Phoenix Oilfield Hauling Inc.
TSX VENTURE : PHN

Phoenix Oilfield Hauling Inc.

December 07, 2009 17:32 ET

Phoenix Oilfield Hauling Updates Debt Restructuring and Private Placement

CALGARY, ALBERTA--(Marketwire - Dec. 7, 2009) - Phoenix Oilfield Hauling Inc. ("Phoenix" or the "Company") (TSX VENTURE:PHN) is pleased to update its capital restructuring and private placement, as previously announced in its press releases dated September 30 and October 8, 2009.

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 $11,566,000 into common shares of the Company (the "Capital Restructuring") upon the satisfaction of certain conditions, including but not limited to, the closing of the minimum Private Placement (described below). The debt is being converted at $0.15 per common share, which is a 187.5% premium to the closing price of the Phoenix common shares on December 7, 2009 of $0.08. As part of the Capital Restructuring, Werklund Co. will be granted a second seat on the Board of Directors and will have the exercise price of its 5,000,000 warrants of the Company currently outstanding reduced from the current exercise price of $0.35 to an exercise price of $0.15 per share, subject to regulatory approval.

Following completion of the Capital Restructuring and the minimum Private Placement (described below) Werklund Co. will own approximately 62.8 million common shares or approximately 38% of the issued and outstanding common shares of the Company and Leo Co. will own approximately 30.2 million common shares or approximately 18.5% 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 a minimum of $2.0 million in equity (the "Private Placement"). The Company intends to offer, on a private placement basis, a minimum of 25,000,000 subscription receipts of the Company ("Subscription Receipts") and a maximum of 62,500,000 Subscription Receipts at a price of $0.08 per Subscription Receipt for aggregate gross proceeds of a minimum of $2,000,000 and a maximum of $5,000,000. Each Subscription Receipt entitles the holder thereof to receive, for no additional consideration, one common share of the Company upon completion of the Capital Restructuring. Once the Capital Restructuring including the completion of the minimum Private Placement of $2,000,000 is completed and the Subscription Receipts are exchanged for Common Shares, the remaining Private Placement up to the maximum of $5,000,000 will be common shares at a price of $0.08 per share. If the Capital Restructuring is not completed by February 5, 2010, then the gross proceeds of the Private Placement will be returned to the purchasers of the Subscription Receipts on a pro rata basis.

The Capital Restructuring and minimum Private Placement are expected to close on or about December 31, 2009. The proceeds from the Private Placement will be used for general corporate purposes. 

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 be required 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) 991-9200
    or
    Phoenix Oilfield Hauling Inc.
    Doug Eger
    Chief Financial Officer
    (780) 991-9200
    or
    Phoenix Oilfield Hauling Inc.
    700 - 15th Avenue S.W.
    Nisku, Alberta
    T9E 7S2