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Cathedral Energy Services Announces Sale of Flowback and Production Testing Division Assets

Dec 19, 2016


CALGARY, Dec. 19, 2016 /CNW/ - Cathedral Energy Services Ltd. (TSX: CET) ("Cathedral" or the "Company") announces that it has entered into a definitive agreement to sell its flowback and production testing assets to Ideal Completions Group LLC ("Ideal") for total cash consideration of $17.8 million (the "Disposition").  Ideal will provide business continuity to Cathedral's flowback and production testing customers in the U.S. and Canada and intends to retain the majority of Cathedral's flowback and production testing related employees.  The transaction is expected to close on or about January 16, 2017.

The proceeds of the Disposition will initially be used to reduce the amount owing under the Company's credit facility along with supplementing working capital and capital investment required to support Cathedral's growing directional drilling business.  Post-closing, Cathedral's bank debt is expected to be in the $12 to $14 million range.  The Disposition will result in an estimated loss on sale for accounting purposes of approximately $6.5 million.

Over the past 18 months Cathedral has made many improvements to its business operations in a very challenging business environment.  Buoyed by the recent upturn in industry activity levels, the Disposition proceeds, industry leading technology and a team of experienced and motivated employees, Cathedral is now well positioned to accelerate the growth of its directional drilling business.

GMP FirstEnergy acted as exclusive financial advisor to Cathedral in this sale process.

About Ideal
Ideal is a private oilfield services company formed to complete the acquisition of Cathedral's flowback and production testing assets.  Ideal is backed by Edge Natural Resources LLC ("Edge"), a Dallas-based private equity firm focused on small-cap investments in the North American energy industry. Edge is currently investing through ENR Partners LP. Ideal also has access to additional capital to expand its flowback business through acquisition and/or the build-out of new equipment.

Ideal's management team has extensive experience in the flowback and production testing business through their prior management experience with Pure Energy Services and Cathedral Energy Services.  The management team includes Brad Gabel (Executive Chairman), Rutger Niers (President), Richard Defreitas (Vice-President) and Scott Marshall (Vice-President, Operations).  Rutger Niers, President of Ideal, said, "We are excited to acquire the high quality flowback asset base of Cathedral and look forward to welcoming the Cathedral staff to the Ideal team.  We will be solely focused on the flowback and production testing business.  With the Cathedral asset base and our considerable management and operational experience, Ideal is strategically well positioned to expand and grow its business to become an industry leader of flowback and production testing services in North America with a strong emphasis on safety and customer service."

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, statements related to Cathedral entering into the definitive agreement with Ideal contain forward-looking information, including the expected closing date, anticipated effects of the Disposition the anticipated use of proceeds from the Disposition, expected bank debt, the estimated loss on sale for accounting purposes and the anticipated business plans of Ideal following the Disposition. 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, including without limitation, the risk that the Disposition is delayed or is not completed for any reason, and the risk that the net proceeds of the Disposition are less than anticipated. Cathedral's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website ( 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. 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

SOURCE Cathedral Energy Services Ltd.

For further information: P. Scott MacFarlane, President and Chief Executive Officer or Michael F. Hill, Chief Financial Officer: Cathedral Energy Services Ltd., 6030 3 Street S.E., Calgary, Alberta T2H 1K2, Telephone: 403.265.2560, Fax: 403.262.4682,

Cathedral opens a 36,000 square foot full service operation facility in Oklahoma City, Oklahoma and Estevan, Saskatchewan operations migrate to Emerald Park, Saskatchewan.