Total Energy Services Inc.
TSX : TOT

Total Energy Services Inc.

February 09, 2011 08:25 ET

Total Energy Services Inc. Completes $69,000,000 Public Offering of Convertible Unsecured Subordinated Debentures

CALGARY, ALBERTA--(Marketwire - Feb. 9, 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) is pleased to announce that it has closed its recently announced public offering of $69 million aggregate principal amount of 5.75% convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering"). The Offering was underwritten by a syndicate of underwriters co-led by CIBC World Markets Inc. and RBC Dominion Securities Inc. and included HSBC Securities (Canada) Inc., Cormark Securities Inc., Macquarie Capital Markets Canada Ltd., Paradigm Capital Inc., FirstEnergy Capital Corp., and Stifel Nicolaus Canada Inc. (collectively, the "Underwriters"). The Debentures sold by the Company in connection with the Offering included $9 million aggregate principal amount of Debentures that were distributed following the exercise of an over-allotment option granted to the Underwriters.

The Debentures bear interest at 5.75% per annum, payable semi-annually on March 31 and September 30 commencing on March 31, 2011 and mature on March 31, 2016. It is estimated that the first interest payment, payable on March 31, 2011, will be $7.88 per $1,000 principal amount of Debentures, which will include interest accrued from the closing date to, but excluding, March 31, 2011. The Debentures are convertible at the holder's option into common shares of the Company at an initial conversion price of $22.40 per common share, subject to adjustment in certain circumstances and satisfaction of certain conditions (the "Conversion Price").

The Debentures will not be redeemable at the option of the Company on or before March 31, 2014, except in certain circumstances following a change of control of the Company. On or 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 prior to 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.

Total intends to use the net proceeds of the Offering to repay indebtedness of the Company under its term loan revolving credit facility and to fund working capital requirements.

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 (any 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 first interest payment under the Debentures; and (2) the intended use of the net proceeds from the sale of the Debentures.

Forward-looking statements are based upon the opinions and expectations of management of Total as at the effective date of such statements. Although Total believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, 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 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 first interest payment under the Debentures; and (2) the intended use of the net proceeds of the sale of the Debentures; are all based upon certain factors and assumptions, including the terms of the underwriting agreement entered into between Total and the Underwriters. In addition, forward-looking statements concerning the first interest payment under the Debentures is based upon the terms of the convertible debenture indenture entered into by the Company and the Debenture trustee on February 9, 2011.

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 TSX has neither approved nor disapproved of the information contained herein.

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