/NOT FOR DISSEMINATION IN THE
UNITED STATES OF AMERICA/
CALGARY, May 10, 2020
/CNW/ - Cathedral Energy Services Ltd. (the
"Company" or "Cathedral" / TSX: CET) is announcing
that due to the ongoing COVID-19 pandemic, the Company is
postponing the filing of its interim financial statements (the
"Financial Statements") and related management's discussion
and analysis (the "MD&A", and together with the
Financial Statements, the "Interim Filings") for the interim
period ended March 31, 2020. In
response to the pandemic, securities regulatory authorities in
Canada have granted a blanket
exemption granting issuers an additional 45 days to complete
certain regulatory filings (the "Exemption"). Cathedral is
relying on the Exemption to postpone the filing of the Financial
Statements required by section 4.4 of National Instrument 51-102
and the filing of the MD&A required by subsection 5.1(2) of
National Instrument 51-102.
Cathedral anticipates filing the Interim Filings on or
about June 25, 2020. Until such
time as the Interim Filings are filed, management and other
insiders of Cathedral will be subject to a trading black-out policy
that reflects the principles in section 9 of National Policy 11-207
Failure-to-File Cease Trade Orders and Revocations in Multiple
Jurisdictions.
Except as set out below and in Cathedral's news release dated
April 20, 2020, which provided a
corporate update in relation to the current deterioration in the
business environment related to the COVID-19 pandemic and declining
world oil prices, there have been no material business developments
since the date of the Company's financial statements for the year
ended December 31, 2019 which were
filed on March 16, 2020. That
news release also provided details of the cost cutting initiatives
implemented by Cathedral's management team in response to the
expected decline in activity levels.
As at March 31, 2020, Cathedral
was in compliance with the financial covenants in its credit
facility. However, as a result of the ongoing COVID-19 pandemic and
given the recent downturn in oil prices, which is negatively
impacting drilling activity in the U.S. and Canada, management has approached its senior
lender to request a relaxation of certain financial covenants for a
reasonable period. We have no reason to believe at this time
that our request for such relaxation will not be granted.
On May 8, 2020, Cathedral received
approval under an application for a U.S. Paycheck Protection
Program loan ("PPP") of $1.04 million
(USD$750,000). Funding is
expected in approximately 10 days. The loan will bear
interest at 1% per annum and will mature on May 8, 2022. The proceeds will be used to
support payroll expenditures for Cathedral's U.S. employees.
A portion of the loan proceeds may be forgivable in accordance with
certain U.S. Treasury guidelines. Cathedral estimates that
approximately 70% of the loan proceeds (USD$525,000) may be forgiven, if the U.S.
Treasury guidelines are met. Management continues to evaluate
and apply for any additional U.S. and Canadian federal, state and
provincial government relief programs for which Cathedral
qualifies.
Cathedral Energy Services Ltd. (the "Company" or
"Cathedral"), based in Calgary,
Alberta is incorporated under the Business Corporations Act
(Alberta) and operates in the U.S.
under Cathedral Energy Services Inc. The Company is publicly
traded on the Toronto Stock Exchange under the symbol "CET".
Cathedral is a trusted partner to North American energy companies
requiring high performance directional drilling services. We
work in partnership with our customers to tailor our equipment and
expertise to meet their specific geographical and technical
needs. Our experience, technologies and responsive personnel
enable our customers to achieve higher efficiencies and lower
project costs. For more information, visit
www.cathedralenergyservices.com.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
Canadian securities laws. All statements other than
statements of present or historical fact are forward-looking
statements. In particular, this news release contains
forward-looking statements relating to, among other things, the
anticipated timing of filing the Interim Filings and the
anticipated effects of the current global COVID-19 pandemic and low
commodity price environment on Cathedral's operations as it may
impact Cathedral's financial covenants under its credit facility,
expected loan proceeds under the PPP and the estimate of the
portion of the PPP that may be forgivable under the terms of the
PPP.
The Company believes the expectations reflected in such
forward-looking statements are reasonable as of the date hereof but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements should not be unduly
relied upon. Various factors and assumptions are typically applied
in drawing conclusions or making the forecasts or projections set
out in forward-looking statements. Those material factors and
assumptions are based on information currently available to the
Company, including information obtained from third party industry
analysts and other third-party sources. You are cautioned
that the following list of material factors and assumptions is not
exhaustive. Specific material factors and assumptions
include, but are not limited to: current and anticipated oil and
natural gas commodity prices and production levels; capital
expenditure programs and other expenditures by Cathedral and its
customers; impact of economic and social trends; the performance of
Cathedral's business; the current terms of the PPP program; the
ability of Cathedral to comply with the terms and conditions of its
credit facility; changes under governmental regulatory regimes and
tax, environmental and other laws in Canada and the
United States ("U.S."); risks associated with future
foreign operations; and currency exchange and interest rates.
Forward-looking statements are not a guarantee of future
performance and involve a number of risks and uncertainties some of
which are described herein. Such forward-looking statements
necessarily involve known and unknown risks and uncertainties,
which may cause the Company's actual performance and financial
results in future periods to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include,
but are not limited to, the risks identified in this news release
and in the Company's Annual Information Form under the heading
"Risk Factors". Any forward-looking statements are made as of the
date hereof and, except as required by law, the Company assumes no
obligation to publicly update or revise such statements to reflect
new information, subsequent or otherwise. All forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in the Company's
current Annual Information Form that has been filed with Canadian
provincial securities commissions and is available on
www.sedar.com.
SOURCE Cathedral Energy Services Ltd.