North American Energy Partners Inc.

North American Energy Partners Inc.

February 28, 2005 23:59 ET

North American Energy Partners Inc.: News Release

North American Energy Partners Inc.: News Release

ACHESON, ALBERTA--(CCNMatthews - Feb. 28, 2005) - North American Energy Partners
Inc.'s (the Company") previously disclosed review of its financial statements
for the fiscal quarters ended June 30, 2004 and September 30, 2004 is ongoing.
The Company continues to believe that a restatement of those two quarters will
be necessary. Additionally, the Company is continuing its related review of its
system of internal controls. Because the review and restatement of those
quarters must be completed before the Company can complete and release its
financial statements for the quarter ended December 31, 2004, the Company will
not be able to release its financial statements for the quarter ended December
31, 2004 by March 1, 2005. As a result, the Company will not be in compliance
with a covenant in the indenture governing its 8-3/4% senior notes due 2011.
Accordingly, the Company will be advising the trustee under the indenture of
this fact and that it expects to correct the matter by filing its restated
financial statements for the fiscal quarters ended June 30, 2004 and September
30, 2004, as well as its financial statements for the fiscal quarter ended
December 31, 2004, before the matter can develop into an Event of Default under
the indenture.

In addition to the waivers previously provided by the lending banks under the
Company's senior secured credit agreement with respect to potential defaults
under the credit agreement, they have waived the similar covenant contained in
the senior secured credit agreement relating to the delivery of the December 31,
2004 financial statements by March 1, 2005, as well as any default that would
arise under the credit agreement as a result of being out of compliance with the
corresponding indenture covenant requiring delivery of the December 31, 2004
financial statements by March 1, 2005. The waiver of the default under the
credit agreement will extend until the earlier of March 31, 2005, or until the
lack of compliance becomes an Event of Default, as that term is defined in the
indenture.

As previously reported, during the waiver period currently provided by the
lending banks under the senior secured credit agreement, they will not provide
any additional funding. While the Company expects to be able to fund its cash
needs during this period, including the scheduled Cdn $2.75 million term loan
payment due February 28, 2005, with cash on hand and cash provided by
operations, it is continuing to explore alternatives to satisfy its long-term
cash needs.

This document contains forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause future actions, conditions or events to differ materially from the
anticipated actions, conditions or events expressed or implied by such forward-
looking statements. Forward-looking statements included in this document include
statements regarding: the anticipated results of management's review of the
Company's previously reported financial statements and the reporting and effect
of any restated financial statements; the effectiveness of the Company's
internal controls in future periods; the Company's ability to comply with, its
potential to breach or its ability to receive further waivers or amendments from
the lenders under the Company's credit agreement; and potential alternative
financing arrangements. Factors that could cause actual results to vary from
those in the forward-looking statements include: unanticipated discoveries in
the financial review process; changes in oil and gas prices; decreases in
outsourcing work by the Company's customers; shut-downs or cutbacks at major
businesses that use the Company's services; changes in laws or regulations,
third party relations and approvals, and decisions of courts, regulators and
governmental bodies that may adversely affect the Company's business or the
business of the customers the Company serves; the Company's ability to obtain
surety bonds as required by some of its customers; the Company's ability to
retain a skilled labor force; the Company's ability to continue to bid
successfully on new projects and accurately forecast costs associated with unit
price or lump sum contracts; provincial, regional and local economic,
competitive and regulatory conditions and developments; technological
developments; capital markets conditions; inflation rates; foreign currency
exchange rates; interest rates; weather conditions; the timing and success of
business development efforts; and the Company's ability to successfully identify
and acquire new businesses and assets and integrate them into its existing
operations and the other risk factors set forth in the Company's most recent
Annual Report on Form 20-F filed with the Securities and Exchange Commission.
You are cautioned not to put undue reliance on any forward-looking statements,
and the Company undertakes no obligation to update those statements.

North American Energy Partners Inc. is one of the largest providers of mining
and site preparation, piling and pipeline installation services in western
Canada.


Contact Information

  • North American Energy Partners Inc.
    Bernie Robert
    Assistant Treasurer
    (780) 960-2266
    Email: brobert@nacg.ca