Daily News: September 26, 2017

Alberta Investment Provides $21MM Facility for Western Energy

Western Energy Services closed agreements with Alberta Investment Management (AIMco) providing for a $215 million second lien senior secured term loan facility and a private placement of 9,100,000 common shares of Western at a price of $1.25 per common share, for aggregate gross proceeds of $11.375 million.

Additionally, Western received commitments from certain of its lenders to amend its senior secured credit facilities, extending the maturity date to December 2020.

AIMCo, on behalf of certain of its clients, agreed to provide Western with a $215 million second lien senior secured term loan facility. Funds under the term loan will be made available to Western in a single draw, which is to occur no later than February 15, 2018. The term loan will mature five years from the date that Western elects to draw the funds. Interest will be paid semi-annually, at the rate of 7.25% per annum.

Amortization payments equal to 1% of the principal amount will be payable annually, in equal quarterly installments, beginning on July 1, 2018, with the balance due on maturity. Western may not prepay the term loan prior to the second anniversary of the draw date, except with payment of a make-whole premium. At any time following the second anniversary of the draw date and prior to the third anniversary of the draw date, Western may prepay the term loan at a price equal to 105% of the principal amount repaid. Thereafter, Western may prepay the term loan with no prepayment premium. Amounts borrowed under the term loan that are repaid or prepaid will not be available for reborrowing.

Peters & Co. acted as financial advisor to Western in connection with the term loan.

“Since the beginning of the downturn in the oilfield service industry, we have focused on managing our business to maximize returns for our stakeholders.” said Alex MacAusland, president and CEO. “These financings represent a continuation of this effort, positioning Western with an appropriate capital structure to succeed in the current business environment. We are pleased to have this opportunity to partner with AIMCo, and look forward to our continued evolution as a strong and focused oilfield service company.”

Western is an oilfield service company which provides contract drilling services in Canada through its Horizon Drilling division and in the U.S. through its wholly-owned subsidiary, Stoneham Drilling.