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Calfrac announces US$650 million offering of senior notes, accordion exercise and intention to repay second lien term loan

CALGARY , May 9, 2018 /CNW/ - Calfrac Well Services Ltd. ("Calfrac") (TSX-CFW) is pleased to announce that Calfrac Holdings LP ("Calfrac Holdings"), a Delaware limited partnership which is indirectly wholly owned by Calfrac, intends to offer, subject to market and other conditions, up to US$650 million aggregate principal amount of senior notes due 2026 (the "notes"), which will be issued under a new indenture. Calfrac and Calfrac Well Services Corp., its wholly owned subsidiary and a Colorado corporation, will fully and unconditionally guarantee the notes.

The notes and the related guarantees will be sold to qualified institutional investors pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and to certain persons other than "U.S. persons" in transactions outside the United States pursuant to Regulation S under the Securities Act. Any offers of the notes and related guarantees will be made only by means of a confidential offering memorandum. The notes will not be registered under the Securities Act or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or pursuant to available exemptions from such registration requirements.

Calfrac Holdings intends to use a portion of the net proceeds from the offering of the notes to fund a tender offer to purchase for cash up to all of its outstanding 7.50% senior notes due 2020 (the "Existing Notes"), with the balance to be used to partially fund the repayment in full of the remaining C$196.5 million principal amount of Calfrac's second lien senior secured term loan facility (the "Term Loan"). Calfrac Holdings intends to redeem any Existing Notes that remain outstanding following the expiration of the tender offer in accordance with the terms of the indenture governing the Existing Notes.

Calfrac is also pleased to announce that it has entered into an agreement with its lending syndicate to amend its credit facilities (the "Credit Facilities") to exercise C$100 million of accordion capacity under the Credit Facilities. The increased capacity provided by the accordion exercise provides additional liquidity, and along with the proceeds to be raised by the offering, will position Calfrac to repay all of the indebtedness under the Term Loan. The Term Loan agreement provides Calfrac the right to repay the Term Loan prior to the second anniversary date of such agreement, which is June 10, 2018 , with only nominal prepayment premium.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes, and there shall not be any sale of the notes in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Calfrac's common shares are publicly traded on the Toronto Stock Exchange under the trading symbol "CFW". Calfrac provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada , the United States , Russia and Argentina .

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to the structure, distribution and use of proceeds of the offering and the accordion exercise, and the repayment of the Term Loan.

These forward-looking statements and information are based on certain key expectations and assumptions made by Calfrac in light of its experience and perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances, including, but not limited to, the following: the economic and political environment in which Calfrac operates; Calfrac's expectations for its customers' capital budgets and geographical areas of focus; the effect unconventional oil and gas projects have had on supply and demand fundamentals for oil and natural gas; Calfrac's existing contracts and the status of current negotiations with key customers and suppliers; the effectiveness of cost reduction measures instituted by Calfrac; and the likelihood that the current tax and regulatory regime will remain substantially unchanged.

Although Calfrac believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Calfrac cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with: global economic conditions; the level of exploration, development and production for oil and natural gas in Canada , the United States , Russia and Argentina ; the demand for fracturing and other stimulation services during drilling and completion of oil and natural gas wells; volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally; excess oilfield equipment levels; regional competition; the availability of capital on satisfactory terms; restrictions resulting from compliance with debt covenants and risk of acceleration of indebtedness; direct and indirect exposure to volatile credit markets, including credit rating risk; sourcing, pricing and availability of raw materials, component parts, equipment, suppliers, facilities and skilled personnel; currency exchange rate risk; risks associated with foreign operations; operating restrictions and compliance costs associated with legislative and regulatory initiatives relating to hydraulic fracturing and the protection of workers and the environment; changes in legislation and the regulatory environment; dependence on, and concentration of, major customers; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; liabilities and risks associated with prior operations; liabilities relating to legal and/or administrative proceedings; failure to maintain Calfrac's safety standards and record; failure to realize anticipated benefits of acquisitions and dispositions; the ability to integrate technological advances and match advances from competitors; intellectual property risks; third party credit risk; and the effect of accounting pronouncements issued periodically. The forward-looking statements and information contained in this press release are made as of the date hereof and Calfrac does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Calfrac Well Services Ltd.


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