/NOT FOR DISSEMINATION IN THE
UNITED STATES OF AMERICA/
CALGARY,
Aug. 9, 2016 /CNW/ - Cathedral Energy
Services Ltd. (TSX:CET) ("Cathedral" or the "Corporation")
announces it has entered into a Settlement Agreement and Release
(the "Settlement Agreement") in respect of two wage and hour
lawsuits (the "Collective Actions") that were filed against
Cathedral's wholly owned U.S. subsidiary Cathedral Energy Services
Inc. ("Cathedral Inc."). The first collective action lawsuit,
Wallace vs. Cathedral Energy Services Inc. ("Wallace"), was filed
on November 6, 2014, in the United
States District Court for the Southern District of Texas, Houston Division (the "Houston Court") alleging that Cathedral Inc.
employed or contracted Measurement While Drilling ("MWD") and
Directional Drilling ("DD") operators were entitled to recover
unpaid overtime wages under the Fair Labor Standards Act
("FLSA"). The second collective action lawsuit, Price vs.
Cathedral Energy Services Inc., was filed on April 9, 2015, in the United States District
Court District of Colorado, Denver
Division (and subsequently transferred to Houston Court) alleging that the Company
incorrectly calculated the overtime pay for certain hourly paid
operators in violation of the FLSA. Legal actions
involving similar alleged FLSA violations have been filed in
the United States against a number
of other oilfield service companies. Cathedral has denied the
allegations, and vigorously defended the litigation leading up to
entering into the Settlement Agreement.
The Settlement Agreement provides a mechanism for finally
resolving and releasing the claims for all Cathedral Inc. employed
and contracted MWD and DD operators. Under the terms of the
Settlement Agreement, the parties will establish a settlement fund
of up to US$3.4 million. The
final determination of the settlement fund amount will be based on
the number of claimants that participate in the settlement and
Cathedral estimates the final settlement amount will be in the US
$2.9 million range. The
Settlement Agreement contemplates structured quarterly payments
which are subject to Cathedral's financial condition and Cathedral
not being in violation of its credit facility covenants.
All claims in both Collective actions have been settled and the
Houston Court, approved the
settlement of the Wallace claim on August
8, 2016. Any settlement fund payments made by
Cathedral are subject to the approval of Cathedral's banking
syndicate.
FORWARD-LOOKING INFORMATION
This press release contains certain statements or disclosures
relating to Cathedral that are based on the expectations of
Cathedral as well as assumptions made by and information currently
available to Cathedral which may constitute forward-looking
information under applicable securities laws. In particular, the
statements related to the final determination of the settlement
fund amount will be based on the number of claimants that
participate in the settlement and Cathedral estimates the final
settlement amount will be in the US $2.9
million range and the settlement fund contemplates
structured quarterly payments by the Corporation may contain
forward-looking information. Many factors could cause the
performance or achievement by Cathedral to be materially different
from any future results, performance or achievements that may be
expressed or implied by such forward-looking information.
Cathedral's Annual Information Form and other documents filed with
securities regulatory authorities (accessible through the SEDAR
website (www.sedar.com) describe the risks, material assumptions
and other factors that could influence actual results and which are
incorporated herein by reference. Cathedral disclaims any intention
or obligation to publicly update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as may be expressly required by applicable
securities laws.
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 and
dependable flowback and production testing solutions. 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.
SOURCE Cathedral Energy Services Ltd.