Wenzel Announces Decision in Arbitration with Dreco Energy Services ULC and Vector Oil Tools ULC
CALGARY, ALBERTA--(Marketwire - Dec. 4, 2012) - Wenzel Downhole Tools Ltd. (the "Company") (TSX:WZL) announces that on Monday December 3, 2012, it received the final award (the "Award") in the matter of arbitration with Dreco Energy Services ULC ("Dreco") and Vector Oil Tools ULC ("Vector").
Regarding Dreco's and Vector's claim, the arbitrator awarded Dreco and Vector approximately $14.676 million in damages, plus pre-judgment interest in an amount to be re-calculated by an accountant. Based on past calculations the Company does not expect the amount of such pre- judgment interest to exceed $1.3 million.
The arbitrator dismissed the Company's counterclaim against Dreco and Vector, which claimed damages for abuse of process and interference with business relations.
The arbitrator has yet to decide on the issue of costs, and the Company may be responsible for a portion of Dreco's and Vector's costs.
Under the relevant provisions of the arbitration agreement among Dreco, Vector and the Company, the parties have until January 2, 2013, to appeal the Award. The Company is consulting with its legal advisors regarding an appeal.
While the Company is disappointed by the contents of the Award, the Company believes the issuance of the Award is yet another important step towards resolving the legal issues relating to events of over a decade ago.
Notwithstanding legal actions and claims, and related challenges, over the past ten years, the Company has consistently served its customers by providing what it believes to be downhole drilling tools of the highest quality combined with industry-leading service.
This remains the focus of the Company's management team and employees, and as a result both customers and shareholders can continue to expect that same dedication to quality and service.
Finally, with respect to liquidity and capital resources, the Company believes it is worth noting that in the Press Release, Condensed Consolidated Financial Statements and Management's Discussion & Analysis as filed on November 9, 2012, it was reported that its balances of short- term and long-term financial debt as of September 30, 2012, in the aggregate amounted to $2.774 million.
In short, the Company does not anticipate any issues concerning its liquidity and capital resources.
About Wenzel Downhole Tools Ltd.
The Company is a designer, manufacturer, seller and renter of drilling tools used in oil and gas exploration, that operates in Canada, the United States and internationally; its shares trade on the Toronto Stock Exchange under the symbol "WZL".
The Company's Canadian sales, manufacturing and servicing facilities are located in Edmonton, Alberta and its US servicing facilities are located in Conroe, Texas; Morgantown, West Virginia; and Casper, Wyoming. It also has a sales and service facility in Celle, Germany.
The main corporate office is located in Calgary, Alberta.
Forward Looking Statements
Certain statements contained in this press release constitute "forward-looking statements". These statements are based on current beliefs and assumptions of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this press release. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward- looking statements 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. For additional information with respect to certain of these beliefs, assumptions, risks and uncertainties, please refer to The Company's Annual Information Form for fiscal 2011 available on SEDAR at http://www.sedar.com.
Forward-looking statements are based on estimates and opinions of management of the Company at the time the statements are presented. 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Wenzel Downhole Tools Ltd.
Chief Executive Officer
(403) 265-8154 (FAX)