CALGARY, July 4, 2017 /CNW/ - Secure Energy Services
Inc. ("Secure" or the "Corporation") (TSX – SES) is pleased to
announce it has entered a new $470 million first lien credit
facility ("First Lien Facility") led by Alberta Treasury Branches
("ATB") with a syndicate of ten financial institutions and Canadian
Chartered banks. In addition, the Corporation has
entered into a new $130 million second lien credit facility
("Second Lien Facility") led by National Bank of Canada with a syndicate of three financial
institutions and Canadian Chartered banks. The combined facilities
total $600 million, and replace the Corporation's previous
$700 million syndicated facility. The reduction in the
total facility allows the Corporation to optimize its debt
structure to reduce costs associated with standby fees on undrawn
amounts while maintaining target levels of liquidity.
The First Lien Facility consists of a four year $445 million revolving credit facility and a
$25 million revolving operating facility with a maturity date
of June 30, 2021. The First Lien
Facility is secured by substantially all of the Corporation's
assets and includes customary terms, conditions and covenants,
including that the consolidated senior funded debt to EBITDA ratio
does not exceed 3.5 to 1.0, the consolidated total funded debt to
EBITDA ratio does not exceed 5.0 to 1.0 and the consolidated EBITDA
to financing charges ratio is not less than 2.5 to 1.0.
Amounts borrowed under the First Lien Facility will bear interest
at the Corporation's option of either the Canadian prime rate plus
0.45% to 2.00% or the banker acceptance rate plus 1.45% to 3.00%,
depending, in each case, on the ratio of consolidated senior funded
debt to EBITDA.
The Second Lien Facility is a four year plus one month
$130 million term credit facility with a maturity date of July
31, 2021. The Corporation has entered into interest rate swaps
to fix the interest rate at 5% for the first three years and 5.5%
in the fourth year. The financial covenants are consistent with the
First Lien Facility, and the security provided by the Corporation
is the same as the First Lien Facility but is subordinate to the
First Lien Facility lenders.
"The addition of a term facility to our capital structure
creates the financial flexibility we require to continue our
business strategy of adding production related services that
deliver stable operating cash flow", said Allen Gransch, Chief Financial Officer of
Secure, "These credit facilities also provide significant borrowing
capacity while still maintaining a strong balance sheet."
NON-GAAP MEASURES
This press release contains references to EBITDA. This financial
measure is not a measure that has any standardized meaning
prescribed under International Financial Reporting Standards and is
therefore referred to as non-GAAP measure. The non-GAAP measure
used by the Corporation may not be comparable to a similar measure
used by other companies. EBITDA is not a recognized measure
under GAAP. Management believes that in addition to net income,
EBITDA is a useful supplemental measure as it provides an
indication of the results generated by the principal business
activities prior to consideration of how those activities are
financed or how the results are taxed. EBITDA is calculated
as net income excluding depreciation, depletion and accretion,
share-based payments, interest, and taxes. See the management's
discussion and analysis available at www.sedar.com for a
reconciliation of the Non-GAAP financial measures.
ABOUT SECURE ENERGY SERVICES INC.
Secure is a TSX publicly traded energy services company that
provides safe, innovative, efficient and environmentally
responsible fluids and solids solutions to the oil and gas
industry. The Corporation owns and operates midstream
infrastructure and provides environmental services and innovative
products to upstream oil and natural gas companies operating in
Western Canada and certain regions
in the United States
("U.S.").
The Corporation operates three divisions:
Processing, Recovery and Disposal Division ("PRD"): The PRD
division owns and operates midstream infrastructure that provides
processing, storing, shipping and marketing of crude oil, oilfield
waste disposal and recycling. More specifically these services are
clean oil terminalling and rail transloading, custom treating of
crude oil, crude oil marketing, produced and waste water disposal,
oilfield waste processing, landfill disposal, and oil
purchase/resale service. Secure currently operates a network
of facilities throughout Western
Canada and in North Dakota,
providing these services at its full service terminals ("FST"),
landfills, stand-alone water disposal facilities ("SWD") and full
service rail facilities ("FSR").
Drilling and Production Services Division ("DPS"): The DPS
division provides equipment and product solutions for drilling,
completion and production operations for oil and gas producers in
Western Canada. The drilling
service line comprises the majority of the revenue for the division
which includes the design and implementation of drilling fluid
systems for producers drilling for oil, bitumen and natural gas.
The drilling service line focuses on providing products and systems
that are designed for more complex wells, such as medium to deep
wells, horizontal wells and horizontal wells drilled into the oil
sands. The production services line focuses on providing equipment
and chemical solutions that optimize production, provide flow
assurance and maintain the integrity of production
assets.
Onsite Services Division ("OS"): The operations of the OS
division include Projects which include pipeline integrity
(inspection, excavation, repair, replacement and rehabilitation),
demolition and decommissioning, and reclamation and remediation of
former wellsites, facilities, commercial and industrial properties,
and environmental construction projects (landfills, containment
ponds, subsurface containment walls, etc.); Environmental services
which provide pre-drilling assessment planning, drilling waste
management, remediation and reclamation assessment services,
Naturally Occurring Radioactive Material ("NORM") management, waste
container services, and emergency response services; and Integrated
Fluid Solutions ("IFS") which include water management, recycling,
pumping and storage solutions.
SOURCE SECURE Energy Services Inc.