CALGARY, Feb. 25, 2020 /CNW/ - Calfrac Well Services
Ltd. ("Calfrac") (TSX-CFW) is pleased to announce the
expiration of the previously announced offer by Calfrac Holdings LP
("Calfrac Holdings"), a Delaware
limited partnership which is indirectly wholly-owned by Calfrac, to
exchange newly issued 10.875% Second Lien Secured Notes due
2026 (the "New Notes") for validly tendered (and not validly
withdrawn) 8.500% Senior Unsecured Notes due 2026 (the "Old Notes")
of Calfrac Holdings. This offer (the "Exchange Offer")
expired at 11:59 p.m., New York City time, on February 24, 2020.
As previously announced, Calfrac Holdings increased the maximum
aggregate principal amount of New Notes issued in exchange for Old
Notes in the Exchange Offer to US$120,000,100 (the "Maximum Amount") and, as a
result of the participation level and the Clearing Exchange Ratio
described below, the Exchange Offer was oversubscribed as of
5:00 p.m. New York City time on February 7, 2020 (the "Early Tender Time") and
any Old Notes tendered after the Early Tender Time were
rejected.
The Exchange Offer provided for an early settlement on
February 14, 2020 (the "Early
Settlement Date") of Old Notes validly tendered prior to the Early
Tender Time. On the Early Settlement Date, Calfrac Holdings
issued US$120,000,100 in aggregate
principal amount of New Notes in exchange for US$218,182,000 in aggregate principal amount of
Old Notes.
The final exchange ratio at which all Old Notes accepted for
exchange in the Exchange Offer on the Early Settlement Date were
exchanged for New Notes (the "Clearing Exchange Ratio") was
US$550.00 in New Notes per
US$1,000.00 principal amount of Old
Notes. Due to the fact that the aggregate principal amount of
Old Notes validly tendered exceeded the Maximum Amount, Eligible
Holders who validly tendered their Old Notes at the Clearing
Exchange Ratio at or prior to the Early Tender Time were prorated
based on the principal amount of Old Notes tendered at the Clearing
Exchange Ratio at or prior to the Early Tender Time. Old
Notes tendered (i) at or prior to the Early Tender Time at any
exchange ratio in excess of the Clearing Exchange Ratio, or (ii)
after the Early Tender Time, were rejected and returned to the
holders thereof.
The completion of the Exchange Offer has reduced Calfrac's long
term debt by over US$98,000,000
(approximately C$130,000,000), and
will result in a reduction in annual interest payments of
approximately US$5,500,000
(approximately C$7,300,000), as
compared to the interest payments related to the Old Notes prior to
the Exchange Offer, after taking into account the interest payments
associated with the New Notes.
The Exchange Offer was made, and the New Notes and the related
guarantees were offered and issued, only in the United States to holders of Old Notes who
were reasonably believed to be qualified institutional investors
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act") and outside the
United States to holders of Old Notes who are persons other
than "U.S. persons" pursuant to Regulation S under the Securities
Act. The holders of Old Notes who certified to Calfrac
Holdings that they were eligible to participate in the Exchange
Offer pursuant to at least one of the foregoing conditions are
referred to as "Eligible Holders." The Exchange Offer of the
New Notes and related guarantees was made only by means of an
exchange offering memorandum dated January
27, 2020 (the "Offering Memorandum"). The complete
terms and conditions of the Exchange Offer are described in the
Offering Memorandum. The New Notes were not registered under
the Securities Act or the securities laws of any other
jurisdiction, and may not be offered in the United States absent registration under
the Securities Act and applicable state securities laws or pursuant
to available exemptions from such registration requirements.
In Canada, the New Notes were
offered and issued on a private placement basis.
Eligible Holders that validly tendered Old Notes in the Exchange
Offer prior to the Early Tender Time whose Old Notes were accepted
for exchange also received cash on the Early Settlement Date equal
to accrued and unpaid interest to, but not including, the Early
Settlement Date on any Old Notes accepted for exchange.
This press release does not constitute an offer to exchange Old
Notes for New Notes, and there shall not be any exchange of Old
Notes for New Notes in any state or other jurisdiction in which
such exchange would be unlawful prior to registration or
qualification under the securities laws of any such state or other
jurisdiction.
Calfrac's common shares are publicly traded on the Toronto Stock
Exchange under the trading symbol "CFW". Calfrac provides
specialized oilfield services to exploration and production
companies designed to increase the production of hydrocarbons from
wells drilled throughout western Canada, the United
States, Argentina and
Russia.
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 "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information or
statements. More particularly and without limitation, this
press release contains forward-looking statements and information
relating to the structure and distribution of the Exchange Offer
and the annual interest savings resulting from the Exchange
Offer.
These forward-looking statements and information are based on
certain key expectations and assumptions made by Calfrac in light
of its experience and perception of historical trends, current
conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances,
including, but not limited to, the following: the economic and
political environment in which Calfrac operates; Calfrac's
expectations for its customers' capital budgets and geographical
areas of focus; the effect unconventional oil and gas projects have
had on supply and demand fundamentals for oil and natural gas;
Calfrac's existing contracts and the status of current negotiations
with key customers and suppliers; the effectiveness of cost
reduction measures instituted by Calfrac; and the likelihood that
the current tax and regulatory regime will remain substantially
unchanged.
Although Calfrac 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 Calfrac 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. These include, but are not limited to, risks
associated with: global economic conditions; the level of
exploration, development and production for oil and natural gas in
Canada, the United States, Argentina and Russia; the demand for fracturing and other
stimulation services during drilling and completion of oil and
natural gas wells; volatility in market prices for oil and natural
gas and the effect of this volatility on the demand for oilfield
services generally; excess oilfield equipment levels; regional
competition; the availability of capital on satisfactory terms;
restrictions resulting from compliance with debt covenants and risk
of acceleration of indebtedness; direct and indirect exposure to
volatile credit markets, including credit rating risk; sourcing,
pricing and availability of raw materials, component parts,
equipment, suppliers, facilities and skilled personnel; currency
exchange rate risk; risks associated with foreign operations;
operating restrictions and compliance costs associated with
legislative and regulatory initiatives relating to hydraulic
fracturing and the protection of workers and the environment;
changes in legislation and the regulatory environment; dependence
on, and concentration of, major customers; liabilities and risks,
including environmental liabilities and risks, inherent in oil and
natural gas operations; uncertainties in weather and temperature
affecting the duration of the service periods and the activities
that can be completed; liabilities and risks associated with prior
operations; liabilities relating to legal and/or administrative
proceedings; failure to maintain Calfrac's safety standards and
record; failure to realize anticipated benefits of acquisitions and
dispositions; the ability to integrate technological advances and
match advances from competitors; intellectual property risks; third
party credit risk; and the effect of accounting pronouncements
issued periodically. The forward-looking statements and
information contained in this press release are made as of the date
hereof and Calfrac 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 Calfrac Well Services Ltd.