Cathedral Energy Services Ltd. Announces Increase to Previously Announced Bought Deal Financing to $11.2 Million

CALGARY, ALBERTA--(Marketwired - Jan. 25, 2017) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Cathedral Energy Services Ltd. ("Cathedral" or the "Company") (TSX:CET) is pleased to announce that in connection with its previously announced bought deal financing, Cathedral and the underwriter, GMP FirstEnergy (the "Underwriter"), have agreed to increase the size of the financing due to strong demand. Cathedral will now issue 10,000,000 common shares of the Company ("Common Shares") at $1.12 per Common Share (the "Offering Price") for aggregate gross proceeds of $11,200,000 (the "Offering"). The Company has also increased the option granted to the Underwriter to purchase up to an additional 1,500,000 Common Shares at a price of $1.12 per Common Share to cover over-allotments exercisable in whole or in part at any time until 30 days after the closing of the Offering (the "Over-Allotment Option"). Total aggregate gross proceeds raised under the Offering, including proceeds raised from the exercise of the Over-Allotment Option, will be approximately $12,880,000 if the Over-Allotment Option is exercised in full. In addition to and in conjunction with the Offering, certain officers, directors and employees of Cathedral and their associates intend to purchase up to an additional 1,116,071 Common Shares at a price of $1.12 per Common Share on a private placement basis for additional gross proceeds to the Company of up to $1,250,000 (the "Concurrent Private Placement").

The net proceeds of the Offering and Concurrent Private Placement will initially be used to repay bank indebtedness and then fund ongoing working capital requirements driven by increased business activity, increase capacity through funding equipment upgrades and capital expenditures, and for other general corporate purposes.

The Offering will be completed by way of short form prospectus in all of the provinces of Canada other than Quebec and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended, (the "U.S. Securities Act"). The Offering and the Concurrent Private Placement are subject to customary conditions including receipt of applicable regulatory approvals and are expected to close on or about February 15, 2017.