DIVERGENT Energy Services Provides Operations Update and Announces Debenture Issuance
04 Août 2023 - 3:00PM
DIVERGENT Energy Services Corp.
(DVG: TSX-V) (“Divergent”, the
"
Company", or
“
DVG”
) announces the following
update.
Following two years of strong operational
performance the Company has experienced a significant slowdown in
demand for its electric submersible pump (“ESP”) services in the
second quarter of 2023 from its largest customer. This slowdown was
primarily due to two of the region’s natural gas pipelines being
taken offline in April for repairs and maintenance. The reduced
pipeline capacity limited the client’s production capacity and
thereby reduced their need for ESP services. Pipeline capacity has
been restored as of August 1, which should lead to activity levels
with this client returning to previous levels in the near term.
Offsetting this drop in demand is the activity
from oil-producing clients within the Company’s operational
footprint, which has strengthened in the first half of 2023
including a record sales month in June from this segment of the
Company’s operations. To address the growing demand from this
segment of clients, the Company has committed to the purchase of
additional field equipment that will continue to diversify our
revenue stream, improve our exposure to oil producing clients and
reduce our reliance on a single large natural gas producer.
Given the tight working capital that has
resulted from the above noted slowdown in activity, and to address
the growth opportunities in the strong oil market, the Company has
issued a debenture to a director of the Company in the amount of
$81,000 USD (the "Debenture"), the proceeds of which will be used
to purchase the new equipment. The debenture matures December 31,
2026, pays the holder 9% interest per annum, and allows for the
director to register security against the equipment.
The issuance of the Debenture may be deemed to
be a "related party transaction" as defined under Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). The Debenture is exempt from
the formal valuation and minority shareholder approval requirements
of MI 61-101 (pursuant to subsections 5.5(c) and 5.7(1)(b)) as it
was a distribution of securities for cash and neither the fair
market value of the debentures distributed to, nor the
consideration received from, interested parties exceeded
$2,500,000. The Company’s independent board of directors reviewed
and approved the issuance of the Debenture.
For Further Information:
Ken Berg, President and Chief Executive Officer,
kberg@divergentenergyservices.com
Ken Olson, Chief Financial Officer,
ken.olson@divergentenergyservices.com
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, Divergent
provides Artificial Lift products and services for the water, gas
and oil industries through its wholly owned subsidiary Extreme Pump
Solutions LLC..
DIVERGENT Energy Services Corp., 2020, 715 – 5th Ave SW,
Calgary, AB T2P 2X6, (403) 543-0060, (403) 543-0069 (fax),
www.divergentenergyservices.com
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements, including, without limitation, statements pertaining to
anticipated future operational activity levels of Divergent and
demand from ESP service customers and from oil-producing customers.
All statements included herein, other than statements of historical
fact, are forward-looking information and such information involves
various risks and uncertainties, including: the risk that the
anticipated slowdown in ESP services lasts longer than expected or
impacts Divergent’s revenues more severely than expected, and the
risk that future lower oil prices may result in lower demand for
Divergent's services from oil-producing customers. There can be no
assurance that such information will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such information. A description of assumptions used
to develop such forward-looking information and a description of
risk factors that may cause actual results to differ materially
from forward-looking information can be found in the Company's
disclosure documents on the SEDAR+ website at www.sedarplus.ca.
Forward-looking statements are based on estimates and opinions of
management of the Company at the time the information is presented,
including expectations provided to Divergent by its customers. The
Company may, as considered necessary in the circumstances, update
or revise such forward-looking statements, whether as a result of
new information, future events or otherwise, but the Company
undertakes no obligation to update or revise any forward-looking
statements, except as required by applicable securities laws.
This press release contains financial outlook
information ("FOFI") about prospective revenue reductions, which
are subject to the same assumptions, risk factors, limitations, and
qualifications as set forth in the above paragraphs. FOFI contained
in this press release was made as of the date hereof and was
provided for the purpose of providing an update regarding an
anticipated material reduction in near-term revenue. Divergent
disclaims any intention or obligation to update or revise any FOFI
contained in this press release, whether as a result of new
information, future events or otherwise, unless required pursuant
to applicable law. Readers are cautioned that the FOFI contained in
this press release should not be used for purposes other than for
which it is disclosed herein.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
(Not for dissemination in the United States of
America)
Divergent Energy Services (TSXV:DVG)
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