Total Energy Services Inc.
TSX : TOT

Total Energy Services Inc.

January 18, 2011 16:43 ET

Total Energy Services Inc. Announces $60,000,000 Public Offering of Convertible Unsecured Subordinated Debentures

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Total Energy Services Inc. ("Total" or the "Company") (TSX:TOT) announced today that it has reached an agreement with a syndicate of underwriters (the "Underwriters") co-led by CIBC World Markets Inc. and RBC Capital Markets, pursuant to which Total has agreed to issue, on a "bought deal" basis, $60,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering"). The agreement entered into with the Underwriters provides that: (i) the Debentures will bear interest from the date of issue at 5.75% per annum, with interest payable semi-annually in arrears on March 31 and September 30 each year (each an "Interest Payment Date") commencing March 31, 2011; (ii) the Debentures will mature and be repayable on March 31, 2016 (the "Maturity Date"); and (iii) Total may, in certain circumstances, pay accrued interest on the Debentures with the proceeds of common shares sold by a trustee on behalf of Total.

Total has granted to the Underwriters an overallotment option to purchase up to an additional $9,000,000 aggregate principal amount of Debentures at the same price (but subject to adjustment for accrued interest), exercisable in whole or in part at any time for a period of up to 30 days following closing of the Offering, to cover over-allotments.

Total intends to use the net proceeds from the Offering to repay existing revolving term bank debt and for general corporate purposes.

Each $1,000 principal amount of the Debentures will be convertible at the option of the holder at any time prior to the close of business on the earlier of the Maturity Date and the last business day immediately preceding the date fixed for redemption, into 44.6429 common shares of Total, representing a conversion price of $22.40 (the "Conversion Price"), subject to certain anti-dilution provisions. Holders who convert their Debentures will receive accrued and unpaid interest for the period from the date of the latest Interest Payment Date to the date of conversion.

The Debentures will not be redeemable at the option of the Company on or before March 31, 2014. After March 31, 2014 and on or before March 31, 2015, the Debentures may be redeemed in whole or in part from time to time at the option of the Company on not more than 60 days and not less than 30 days prior notice, at a price equal to their principal amount plus accrued and unpaid interest, provided that the weighted average trading price of the common shares on The Toronto Stock Exchange (the "TSX") for the 20 consecutive trading days ending five trading days preceding the date on which the notice of redemption is given is at least 125% of the Conversion Price. After March 31, 2015, the Debentures may be redeemed in whole or in part from time to time at the option of the Company on not more than 60 days and not less than 30 days prior notice, at a price equal to their principal amount plus accrued and unpaid interest.

The agreement entered into with the Underwriters contemplates that the Debentures will be offered by Total under a short form prospectus to be filed in each of the provinces of Canada, other than Nova Scotia and Québec. Closing of the Offering is expected to occur on or about February 9, 2011. Completion of the Offering is subject to the satisfaction or waiver of various conditions, such as the receipt of normal regulatory approvals, including approval of the TSX.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Total in the United States. The Debentures described in this news release (and any common shares of Total issued upon the conversion, redemption or maturity of the Debentures) have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state and may not be offered, sold or delivered in the United States absent an exemption from registration.

Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".

READER ADVISORY – FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking information (referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", ""intend", "expect", "may", "will", "should", or similar words suggesting future activities, circumstances or outcomes. In particular, this news release contains forward-looking statements relating to: (1) the anticipated terms of the Debentures; (2) the anticipated use of the net proceeds from the sale of the Debentures; (3) the proposed distribution of the Debentures pursuant to a short form prospectus to be filed in various provinces of Canada; and (4) the anticipated closing date of the Offering.

Forward-looking statements are based upon the opinions and expectations of management of Total as at the effective date of such statements and, in some cases, information supplied by third parties. Although Total believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as completion risk in respect of the Offering, changes in general economic and industry conditions in Canada and elsewhere, disruptions in domestic or international financial markets and new laws and regulations (domestic and foreign).

Forward-looking statements concerning (1) the anticipated terms of the Debentures; (2) the anticipated use of the net proceeds of the sale of the Debentures; (3) the proposed distribution of the Debentures pursuant to a short form prospectus to be filed with securities commissions in various provinces of Canada; and (4) the anticipated closing date of the Offering are all based upon certain factors and assumptions, including the terms of the agreement entered into between Total and the Underwriters, that all required third-party and regulatory approvals will be received in a timely manner and in form and substance satisfactory to Total and advice received from certain advisors to Total with respect to various critical dates associated with the Offering.

The forward-looking statements contained in this news release are made as of the date hereof and Total does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable Canadian securities laws. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

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