Western Energy Services Corp.
TSX VENTURE : WRG

December 16, 2009 19:20 ET

Western Energy Services Corp. Provides Update on Recapitalization Transaction

CALGARY, ALBERTA--(Marketwire - Dec. 16, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Western Energy Services Corp. ("Western" or the "Company") (TSX VENTURE:WRG) provides the following update on the previously announced reorganization and investment transaction (the "Transaction"). The specifics of the Transaction include the appointment of a new management team ("New Management"), a subsequent non-brokered private placement of up to $7.0 million, the conversion of the Company's existing bridge lending facility and subordinated convertible debentures (including the cancellation of the related common share purchase warrants) and other specified obligations into common shares of Western, and the appointment of a new board of directors. Western is pleased to announce that:

  • the New Management team led by Dale E. Tremblay, Alex MacAusland and Jeffrey K. Bowers has now joined and assumed the helm of the Company;
  • Western has also now received the requisite written consents from disinterested shareholders that hold more than 50 percent of the issued and outstanding voting shares of Western held by all disinterested shareholders. These disinterested shareholders provided their written consent to the creation, as part of the Transaction, of a new "Control Person", as defined in the policies of the TSX Venture Exchange (the "TSXV"). The receipt of such consents was a condition to the closing of the Transaction; and
  • the Transaction is anticipated to close on December 22, 2009 but remains subject to standard closing conditions, including the approval of the TSXV.

Further, Western has completed equipment sales for gross proceeds of approximately $900,000 and has applied the net sale proceeds against its senior secured bank facility, with the balance of this facility being now at approximately $4 million. Western has also entered into an additional binding agreement respecting other equipment sales, which transaction is expected to close within the next 30 days, for gross proceeds of approximately $825,000 (the "Additional Asset Sale"). Proceeds from the Additional Asset Sale transaction will be applied to the Company's debt such that following completion of the Transaction and the Additional Asset Sale, the Company will have no debt and approximately $2 million of positive working capital.

ABOUT WESTERN ENERGY SERVICES CORP.

Western is a public energy services corporation operating in Western Canada and which trades on the TSX Venture Exchange (TSXV) under the symbol "WRG".

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to the Company that are based on the expectations of its New Management as well as assumptions made by and information currently available to the Company which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology.

In particular most of the forward-looking statements in this press release are based on the assumption that the Transaction will be completed. There are a number of conditions set forth in the Transaction agreement which must be met in order for the Transaction to be completed and as a result there is a risk that the proposed Transaction will not be completed.

In addition, this press release states that the amount of the anticipated bank debt and working capital after completion of the Transaction and the Additional Asset Sale transaction are based on the assumption that both the Transaction and the Additional Asset Sale are each respectively closed. There is a risk that either the Transaction or the Additional Asset Sale will not close.

As such, many factors could cause the performance or achievement of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.

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

  • Western Energy Services Corp.
    Dale E. Tremblay
    Chief Executive Officer
    (403) 262-9439
    or
    Western Energy Services Corp.
    Alex MacAusland
    President & COO
    (403) 262-9013
    or
    Western Energy Services Corp.
    Jeffrey K. Bowers
    VP Finance & CFO
    (403) 262-9548