; liabilities resulting from Source’soperations; the results of litigation or regulatory proceedings thatmay be brought against Source; the ability of Source to successfullybid on new contracts and the loss of significant contracts; uninsuredand underinsured losses; risks related to the transportation ofSource’s products, including potential rail line interruptions or areduction in rail car availability; the geographic and customerconcentration of Source; the impact of climate change risk; theability of Source to retain and attract qualified management and staffin the markets in which Source operates; labor disputes and workstoppages and risks related to employee health and safety; generalrisks associated with the oil and natural gas industry, loss ofmarkets, consumer and business spending and borrowing trends; limited,unfavorable, or a lack of access to capital markets; uncertaintiesinherent in estimating quantities of mineral resources; sandprocessing problems; implementation of recently issued accountingstandards; the use and suitability of Source’s accounting estimatesand judgments; the impact of information systems and cyber securitybreaches; and risks and uncertainties related to COVID-19 or itsvariants, including changes in energy demand.
Although Source has attempted to identify importantfactors that could cause actual actions, events or results to differmaterially from those described in the forward-looking statements,there may be other factors that cause actions, events or results notto be as anticipated, estimated or intended. There can be no assurancethat forward-looking statements will materialize or prove to beaccurate, as actual results and future events could differ materiallyfrom those anticipated in such statements. The forward-lookingstatements contained in this press release are expressly qualified bythis cautionary statement. Readers should not place undue reliance onforward-looking statements. These statements speak only as of the dateof this press release. Except as may be required by law, Source expressly disclaims anyintention or obligation to revise or update any forward-lookingstatements or information whether as a result of new information,future events or otherwise.
Any financial outlook and future-oriented financialinformation contained in this press release regarding prospectivefinancial performance, financial position or cash flows is based onassumptions about future events, including economic conditions andproposed courses of action based on management’s assessment of therelevant information that is currently available. Projectedoperational information contains forward-looking information and isbased on a number of material assumptions and factors, as are set outabove. These projections may also be considered to contain futureoriented financial information or a financial outlook. The actualresults of Source’s operations for any period will likely vary fromthe amounts set forth in these projections and such variations may bematerial. Actual results will vary from projected results. Readers arecautioned that any such financial outlook and future-orientedfinancial information contained herein should not be used for purposesother than those for which it is disclosed herein. The forward-lookinginformation and statements contained in this document speak only as ofthe date hereof and have been approved by the Company’s managementas at the date hereof. The Company does not assume any obligation topublicly update or revise them to reflect new events or circumstances,except as may be required pursuant to applicable laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Scott Melbourn
Chief Executive Officer
(403) 262-1312 (ext. 222)
investorrelations@sourceenergyservices.com
Derren Newell
Chief Financial Officer
(403) 262-1312 (ext. 233)
investorrelations@sourceenergyservices.com
Copyright (c) 2022 TheNewswire - All rights reserved.