Phoenix Oilfield Hauling Inc.
TSX VENTURE : PHN

Phoenix Oilfield Hauling Inc.

September 30, 2009 16:30 ET

Phoenix Oilfield Hauling Announces Debt Restructuring and Private Placement

CALGARY, ALBERTA--(Marketwire - Sept. 30, 2009) - Phoenix Oilfield Hauling Inc. ("Phoenix" or the "Company") (TSX VENTURE:PHN) is pleased to announce a series of steps, consisting of a capital restructuring along with a private placement, that will position the Company to take advantage of opportunities available in the oilfield hauling service industry as well as position the Company for long term growth and profitability. Phoenix has formed a Special Committee of the Board of Directors ("Special Committee") in order to review the proposed capital restructuring and private placement. The Special Committee has retained Blackmont Capital Inc. as financial advisor.  

Capital Restructuring

Werklund Capital Corp., an entity owned by David Werklund, Chairman of Phoenix, ("Werklund Co.") and 1222472 Alberta Ltd. ("Leo Co"), an entity owned by Leo Provencher, President and CEO of Phoenix, have together agreed to convert their combined existing subordinated debt, including accrued interest, of approximately $11,000,000 into approximately 55,000,000 million common shares of the Company. The subordinated debt is being converted at $0.20 per common share, which is a 166% premium to the closing price of the Phoenix common shares on September 29, 2009 of $0.075. David Werklund is the holder, directly or indirectly, of approximately 3 million shares of the Company (approximately 4% of the issued and outstanding shares of the Company prior to the transactions announced today). Leo Provencher is the holder, directly or indirectly, of 12.5 million shares of the Company (approximately 19% of the issued and outstanding shares of the Company prior to the transactions announced today).

Following completion of the Capital Restructuring and the Private Placement (described below) Werklund Co. will own approximately 45 million common shares or approximately 32% of the issued and outstanding common shares of the Company and Leo Co. will own approximately 26 million common shares or approximately 18% of the issued and outstanding common shares of the Company.

Private Placement

As part of the agreement to complete the Capital Restructuring, Werklund Co. and Leo Co. have made it a condition of closing that the Company raise an additional $2.0 million in equity (the "Private Placement"). The Private placement is contemplated to be on a non-brokered basis. The proceeds from the Private Placement will be used for general corporate purposes.

Following completion of the Capital Restructuring, the Company's capital structure will consist of approximately $23 million of long term debt, including current portion, $1 million of cash and 142 million shares outstanding.

The Capital Restructuring and the Private Placement are subject to the approval of the TSX Venture Exchange Inc. (the "TSXV") and the receipt of all other necessary regulatory approvals.

ABOUT PHOENIX OILFIELD HAULING INC.

Phoenix is a public energy services corporation operating in Western Canada and which trades on the TSXV under the symbol "PHN".

Note Regarding Forward-Looking Statements

This news release contains forward-looking statements relating to the completion of the Capital Restructuring in order to take advantage of opportunities available in the current environment, the Company's growth and business plans and business opportunities. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. These statements are based on certain factors and assumptions regarding the receipt of necessary regulatory approvals, expected growth, results of operations, performance, business prospects and opportunities. While we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. By their nature, forward-looking statements involve numerous risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation, risks associated with a failure to obtain the necessary approvals to complete the Capital Restructuring, the ongoing participation of the Company's current lenders, the failure to replace the Company's existing credit facility, capital spending in the oil and gas sector, loss of markets, volatility of commodity prices, currency fluctuations, the demand for the Company's services, environmental risks, competition, inability to retain personnel and customers, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive. Although Phoenix believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward looking statements. The forward-looking statements contained in this news release are made as the date of this new release and the company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may berequired by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Phoenix Oilfield Hauling Inc.
    Leo Provencher
    President and Chief Executive Officer
    (780) 955-8840
    or
    Phoenix Oilfield Hauling Inc.
    Doug Eger
    Chief Financial Officer
    (780) 955-8840
    or
    Phoenix Oilfield Hauling Inc.
    700 - 15th Avenue S.W.
    Nisku, Alberta
    T9E 7S2