Mr. Alex MacAusland reports
WESTERN ENERGY SERVICES CORP. ANNOUNCES EXTENSION OF PAYMENT DUE DATE FOR SECOND LIEN CREDIT FACILITY
Western Energy Services Corp. and Alberta Investment Management Corp., the lender under its second-lien credit facility, have agreed to amend the second-lien facility credit agreement to provide that the payment of interest and a portion of principal that Western would have been required to pay on July 2, 2020, will now be due on Sept. 1, 2020.
Western has the financial resources available from existing cash on hand and availability under its senior secured credit facility to make the required payment, which would have been approximately $8.2 million, on the original due date. However, Western is currently in discussions with its lenders and other parties with respect to potential further refinancing transactions to provide long-term financial stability through the current challenging industry environment arising from lower oil and natural gas prices, reduced exploration activity in the North American energy industry and business disruptions resulting from the COVID-19 pandemic. The payment extension is intended to provide Western with additional flexibility to allow it to avoid drawing this amount on its senior credit facility while it explores these potential opportunities.
There is no certainty as to whether Western will be successful in negotiating or completing new refinancing transactions prior to the extended payment deadline or at all. If no such alternative transactions are completed and no further payment extension under the second lien facility is available by September 1, 2020, then Western would plan to make the payment on such date using financial resources that it expects to have available at that time.
Western is an oilfield service company which provides contract drilling services in Canada through its Horizon Drilling division and in the United States through its wholly-owned subsidiary Stoneham Drilling Corporation. In Canada, Western also provides well servicing through its Eagle Well Servicing division and provides oilfield rental services through its Aero Rental Services division. Stoneham's division, Western Oilfield Services, provides well servicing in the United States.
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