SHLE:CC - Source Energy Services Announces Receipt of Lender Waiver and Payment of Cash Interest
(TheNewswire)
Calgary, Alberta – TheNewswire - (May 25, 2022) ( TSX:SHLE ) - Source Energy Services Ltd. (“Source” or the “Company”) announcedtoday that it has successfully concluded its discussions with thesyndicate of lenders under its senior secured credit facility (the“Credit Facility”) and obtained a waiver from such lenders topermit the Company to make the payment of cash interest on theCompany’s outstanding 10.5% senior secured first lien notes dueMarch 15, 2025 (the “Senior Notes”). As previously announced, theCompany had elected to utilize the 30 day grace period (the “GracePeriod”) under the indenture governing its Senior Notes (the“Indenture”) to permit the Company to obtain such waiver and, asthe waiver has now been obtained from the Company’s lenders, theCompany has deposited with the trustee under the Indenture, in cash,the CAD$4.2 million interest payment that was due on May 16, 2022 inconnection with the Senior Notes (the “May InterestPayment”).
The Company remains current with all its suppliers, industry partnersand contractors and intends to remain so. Neither the utilization ofthe Grace Period nor the terms of the waiver affected, or will affect,any of the Company's operations, or commercial obligations.
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 release constituteforward-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-lookingstatements are necessarily based upon a number of estimates andassumptions made by Source that are inherently subject to significantbusiness, economic, competitive, political and social uncertaintiesand contingencies. Forward-looking statements are not guarantees offuture performance. In particular, this press release containsforward-looking statements pertaining, but not limited, to: Source’sexpectation that it will remain current with all its suppliers,industry partners and contractors.
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 Source conducts its business andany other jurisdictions in which Source may conduct its business inthe future; future capital expenditures to be made by Source; futuresources of funding for Source’s capital program; Source’s futuredebt levels; the impact of competition on Source; and Source’sability to obtain financing on acceptable 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 stringentrequirements of and potential changes to applicable legislation,regulations and standards; the ability of Source to comply withunexpected costs of government regulations; liabilities resulting fromSource’s operations; the results of litigation or regulatoryproceedings that may be brought against Source; the ability of Sourceto successfully bid on new contracts and the loss of significantcontracts; uninsured and underinsured losses; risks related to thetransportation of Source’s products, including potential rail lineinterruptions or a reduction in rail car availability; the geographicand customer concentration of Source; the impact of climate changerisk; the ability of Source to retain and attract qualified managementand staff in the markets in which Source operates; labor disputes andwork stoppages and risks related to employee health and safety;general risks associated with the oil and natural gas industry, lossof markets, consumer and business spending and borrowing trends;limited, unfavorable, or a lack of access to capital markets;uncertainties inherent in estimating quantities of mineral resources;sand processing 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 important factors that couldcause actual actions, events or results to differ materially fromthose described in the forward-looking statements, there may be otherfactors that cause actions, events or results not to be asanticipated, estimated or intended. There can be no assurance thatforward-looking statements will materialize or prove to be accurate,as actual results and future events could differ materially from thoseanticipated in such statements. The forward-looking statementscontained in this press release are expressly qualified by thiscautionary 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, Sourceexpressly disclaims any intention or obligation to revise or updateany forward-looking statements or information whether as a result ofnew information, future events or otherwise.
Any financial outlook and future-oriented financial informationcontained in this press release regarding prospective financialperformance, financial position or cash flows is based on assumptionsabout future events, including economic conditions and proposedcourses of action based on management’s assessment of the relevantinformation that is currently available. Projected operationalinformation contains forward-looking information and is based on anumber of material assumptions and factors, as are set out above.These projections may also be considered to contain future orientedfinancial information or a financial outlook. The actual results ofSource’s operations for any period will likely vary from the amountsset forth in these projections and such variations may be material.Actual results will vary from projected results. Readers are cautionedthat any such financial outlook and future-oriented financialinformation contained herein should not be used for purposes otherthan 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
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