CALGARY,
AB, Jan. 27, 2025 /CNW/ - Western Energy
Services Corp. ("Western" or the "Company") (TSX: WRG) is pleased
to announce amendments to its second lien term loan facility (the
"Second Lien Facility") with its lender, Alberta Investment
Management Corporation ("AIMCo"), as well as its 2025 capital
budget.
Extension and Amendments to Second Lien Facility
The
Company announces that AIMCo has approved an extension of the
maturity date of Western's Second Lien Facility from May 18, 2026 to May 18,
2027. Additionally, under the amended Second Lien
Facility agreement, the Company is allowed to make voluntary
prepayments without having to pay any make-whole amounts or other
premiums. The Company is however no longer able to satisfy
its interest payments by capitalizing or deferring such
amounts. There are no changes to the quarterly principal
payments, the semi-annual interest payments or the interest rate
required under the amended agreement.
In conjunction with the Second Lien Facility extension, the
maturity date of the Company's syndicated revolving credit facility
and the operating facility (together the "Credit Facilities"), are
extended by a year automatically by their terms, to the earlier of
(i) six months prior to the maturity date of the Second Lien
Facility, which is now November 18,
2026 or (ii) March 22,
2027. The total commitments under the Company's Credit
Facilities are unchanged and there were no changes to the Company's
financial covenants.
Western believes the extension of the Second Lien Facility and
the Credit Facilities improves the Company's financial flexibility,
allowing it to adapt as market conditions change in the future.
2025 Capital Budget
Western also announces its 2025
capital expenditure budget of approximately $20 million, which is expected to be comprised of
approximately $18 million of
maintenance capital, and approximately $2
million of expansion capital, including approximately
$3 million of committed expenditures
from 2024 that will carry forward into 2025.
Maintenance capital of $18 million
includes $15 million in the contract
drilling segment and $3 million in
the production services segment. Expansion capital of
$2 million mainly relates to the
contract drilling segment for upgrades on the Company's rig
fleet.
Western will continuously monitor the utilization of its fleet,
as well as its customer requirements and market conditions, and
will adjust the 2025 capital expenditures accordingly.
About Western
Western is a progressive energy services
company which provides contract drilling services through its
division, Horizon Drilling in Canada, and its wholly owned subsidiary,
Stoneham Drilling Corporation in the
United States. Additionally, Western provides production
services in Canada through its
division, Eagle Well Servicing which provides well servicing and
its division Aero Rental Services which provides oilfield rental
services.
Forward-Looking Statements and Information
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "believes",
"expected", "will", and similar expressions is intended to identify
forward-looking statements or information. More particularly
and without limitation, this press release contains forward-looking
statements and information relating to the maturity dates of
Western's various credit facilities and the effect of changes in
such dates on Western's business prospects, potential future debt
repayments, anticipated capital expenditures of the Company in 2025
and the composition thereof, and information regarding economic
conditions in the Western Canadian oil and gas industry.
These forward-looking statements and information are based on
certain key expectations and assumptions made by Western in light
of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors that the Company believes are appropriate in the
circumstances.
Although Western believes that the expectations and assumptions
on which such forward-looking statements and information are based
are reasonable, undue reliance should not be placed on the
forward-looking statements and information as Western cannot give
any assurance that they will prove to be correct. Since
forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
Additional information on risk factors that could affect Western's
operations or financial results are included in Western's annual
information form for the year ended December
31, 2023 which may be accessed through SEDAR+ at
www.sedarplus.ca. The forward-looking statements and
information contained in this press release are made as of the date
hereof and Western does not undertake any obligation to update
publicly or revise any forward-looking statements or information,
whether as a result of new information, future events or otherwise,
unless so required by applicable securities laws.
SOURCE Western Energy Services Corp.
