DIVERGENT Energy Services Announces Corporate Update and Review of Strategic Alternatives
08 April 2024 - 3:00PM
DIVERGENT Energy Services Corp.
(“Divergent”, the "
Company", or
“
DVG”
) provides the following
Corporate Update.
As previously disclosed on November 17, 2023 and
December 13, 2023, a customer of the Company that accounts for
approximately 80% of the Company’s recent sales continues to
experience a material slow down in their business due to low
natural gas prices. The customer, who is undergoing a restructuring
and sales process, has informed the Company that they continue to
prioritize payments to certain critical infrastructure vendors such
as power, compression, and pipeline companies over Divergent, and
as such Divergent has not received any payments during 2024 and has
unpaid invoices dating back to July 2023.
Although the Company continued to perform work
for its other customers, the revenue generated in 2024 has been
insufficient to cover the costs of ongoing operations. The
resulting uncertainty has caused the resignation of a number of key
employees in Divergent's U.S. operating subsidiary, Extreme Pump
Solutions, LLC ("Extreme"). Extreme has entered
into and completed an agreement to sell certain non-core assets for
proceeds of $140,000 USD in order to generate cashflow while the
Company continues to wait on its key customer to re-engage its
services and to review all other strategic alternatives that may be
available.
The Company's evaluation of strategic
alternatives could result in a sale of the Company, a sale of a
material portion of the Company's assets, a merger, business
combination or a corporate reorganization, among other
alternatives. The Company may also seek to obtain value for its tax
losses and/or outstanding receivables.
The Company does not intend to disclose
developments with respect to the strategic review process unless
and until the Board of Directors has approved a definitive
transaction or strategic option, unless otherwise required by law
or disclosure of which is deemed appropriate. The Company cautions
that there are no guarantees that the strategic review will result
in a transaction or if a transaction is undertaken, as to its terms
or timing.
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., PO Box 5175, Calgary PO South,
AB T2H 3A3, (403) 543-0060, www.divergentenergyservices.com
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements, including, without limitation, statements pertaining to
factors which could result in changes to anticipated sales volumes
to material 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 of continued reductions in sales volumes to
material customers, and the associated effects on the Company and
its operations, which may include additional changes or reductions
to the Company's business and the Company's ability to continue
operations absent increases in demand for the Company's products
and services or completion of one or more strategic alternative
transactions. There are no guarantees that the strategic review
process will result in any transaction or the timing of any
proposed transaction. 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.sedar.com. 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.
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)
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