CALGARY, AB , April 21, 2022 /CNW/ – Stampede Drilling Inc. (“Stampede” or the “Corporation”) (TSXV: SDI) is pleased to confirm the acquisition, from a third party, of three telescopic double drilling rigs, two top drives and ancillary equipment (collectively, the “Rigs”). The purchase price was approximately $5 million, paid in cash. Stampede anticipates an additional $3 million of incremental capital expenditures during the second quarter of 2022 for recertifications and to upgrade the three Rigs to be consistent with its fleet of modern drilling rigs. Stampede has committed the three Rigs to customers coming out of spring breakup.
Additionally, Stampede has entered into a new $25 million credit facility with HSBC Bank Canada (the “Credit Facility”). Under the Credit Facility, which has an initial term of three years. Stampede will have an available limit of $18 million under a revolving facility and $7 million under a term loan (the “Term Loan Facility”). The proceeds of the Term Loan Facility were used to finance the acquisition of the Rigs, with the balance anticipated to be used for capital expenditures for its fleet and to repay amounts outstanding under Stampede’s current revolving credit facility.
The principal amount outstanding under the Term Loan Facility shall be repaid based on a notional amortization rate of 10% per annum. The Credit Facility bears interest and financial covenants consistent with the Corporation’s current credit facility and provides for customary positive and negative covenants, including limitations on debt, acquisitions, dispositions, distributions and capital expenditures. At closing of the acquisition, the Corporation is in compliance with the terms and conditions of the Credit Facility.
“The new Credit Facility positions Stampede with a stable and flexible capital structure and allows us to focus on operations, competitive positioning, and opportunistic growth.”, stated Lyle Whitmarsh, President and CEO of Stampede.
During the first quarter of 2022, Stampede had all ten of its rigs fully operational and fully crewed. Stampede’s first quarter utilization of 72% was significantly above the Canadian industry utilization of 38% (source: CAOEC). Stampede will report its first quarter 2022 results on May 12, 2022, with full financial statements available on Sedar (www.sedar.com) thereafter.
Certain statements contained in this News Release constitute forward-looking statements or forward-looking information (collectively, “forward-looking information”). Forward-looking information relates to future events or the Corporation’s future performance. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate”, “plan”, “contemplate”, “continue”, “estimate”, “expect”, “intend”, “propose”, “might”, “may”, “will”, “could”, “should”, “believe”, “predict”, and “forecast” are intended to identify forward-looking information.
This News Release contains forward-looking information pertaining to, among other things: expectations relating to future capital expenditures associated with the Rigs; expectations relating to the operational date of the Rigs; Stampede’s ability to successfully integrate the Rigs into its fleet; the anticipated use of proceeds from the Credit Facility; and Stampede’s ability to continue to comply with the covenants of the Credit Facility.
Forward-looking information is presented in this News Release for the purpose of assisting investors and others in understanding certain key elements of the Corporation’s operations and business plan, as well as the objectives, strategic priorities and business outlook of the Corporation, and in obtaining a better understanding of the Corporation’s anticipated operating environment. Readers are cautioned that such forward-looking information may not be appropriate for other purposes.
Forward-looking information, by its very nature, is subject to inherent risks and uncertainties and is based on many assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from the expectations of the Corporation expressed in or implied by such forward-looking information and that the Corporation’s business outlook, objectives, plans and strategic priorities may not be achieved. Macro-economic conditions, including public health concerns (including the continued impact of the COVID-19 pandemic) and other geopolitical risks, the condition of the global economy and, specifically, the condition of the crude oil and natural gas industry, and the ongoing significant volatility in world markets may adversely impact drilling and completions programs, which could materially adversely impact the Corporation.
In addition to other factors which may be identified in this News Release, such forward-looking information is subject to various risks, uncertainties and assumptions, including, but not limited to: the condition of the global economy, including trade, public health (including the impact of the COVID-19 pandemic) and other geopolitical risks; the stability of the economic and political environment in which the Corporation operates; future commodity prices and the potential impact on the Corporation and the industry in which the Corporation operates, including levels of exploration and development activities; the success of the measures implemented by the Corporation to ensure the safety of its field and office employees and safe, efficient and reliable operations at each of its drilling sites; the creditworthiness of the Corporation’s customers and counterparties; the effectiveness of the Corporation’s financial risk management policies at ensuring all payables are paid within the pre-agreed credit terms; the ability of the Corporation to retain qualified staff; the ability of the Corporation to obtain financing on acceptable terms; the impact of increasing competition; the belief that the Corporation’s principal sources of liquidity, its operating cash flows, operating loan and debt and equity financings will be sufficient to service its debt and fund its operations and other strategic opportunities; the expected effects of seasonality and weather on the Corporation’s operations and business; the ability to protect and maintain the Corporation’s intellectual property; the ability of the Corporation to maintain key customers; foreign currency exchange rates; interest rates; the regulatory framework regarding taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully implement key cost and discretionary spending plan adjustments. Actual results and future events could differ materially from those expected or estimated in such forward-looking information. As a result, the Corporation cannot guarantee that any forward-looking information will
materialize and we caution you against relying on any of this forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information.
Additional information on these and other factors that the Corporation’s forward-looking information is subject to are disclosed in the Corporation’s management’s discussion and analysis and annual information form each dated March 24, 2022, and in other reports filed with the securities regulatory authorities in Canada from time to time and available on SEDAR (sedar.com).
Statements, including forward-looking information, are made as of the date of this News Release and the Corporation does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The forward-looking information contained in this News Release is expressly qualified by this cautionary statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Stampede Drilling Inc.
View original content: http://www.newswire.ca/en/releases/archive/April2022/21/c8224.html
For further information:
Lyle Whitmarsh, President & Chief Executive Officer, Stampede Drilling Inc., Tel: (403) 984-5042
CO: Stampede Drilling Inc.
CNW 07:30e 21-APR-22