(TheNewswire)
Calgary, Alberta - TheNewswire - November 18, 2020 - Source Energy Services Ltd. (together with its affiliates," Source " or the " Company ") ( TSX:SHLE) announced today that it has received strong voting supportfrom holders of its Notes (the " Noteholders ")for its previously announced recapitalization transaction (the" RecapitalizationTransaction ") to be implemented pursuant toa corporate plan of arrangement (" Plan of Arrangement ") under the Canada Business Corporations Act (the" CBCA ").
As of the close of business onNovember 18, 2020, Noteholders holding 98% of the Company's 10.5% senior secured notes due 2021 (the" Notes ") have cast votes in respect of the Plan ofArrangement, with 100% of the votes having beencast in favour of approval of the Plan of Arrangement.
As further described in the Company's managementinformation circular dated November 2, 2020 (the " Information Circular ") and its press release issued on October 26, 2020 (the" October 26 PressRelease "), each Noteholder that votes infavour of the Plan of Arrangement by 5:00 p.m. (Calgary time) onNovember 18, 2020 (or such later date as may be determined by theCompany in consultation with the Initial Consenting Noteholders, the" Early ConsentDate ") will be entitled to receive, inaddition to the consideration provided to all Noteholders under thePlan of Arrangement, its pro rata share(determined based on the total principal amount of Notes held by suchNoteholder as a percentage of the aggregate principal amount of Notesoutstanding) of additional new first lien secured notes due 2025 in aprincipal amount equal to all accrued interest on the Notes from June16, 2020 to the closing of the Recapitalization Transaction (the" Early ConsentConsideration ").
Notwithstanding the overwhelming support received todate from Noteholders, in the interests of providing all Noteholderswith additional time to become entitled to receive Early ConsentConsideration, the Company is extending the Early Consent Date to 5:00pm (Calgary time) on November 23, 2020. Any Noteholder that votes infavour of the Plan of Arrangement by 5:00 p.m. (Calgary time) onNovember 23, 2020 will be entitled to receive Early ConsentConsideration pursuant to the Plan of Arrangement. Noteholders whohave already cast their votes in favour of the Plan of Arrangement donot need to take any action. Source and its board of directorsencourage all Noteholders and holders of common shares (the" Shareholders ") who have not yet voted to vote in favour of the Planof Arrangement.
Banks, brokers or other intermediaries (each an" Intermediary ") may have internal deadlines that require certainsecurityholders to submit their votes to such Intermediary by anearlier date in advance of the Voting Deadline and Early ConsentDeadline, and may have internal requirements for the submission ofsuch voting instructions. Securityholders are encouraged to contacttheir Intermediaries directly to confirm any such internal deadline orvoting instruction requirements.
Source will hold meetings of its Noteholders andShareholders (the " Meetings ") to vote on resolutionsapproving the Recapitalization Transaction, which Meetings arescheduled to be held on November 25, 2020. Pursuant to the interimorder of the Court of Queen's Bench of Alberta dated October 26, 2020,any Noteholder or non-registered Shareholder wishing to vote mustsubmit its voting instructions prior to November 23, 2020 at 5:00 p.m.(Calgary time) (the " Voting Deadline ").
Further information regarding, among other things,voting and early consent matters, as well as the Meetings scheduledfor November 25, 2020 in respect of the Plan of Arrangement, is setout in the Information Circular and the October 26 Press Release. Any questions or requests forfurther information, including assistance in providing votinginstructions, may be directed to Kingsdale Advisors, the Company'sproxy, information and exchange agent, at 1-800-749-9890 or416-867-2272, or by email at contactus@kingsdaleadvisors.com.
The securities to be issued pursuant to theRecapitalization Transaction have not been and will not be registeredunder the U.S. Securities Actof 1933 (the " 1933 Act "), orthe securities laws of any state of the United States, and may not beoffered or sold within the United States except pursuant to anexemption from the registration requirements of the 1933 Act. Thesecurities to be issued to Noteholders pursuant to theRecapitalization Transaction will be issued and distributed inreliance on the exemption from registration setforth in Section 3(a)(10) of the 1933 Act (and similar exemptionsunder applicable state securities laws).
ABOUT SOURCE ENERGY SERVICES
Source is a logistics company that focuses on thesupply and distribution of high quality Northern White frac sand.Source provides its customers with a full end-to-end solutionsupported by its Wisconsin mines and processing facilities, itsWestern Canadian terminal network and its "last mile"logistics capabilities. In addition to its industry leading frac sandtransload terminal network and in-basin frac sand storagecapabilities, Source also provides storage and logistics services forother bulk oil and gas well completion materials that are not producedby Source. Source has also developed Sahara, a proprietary wellsitemobile sand storage and handling system.
Source's full-service approach allows customers to relyon its logistics capabilities to increase reliability of supply and toensure the timely delivery of their requirements for frac sand andother bulk completion materials at the wellsite.
For further information, pleasecontact:
Media Inquiries: Investor Relations Inquiries:
Meghan Somers BradThomson
Communications Advisor Chief Executive Officer
(403) 262-1312 (ext. 295) (403) 262-1312 (ext.225)
communications@sourceenergyservices.com investorrelations@sourceenergyservices.com
FORWARD-LOOKING STATEMENTS
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, the Recapitalization Transaction, the Plan ofArrangement, the voting results at the Meetings, results of operationsand Source's future performance (both operational and financial) andbusiness prospects. In certain cases, forward-looking statements canbe identified by the use of words such as "expects","estimates", "forecasts", "intends","anticipates", "believes", "plans","seeks", "projects" or variations of such wordsand phrases, or state that certain actions, events or results"may" or "will" be taken, occur or be achieved.Such forward-looking statements reflect Source's beliefs, estimatesand opinions regarding the Recapitalization Transaction and relatedtransactions, the CBCA proceedings and the Meetings, Source's futuregrowth, results of operations, future performance (both operationaland financial), and business prospects and opportunities at the timesuch statements are made, and Source undertakes no obligation toupdate forward-looking statements if these beliefs, estimates andopinions or circumstances should change. Forward-looking statementsare necessarily based upon a number of estimates and assumptions madeby Source that are inherently subject to significant business,economic, competitive, political and social uncertainties andcontingencies. Forward-looking statements are not guarantees of futureperformance. In particular, this press release may containforward-looking statements pertaining, but not limited, to:expectations regarding the Recapitalization Transaction, including theterms, timing and implementation of the Recapitalization Transaction,expectations regarding demand for and sales volumes of sand in lightof the COVID-19 pandemic; expectations regarding the price ofproppants and sensitivity to changes in such prices; outlook foroperations and sales volumes; expectations respecting futurecompetitive conditions; industry activity levels; expectationsregarding market share; industry conditions pertaining to the fracsand industry; expectations regarding customer relationships andcounterparty risk; drilling and well completion activity in 2020;expectations regarding the impact of direct-source contracts; sandsales volumes and sand spot pricing in 2020; expectations regardingfuture working capital and capital expenditures; the ability to securefuture funding; expectations regarding fluctuations in foreigncurrency; expectations regarding the severity and outcome of legalclaims and proceedings; expectations regarding insurance coverage andproceeds; expectations regarding the impact of climate change; risksassociated with information systems and cyber security and operationalrisks. Statements relating to mineral resources are deemed to beforward looking-statements, as they involve the implied assessment,based on certain estimates and assumptions, that the mineral resourcesdescribed exist in the quantities predicted or estimated and that themineral resources described might be able to be profitably produced inthe future.
By their nature, forward-looking statements involvenumerous current assumptions, known and unknown risks, uncertaintiesand other factors which may cause the actual results, performance orachievements of Source to differ materially from those anticipated bySource and described in the forward-looking statements.
With respect to the forward-looking statementscontained in this press release, assumptions have been made regarding,among other things: the Recapitalization Transaction and the CBCAproceedings; proppant market prices; future oil, natural gas andnatural gas liquids 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's products,including without limitation, Source's rail car fleet and theaccessibility 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 obtain qualifiedstaff and equipment in a timely and cost-efficient manner; theregulatory 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 future debtlevels; the impact of competition on Source; and Source's ability toobtain financing on acceptable terms.
A number of factors, risks and uncertainties couldcause results to differ materially from those anticipated anddescribed herein including, among others: Source's ability to completethe Recapitalization Transaction and obtain requisite stakeholder andCourt approvals; the final terms, timing and implementation of theRecapitalization Transaction and related transactions; effects ofcompetition and pricing pressures; risks inherent in key customerdependence; effects of fluctuations in the price of proppants; risksrelated to indebtedness and liquidity, including Source's leverage,restrictive covenants in Source's debt instruments and Source'scapital requirements; risks related to interest rate fluctuations andforeign exchange rate fluctuations; changes in general economic,financial, market and business conditions in the markets in whichSource operates; changes in the technologies used to drill for andproduce oil and natural gas; Source's ability to obtain, maintain andrenew required permits, licenses and approvals from regulatoryauthorities; the stringent requirements of and potential changes toapplicable legislation, regulations and standards; the ability ofSource to comply with unexpected costs of government regulations;liabilities resulting from Source's operations; the results oflitigation or regulatory proceedings that may be brought againstSource; the ability of Source to successfully bid on new contracts andthe loss of significant contracts; uninsured and underinsured losses;risks related to the transportation of Source's products, includingpotential rail line interruptions or a reduction in rail caravailability; the geographic and customer concentration of Source; theimpact of climate change risk; the ability of Source to retain andattract qualified management and staff in the markets in which Sourceoperates; labour disputes and work stoppages and risks related toemployee health and safety; general risks associated with the oil andnatural gas industry, loss of markets, consumer and business spendingand borrowing trends; limited, unfavourable, or a lack of access tocapital markets; uncertainties inherent in estimating quantities ofmineral resources; sand processing problems; implementation ofrecently issued accounting standards; the use and suitability ofSource's accounting estimates and judgments; and the impact ofinformation systems and cyber security breaches.
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, 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.
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