CALGARY, Alberta, Nov. 25, 2021 (GLOBE NEWSWIRE) – Essential Energy Services Ltd. (TSX: ESN) (âEssentialâ or the âCompanyâ) announces that it has entered into the Second Amending Agreement to its June 26, 2018 Credit Facility Agreement (together with the First Amending Agreement, the âAmended Credit Facilityâ ) with a syndicate of lenders composed of the National Bank of Canada, ATB Financial and Canadian Western Bank (the âLendersâ). The Amended Credit Facility provides Essential with an extension of the maturity date of the secured revolving credit facility to November 30, 2024, as well as modifications to certain terms and conditions.
The main changes to the Modified Credit Facility include:
Extension of the due date from June 30, 2022 to November 30, 2024.
The amount that can be borrowed is $ 25 million. Prior to this change, the amount that could be borrowed was the lesser of (a) $ 25 million; (b) $ 15 million during the covenant relief period, which was scheduled to end on December 31, 2021; and (c) the calculation of the borrowing base. The covenants relief period and related restrictions as well as the borrowing base calculation have been removed.
Distributions, in the form of dividends or a normal course issuer bid, are now permitted provided that no event of default or event of default, as defined in the amended credit facility, occurs. continue or result from this distribution.
Financial covenants include:
The debt to capitalization ratio cannot exceed 50%.
The ratio of debt financed to EBITDA cannot exceed 3.5x.
The coverage rate for fixed charges must not be less than 1.25x.
The terms of calculating the restrictive covenants are as defined in the amended credit facility.
As of November 25, 2021, Essential had no long-term debt outstanding and a cash balance of $ 7.6 million.
âWith this cash balance, Essential is in a very strong financial position,â said Garnet Amundson, President and CEO. âEssential’s continued positive cash position is a strategic advantage as the industry moves into a period of expected growth. The amended credit facility continues to provide Essential with financial flexibility to support its operations. We thank the lenders for their support and commitment to Essential.
This press release contains “forward-looking statements” and “forward-looking information” (collectively referred to herein as “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements are statements which are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends to”. “,” Estimate “,” ongoing “,” projects “,” potential “,” budget “and similar expressions, or are events or conditions that” will “,” would “,” could “,” could “or” should âoccur or be achieved. This press release contains forward-looking statements regarding the business outlook for the industry, with Essential’s positive cash position being a strategic advantage and the financial flexibility afforded by the modified credit facility.
Although the Company believes that the important factors, expectations and assumptions expressed in these forward-looking statements are reasonable based on information available to it at the date on which these statements are made, one should not place undue reliance on forward-looking statements because the Company can give no assurance that such statements and information will prove to be correct and such statements are not guarantees of future performance. Because forward-looking statements deal with future events and conditions, by their very nature they involve inherent risks and uncertainties.
Actual performance and results could differ materially from those currently expected due to a number of factors and risks. These include, but are not limited to, known and unknown risks, including those set out in the Company’s Annual Information Form (a copy of which can be found under Essential’s profile on SEDAR at www.sedar.com). Therefore, readers should not place undue importance or place undue reliance on forward-looking statements. Readers are cautioned that the list of factors is not exhaustive.
The statements, including forward-looking statements, contained in this press release are made as of the date on which they are given and the Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether at the following new information, events or otherwise, unless required by applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect the operations and financial results of the Company is included in reports filed with applicable securities regulatory authorities and can be viewed under Essential’s profile on SEDAR at the address www.sedar.com.
Essential provides petroleum services to oil and gas producers, primarily in Western Canada. Essential provides well site completion, production and restoration services to a diverse customer base. Services are offered with coil tubing, pumping of fluids and nitrogen as well as the sale and rental of downhole tools and equipment. Essential offers one of the largest fleets of coil tubing in Canada. Further information can be found at www.essentialenergy.ca.
The TSX has neither approved nor disapproved the contents of this press release.
CONTACT: For further information, please contact: Garnet K. Amundson President and CEO Phone: (403) 513-7272 [email protected]