CALGARY, Alberta, April 08, 2024 (GLOBE NEWSWIRE) -- 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)
Source: Divergent Energy Services Corp.