CALGARY, ALBERTA–(Marketwired – April 24, 2017) – New West Energy Services Inc. (TSX VENTURE:NWE), an oil and gas and environmental services company focused on Western Canada, today provided a corporate update and announced its intention to proceed with a consolidation of its common shares.
Corporate Update
- NWE completed its busiest winter season (December – March) since 2013/2014 and saw increasing revenues from its fluid management, transportation and environmental services with near-full utilization of its equipment fleet with certain services being outsourced due to excess demand.
- Revenues in March were similar to those in January and February (approximately $2 million) due to a prolonged winter season.
- NWE was at near-full utilization of its equipment fleet in March with customarily reduced levels in April due to spring breakup.
- As announced on March 9, 2017, NWE and a U.S.-based organization entered into agreements where NWE:
- refinanced its current debt obligations;
- obtained a new $3 million operating line of credit; and
- to meet increasing customer demand, obtained a loan of $4.8 million (interest only for 18 months) used to acquire a fleet of operating equipment, including various combinations of fluid transport trucks and trailers capable of hauling water for fracking operations as well as drilling and production fluids.
- Of the newly acquired equipment, approximately half was outfitted and at near-full utilization in March. The remaining acquired equipment is being outfitted and is expected to be available for use following spring breakup.
Gerry E. Kerkhoff, President and Chief Executive Officer of NWE stated, “New West is coming off a strong winter season with near-full utilization of our operating equipment in January, February and March and expect continued strength coming out of spring breakup and into summer.”
Mr. Kerkhoff concluded, “We have added a number of new clients in the completions and productions sector and our existing clients in the drilling sector are much more active and planning larger projects. With increasing signs of recovery in the oil and gas industry and our larger and more diversified fleet of equipment, we expect significantly higher revenues in the upcoming summer season compared to this time last year.”
Share Consolidation
NWE intends to proceed with a consolidation of its issued and outstanding common shares on the basis of one post-consolidation common share for every five pre-consolidation common shares. The consolidation was previously approved by the shareholders of NWE at the annual and special meeting held on October 24, 2016 and is subject to approval of the TSX Venture Exchange.
The directors of NWE believe that the post-consolidation market price per common share will (a) allow for the issuance of at-market stock options which are designed to motivate and retain the NWE’s key officers and employees in order to achieve results that ultimately benefit the shareholders; and (b) facilitate further financing activities of NWE, make investing in the common shares more attractive to a broader range of institutional investors and other members of the investing public.
NWE intends the effective date of the consolidation to be April 27, 2017 with the common shares trading on a post-consolidation basis beginning at the open of markets on that day. As of the date of this press release, a total of 118,224,210 common shares are issued and outstanding. Assuming the implementation of the consolidation, a total of approximately 23,644,842 post-consolidation common shares would be issued and outstanding, subject to the treatment of fractional interests.
No fractional common shares will be issued in connection with the consolidation and, in the event that a shareholder would otherwise be entitled to receive a fractional share upon the consolidation, the number of common shares to be received by such shareholder will be rounded up or down to the nearest whole common share.
There is no name change in conjunction with the consolidation, and NWE’s trading symbol on the TSX Venture Exchange will remain the same.
About New West Energy Services
NWE management and operations personnel have over 20 years of experience in the drilling, completions and production sectors of the oil and gas industry throughout western Canada. NWE is a recognized leader in comprehensive environmental services and fluid management, including transportation and disposal, and operate through their main service centres in Beaverlodge and Medicine Hat, Alberta, and have their head office in Calgary, Alberta.
Neither the 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.
Cautionary Note Regarding Forward-Looking Information
Certain statements in this news release may constitute “forward-looking information” within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information and financial outlook. Forward-looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations or future actions. Forward-looking information in this news release includes, without limitation, statements with respect to: the use of proceeds of the loans; the use of the acquired equipment; planned changes in NWE’s business and revenues; the competitive environment in which NWE operates; the assessment of future plans and operations; and the effect of the proposed share consolidation on NWE’s business, operations and/or market price of its common shares. Actual events or results may differ materially. The forward-looking information in this news release is based on assumptions which includes, but is not limited to: NWE realizing the expected benefits of the loans and acquired equipment; the general state of the economy and the oil and gas industry not worsening; NWE not losing any key personnel; NWE sustaining or increasing their level of revenues and EBITA; NWE growing its businesses long term and managing its growth; NWE complying with existing regulations and not becoming subject to more stringent regulations; NWE’s insurance being sufficient to cover losses that may occur as a result of its operations; NWE realizing the benefits of the proposed share consolidation.
The forward-looking information in this news release is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. The factors which could cause results to differ from current expectations include, but are not limited to: failure to realize the expected benefits of the loans and acquired equipment; potential undisclosed liens associated with the acquired equipment; NWE’s results being dependent upon the general state of the economy and the oil and gas industry; NWE being dependent on key personnel and clientele, the loss of which could harm its business; NWE may not be able to sustain or increase their revenues or EBITA; NWE may be unable to grow its business long term or to manage any growth; NWE may be unable to integrate the acquired equipment into its business; competition in NWE’s markets may lead to reduced revenues and EBITA; NWE may fail to comply with existing regulations or become subject to more stringent regulations; NWE’s insurance may be insufficient to cover losses that may occur as a result of NWE’s operations; the market price of NWE’s common shares will fluctuate; there is a possibility of dilution of existing holders of NWE’s common shares due to future financings or acquisitions; and failure to realize the expected benefits of the proposed share consolidation. Although NWE has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements in this news release, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of NWE. Accordingly, readers should not place undue reliance on the forward-looking information in this news release. The forward-looking information is made as of the date of this news release, and NWE does not assume any obligation to publicly update or revise such forward-looking information to reflect new information, subsequent or otherwise, except as may be required by applicable law. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.
Gerry E. Kerkhoff
President and Chief Executive Officer
403.984.9798 or 1.888.977.2327 (BEAR)
[email protected]
