Exhibit 99.2
FOR IMMEDIATE RELEASE
BLACK WARRIOR WIRELINE CORP. ANNOUNCES RECAPITALIZATION PLAN AND LETTER OF
INTENT TO ACQUIRE BOBCAT PRESSURE CONTROL, INC.
FRIDAY, OCTOBER 7, 2005
Columbus, Mississippi. Black Warrior Wireline Corp. (OTCBB-BWWL) ("Black
Warrior" or the "Company") announced today that it had commenced an offer to
exchange shares of its common stock for outstanding common stock purchase
warrants. Black Warrior is offering to exchange one (1) share of Common Stock
for each three (3) warrants and the offer has been extended to the holders of
18,067,500 common stock purchase warrants. Each warrant represents the right to
purchase one share of Common Stock at an exercise price of $0.75 per share. The
offer to exchange shares of Common Stock for warrants will remain open for
acceptance by the holders of the 18,067,500 warrants through 6:00 PM Central
Time on November 7, 2005.
The commencement of the exchange offer is the initial step of a series of steps
intended to be undertaken by Black Warrior for the purpose of recapitalizing the
Company through the elimination of the substantial amount of derivative
securities it has outstanding. These derivative securities include common stock
purchase warrants to purchase 70,761,185 shares of Common Stock and $42,477,902
of principal amount and accrued interest, as of September 30, 2005, of its
outstanding convertible subordinated notes which, as of that date, are
convertible at a conversion price of $0.75 per share into an aggregate of
56,637,203 shares of Common Stock. Additional steps the Company intends to seek
to accomplish in connection with its recapitalization include a one (1) for ten
(10) reverse stock split, an underwritten public offering of shares of the
Company's Common Stock and, subject to meeting all listing requirements, listing
its shares for trading on the Nasdaq Stock Market.
Exhibit 99.2
Prior to commencing the exchange offer, on October 6, 2005, Black Warrior
entered into agreements with the holders of 52,693,685 warrants to exchange
those warrants for 17,564,562 shares of Common Stock. Of the 52,693,685
warrants, an aggregate of 40,755,276 are held by St. James Capital Partners,
L.P. and SJMB, L.P., private investment funds, and 11,938,409 are held by
Charles E. Underbrink and his family and other related entities. Mr. Underbrink
is a Director of Black Warrior and is the Chairman of the general partners of
St. James Capital Partners, L.P. and SJMB, L.P. The exchange of warrants for
shares of Common Stock by Mr. Underbrink and his related entities was completed
on October 6, 2005 and the exchange with St. James Capital Partners, L.P. and
SJMB, L.P. will be completed prior to or on June 30, 2006.
The Agreements with St. James Capital Partners, L.P., SJMB, L.P. and Mr.
Underbrink and his related entities also provide that such persons will convert
an aggregate of $20,277,374 of principal and all accrued interest (which
amounted to $17,111,403 through September 30, 2005) on Black Warrior's
outstanding convertible subordinated notes into shares of Common Stock and,
subject to market conditions, sell those shares to the Company, along with the
shares issued in exchange for their warrants and an additional 5,017,481 shares
held by SJMB, L.P., at the closing time of a proposed underwritten public
offering of Common Stock intended to be undertaken by the Company. The purchase
price paid by the Company for such shares will be the price per share it
receives in the public offering less commissions and expenses of the
underwriters in the public offering. If the public offering is not completed by
June 30, 2006, these agreements to convert and sell the shares in the public
offering will expire.
Following the completion of the exchange offer period, Black Warrior intends to
undertake to complete an underwritten public offering of shares of its Common
Stock. The primary purposes of the offering will be to raise capital for the
Company, including for the possible repayment of a portion of the Company's
senior secured indebtedness, the repayment of any then remaining outstanding
convertible subordinated note indebtedness, the repurchase of the shares of the
Company's Common Stock from St. James Capital Partners, L.P., SJMB, L.P. and the
Underbrink family entities and for general corporate purposes. In addition,
under the terms of a Registration Rights Agreement, the holders of $5,089,125
principal amount and accrued interest (as of September 30, 2005) on outstanding
convertible subordinated notes will have the right, subject to certain
limitations, to include the shares issuable on conversion of the principal and
interest on the notes, as well as the shares of Common Stock issued in exchange
for their warrants, in the registration statement. To the extent that the
managing underwriter of the public offering concludes that the amount of shares
included in the offering for the account of selling stockholders must be
reduced, the Company's agreement with the Underbrink family entities provides
that the Underbrink family entities will reduce their sale of shares to the
Company to enable greater participation in the underwritten public offering by
the selling stockholders. The terms of the underwritten public offering and the
amount and price of the shares of Common Stock proposed to be offered and sold
have not been determined at this time.
Exhibit 99.2
In conjunction with these recapitalization plans, the Company intends, following
the exchange offer period, to effect a reverse split of its shares of Common
Stock on the basis of one (1) share for each ten (10) shares and, subject to
meeting all listing requirements, to seek to list its shares of Common Stock on
the Nasdaq Stock Market and to elect additional members to the Company's Board
of Directors so that a majority of the Board members will be independent
Directors as defined under the Nasdaq Stock Market rules.
The Company also announced that on September 19, 2005, it entered into a letter
of intent to purchase from the holders all of the outstanding equity securities
of BobCat Pressure Control, Inc. ("BobCat"). The purchase price is $51.5
million, less the amount of long-term debt, including current maturities,
payable in cash at the closing of the transaction. BobCat provides snubbing
services to oil and natural gas well operators in the Mid-Continent area of the
United States. Using a series of high pressure blow-out preventers, a snubbing
unit makes it possible to remove and replace down-hole equipment in a well (such
as drill pipe, casing or tubing) in a pressurized environment, allowing an
operator to service a well without using other more disruptive means to control
the pressure in the well. BobCat also provides other oil field services,
including freezing, hot tap services, well control, fishing, rental tool
services and drillouts. The closing of the BobCat acquisition is subject to the
completion by the Company of due diligence inquiries into BobCat, the
negotiation and execution of a definitive purchase agreement, completion of
financing for the transaction and fulfillment of customary closing conditions to
be contained in the definitive purchase agreement. It is intended that the
purchase price for the BobCat securities will be financed with the proceeds of
additional senior secured borrowings, a portion of which, if the acquisition is
completed, is expected will be repaid using a portion of the proceeds from the
proposed underwritten offering.
Exhibit 99.2
Black Warrior is an oil and gas service company providing services to oil and
gas well operators primarily in the United States and in the Gulf of Mexico. It
is headquartered in Columbus, Mississippi. Additional information may be
obtained by contacting Ron Whitter, Chief Financial Officer, at (662) 329-1047
or James H. Harrison, a Director of the Company, at 713-871-0799.
THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OF THE COMPANY
FOR SALE.
THIS NEWS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY,
OR THE SOLICITATION OF AN OFFER TO SELL, ANY WARRANTS. THE FULL DETAILS OF THE
OFFER, INCLUDING COMPLETE INSTRUCTIONS ON HOW TO TENDER WARRANTS, ARE EXPECTED
TO BE MAILED TO WARRANTHOLDERS PROMPTLY. WARRANTHOLDERS SHOULD CAREFULLY READ
THE OFFER LETTER AND OTHER RELATED MATERIALS WHEN THEY ARE AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. WARRANTHOLDERS MAY OBTAIN FREE COPIES,
WHEN AVAILABLE, OF THE TENDER OFFER STATEMENT ON SCHEDULE TO, THE OFFER LETTER
AND OTHER DOCUMENTS THAT WILL BE FILED BY THE COMPANY WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION AT THE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV/ .
WARRANTHOLDERS ALSO MAY OBTAIN A COPY OF THESE DOCUMENTS, WITHOUT CHARGE, FROM
THE COMPANY. WARRANTHOLDERS ARE URGED TO READ THESE MATERIALS CAREFULLY PRIOR TO
MAKING ANY DECISION WITH RESPECT TO THE TENDER OFFER.
Exhibit 99.2
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
With the exception of historical matters, the matters discussed in this press
release are "forward-looking statements" as defined under the Securities
Exchange Act of 1934, as amended, that involve risks and uncertainties. The
Company intends that the forward-looking statements in this press release be
covered by the safe-harbor provisions for forward-looking statements contained
in the Securities Exchange Act of 1934, as amended, and this statement is
included for the purpose of complying with these safe-harbor provisions.
Forward-looking statements include, but are not limited to, the Company's
ability to generate improved revenues and attain and maintain profitability and
cash flow which in turn are based on the stability and level of prices for oil
and natural gas, predictions and expectations as to the fluctuations in the
levels of oil and natural gas prices, pricing in the oil and natural gas
services industry and the willingness of customers to commit for oil and natural
gas well services, the Company's ability to complete the proposed
recapitalization discussed in this press release, the Company's ability to
complete the BobCat acquisition and obtain financing for that acquisition, the
Company's ability to complete the underwritten public offering, the adequacy of
the net proceeds from the underwritten public offering to meet the Company's
requirements, the Company's ability to effect a one (1) for ten (10) reverse
split of its shares of Common Stock, the Company's ability to meet the
requirements to have its shares of Common Stock listed on the Nasdaq Stock
Market, the Company's ability to raise debt or equity capital to recapitalize or
restructure its balance sheet and to obtain additional financing when and if
required, the Company's ability to maintain compliance with the covenants of its
various loan documents and other agreements pursuant to which its securities,
including debt instruments, have been issued and obtain waivers of violations
that occur and consents to amendments as required, the Company's ability to
compete in the premium oil and natural gas services market, its ability to
re-deploy its equipment among regional operations as required, and its ability
to provide services using state of the art tooling. The Company's inability to
meet these objectives or requirements or the consequences resulting from adverse
developments in general economic conditions, changes in capital markets, adverse
developments in the oil and natural gas industry, developments in international
relations and the commencement or expansion of hostilities by the United States
or other governments and events of terrorism, declines and fluctuations in the
prices for oil and natural gas, and other factors could have a material adverse
effect on the Company. Material declines in the prices for oil and natural gas
can be expected to adversely affect the Company's revenues. Various risk factors
could cause the Company's operating results and financial condition to differ
materially from those expressed in any forward-looking statements made by it and
could adversely affect the Company's financial condition and its ability to
pursue its recapitalization, business strategy and other plans. Readers should
refer to the Company's Annual Report on Form 10-K and the risk factors disclosed
therein.