CALGARY, Alberta - May 15, 2012 (Investorideas.com newswire) - Ridgeline Energy Services Inc. (
TSX-V: RLE;
OTCQX: RGDEF) ("Ridgeline" or the "Company"), an energy services and
water treatment company, has signed an agreement with Kerr Energy, LLC
of Fort Worth, Texas for the installation of six water treatment
facilities to be located in western Texas.
WATER TREATMENT AGREEMENT
The agreement with Kerr Energy is for seven years
with a right of renewal and has projected revenues of $24 million
dollars in the first five years. The first of Ridgeline's water
treatment facilities will be installed on Kerr Energy's Salt Water
Disposal ("SWD") wells located near Monahans, Texas and will treat
produced and hydraulic fracturing flowback water for reuse by the oil
and gas industry. In addition, Ridgeline will share water and oil
recovery sales with Kerr. The agreement with Kerr marks a major step
forward for Ridgeline into the
business of treating water for resale in the oil industry.
Ridgeline currently operates another nearby facility treating
produced and flowback water outside Jal, New Mexico as well as a water
treatment facility in Santa Fe Springs California. The Santa Fe Springs
facility currently treats industrial waste water, produced water, and
flowback water from surrounding oil wells. The business model for the
new Kerr Energy facilities will be the same as at Santa Fe Springs.
Waste water from multiple clients will be delivered to these facilities
for treatment and resale or disposal.
"This new contract will initially setup expansion just 50 miles
south of our current facility in New Mexico, and grows our company's
presence further south and west in Texas. This growth fits perfectly,
and allows us to concentrate expansion geographically." stated Dennis M
Danzik, developer of Ridgeline's water treatment
technology.
Hydraulic fracturing involves the injection of millions of gallons
of water, sand and chemicals under high pressure into productive
formations which stimulate production by creating pathways for oil and
gas to escape into the wellbore. A large portion of this water returns
to the surface as a by-product or waste stream and must be disposed of
properly into a designated facility or treated for beneficial reuse.
Kerr Energy, based in Fort Worth, TX, was formed in 2007 by three
veterans of the oil and gas industry. Jim and Mike Martin (with over 30
years' experience in the industry) along with Ian Kerr were active in
the Barnett Shale and Permian Basin in the areas of leasehold
acquisition, royalty, and working interest offerings. In late 2010, Kerr
Energy recognized the high demand of water utility in the west Texas
arena. As such, they embarked on an initial build of five fresh water
locations within the Midland/Odessa area and west towards Barstow, TX.
With a clear view of the current and progressive scarcity and value of
water in the region, Kerr was pleased to find that Ridgeline Water Inc.
has a technology that has arrived right on time for this situation. Kerr
believes Ridgeline is the best partner to progress the services of
disposal, fresh water production, and oil recovery. Kerr Energy
currently operates five water stations in western Texas, and plans
expansion to more than a dozen in 2012.
"Our research and work with Ridgeline over the last several months
has proven to our organization that Ridgeline offered the best
technology and manufactured equipment to perform and survive in the
rigorous oil field environment.", stated Ian Kerr, Kerr Energy CEO. Mr.
Kerr also stated, "Our current group of western Texas based water supply
operations will now be expanded to include treatment and disposal. It
is our plan to recycle up to 80% of the waste water returned. As the
year progresses, the plans are to add water treatment to an existing
facility every two to four months, depending on volume, contracts, and
obtaining the required operating permits."
"To our knowledge, this is the largest water reclamation, and
recycling effort for the oil and gas industry in west Texas. Ridgeline
is working to build similar relationships with water suppliers in other
strategic areas of Texas and New Mexico. Opening our technology to
additional revenues from oil recovery, and water supply is now an
important part of our
business opportunity
and strategic plan. This development for us is a result of the mounting
need for waste water recycling and we look forward to much growth in
this direction" stated Tony Ker, Ridgeline CEO.
PROSPECTUSOFFERING
In addition, Ridgeline is pleased to announce it has entered into
an agreement with Mackie Research Capital Corporation (as sole book
runner and co-lead underwriter) whereby Mackie Research Capital
Corporation and National Bank Financial Inc. (as co-lead underwriter)
along with a syndicate of underwriters (collectively, the
"Underwriters") will conduct an overnight marketed offering of common shares of the Company (the
"Common Shares") at a price of $0.70 (the
" Offering Price ") per Common Share, for gross proceeds of up to approximately $10 million (the
"Offering"
). Pursuant to the Offering, the Underwriters have agreed to underwrite
2,857,000 Common Shares at the Offering Price equaling proceeds of
approximately $2 million of the gross proceeds of the Offering.
Pursuant to the Offering, the Company has
granted
the Underwriters the option, but not the obligation, exercisable in
whole or in part at any time prior to 30 days after closing of the
Offering (the
"Closing ") to increase the size of the Offering by up to 15% to cover over-allotments and for market stabilization purposes (the
"Over-Allotment Option ").
The Common Shares will be offered by way of a short-form prospectus
to be filed in such provinces of Canada (except Quebec), where the
Common Shares are sold, pursuant to National Instrument 44-101 -
Short Form Prospectus Distributions and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the
United States Securities Act of 1933, as amended.
The Offering is scheduled to close on or about the week of June 4
th, 2012 or as otherwise determined by the Company and Underwriters and
is subject to certain customary conditions including, but not limited
to, the receipt of all necessary regulatory approvals including the
approval of the TSX Venture Exchange.
The net proceeds received by the Company from the Offering will be
used for commercialization, acquisitions, development, and working
capital.
In consideration for their services, the Underwriters will receive a
cash commission of 7.0% of the gross proceeds of the Offering and
compensation options exercisable any time at the Offering Price for up
to 24 months from Closing to purchase an amount of Common Shares equal
to 7.0% of the number of Common Shares sold pursuant to the Offering,
including the amount subscribed for pursuant to the exercise of the
Over-Allotment Option, where any such exercise occurs.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities, in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction. The securities have not been and
will not be registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act"), or any state securities laws and
may not be offered or sold within the United States or to, or for the
account or benefit of, "U.S. persons," as such term is defined in
Regulation S under the U.S. Securities Act, unless an exemption from
such registration is available.
About Ridgeline Energy Services Inc.
Ridgeline Energy Services Inc. is an
energy services and water treatment company. The Company is applying
proprietary technology to treat the large volumes of contaminated water
generated by oil and gas production. The Company is working with energy
majors in the application of its technology for the recycle and reuse
of; produced and hydraulic stimulation flowback water; enhanced recovery
chemical flood water; and oil sands process water. As well the Company
is applying its technology in the testing and treatment of commercial
and industrial waste water. Through its environmental consulting and
remediation subsidiaries,
Ridgeline Environment Inc. and
Ridgeline GreenFill Inc.,
the Company has built a reputation as an established provider of
environmental services to North America's oil and gas industry. The
Company trades on the TSX Venture Exchange under the symbol "RLE" and
the OTCQX as "RGDEF". Additional information is available on the
Company's website at:
www.ridgelinecanada.com .
For further information please contact:
Ryan Johnson of Ridgeline Energy Services Inc.
Corporate Development
(604) 566-8066 ext. 3 (Vancouver)
rjohnson@ridgelinecanada.com
David Waldman at Crescendo Communications
Investor Relations
(212) 671-1021 (New York)
dwaldman@crescendo-ir.com
ON BEHALF OF THE BOARD OF DIRECTORS
"Tony Ker"
Tony Ker, CEO
"Neither 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
news release. This news release may contain forward-looking statements.
Forward-looking statements address future events and conditions and
therefore, involve inherent risks and uncertainties. Actual results may
differ materially from those currently anticipated in such statements.Such
information is subject to known and unknown risks, uncertainties and
other factors that could influence actual results or events and cause
actual results or events to differ materially from those stated,
anticipated or implied in the forward-looking information. Readers are
cautioned not to place undue reliance on forward-looking information, as
no assurances can be given as to future results, levels of activity or
achievements."
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