Wilks Brothers Responds to Questions Regarding the Proxy Results of Calfrac's AGM

CISCO, TX, May 9, 2018 /CNW/ - Wilks Brothers, LLC and its joint actors currently own 28,720,172 shares of CalFrac Well Services Ltd. (CalFrac or the Company), which represents approximately 19.9% of shares outstanding. 

CalFrac announced the results of its Annual General Meeting on May 8, 2018. We have received numerous emails and calls regarding the proxy results and this press release allows us to streamline our communication regarding the requests for comment and to ensure that our message remains consistent.

Over the last 12 months, we have participated in a number of calls, emails and meetings with various members of CalFrac's board and management team.  The frequency of our communication was initially promising and we were optimistic that constructive conversations would produce tangible results.  During this period, our message to the Company has remained consistent:  Focus on right sizing the balance sheet to address not only today's environment, but tomorrow's as well.

CalFrac's leverage remains elevated on both an absolute and relative basis.  The announcement the Company made today has a minimal impact on its net debt and does nothing to address the fundamental issues that we believe remain.  This lack of attention and execution to address this issue leads one to conclude that the management team and board fail to respect the non-linear aspect of their business and cash flows.  It was a little more than 12 months ago that CalFrac issued very expensive equity to stave off lenders.  Today,  the Company's cash flow profile has improved but its balance sheet debt remains bloated.  In fact, CalFrac's net long-term debt remains materially higher today (3/31/2018) than it was at 12/31/2015, 12/31/2016, and 12/31/2017.

CalFrac and its management have improved operations, but the improved operational results are emblematic of a rising tide analogous to its comparable peer class.  We believe that the Company should explore all organic and inorganic avenues that have the ability to enhance shareholder value.  This is why we have incessantly encouraged CalFrac to hire US and Canadian financial advisors to thoroughly vet all alternatives including the separation of CalFrac's US and Canadian operations into two public entities.

The Company is aware of why we exercised our fundamental right as a shareholder and voted our shares as we did. They also know they must earn back our vote.  Our proxy vote represents our effort to help all shareholders maximize long-term value and hopefully serves as a message to the Company's management team and board that they have a large shareholder demanding change.  Until every aspect of all potentially accretive measures have been properly explored, CalFrac shareholders remain unequivocally vulnerable to any management missteps and to the cyclical attributes of this industry.

Morgan D. Neff
Wilks Brothers, LLC

SOURCE Wilks Brothers, LLC.