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Cathedral Energy Services enters into agreement with Canada Revenue Agency regarding its conversion transaction

Jul 7, 2015
5:00am

/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

CALGARY, July 7, 2015 /CNW/ - Cathedral Energy Services Ltd. (TSX: CET) ("Cathedral") announced today that it has entered into an agreement with the Canada Revenue Agency ("CRA") regarding the CRA's objection to the tax consequences of the conversion of Cathedral from an income trust structure into a business corporation in December 2009 ("the conversion").

The agreement will not give rise to any cash outlay by Cathedral for prior taxation years. Cathedral continues to have access to tax pools and investment tax credits to be able to offset federal and provincial taxes in subsequent taxation years from the conversion.  The agreement will result in a non-cash charge to earnings of approximately $10.5 million in the second quarter of 2015 resulting from adjustments to deferred tax balances. 

Cathedral elected to enter into the agreement with CRA as a highly satisfactory solution to avoid potential costly and time consuming legal proceedings and allow management to focus its efforts on business operations and enhancing shareholder value.

Cathedral will provide an update of the agreement's impact on its deferred tax assets and liabilities as part of its management's discussion and analysis accompanying its financial statements for the second quarter to be issued in mid-August. 

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 statement related to non-cash charge to earnings 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.

For further information: Requests for further information should be directed to: 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, www.cathedralenergyservices.com


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