Cathedral Energy Services Ltd. Announces $10.1 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwired - Jan. 24, 2017) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Cathedral Energy Services Ltd. ("Cathedral" or the "Company") (TSX:CET) is pleased to announce that it has entered into an agreement with GMP FirstEnergy (the "Underwriter") under which the Underwriter has agreed to purchase for resale to the public, on a bought deal basis, 9,000,000 common shares of the Company ("Common Shares") at $1.12 per Common Share (the "Offering Price") for aggregate gross proceeds of $10,080,000 (the "Offering"). The Underwriter has been granted an option to purchase up to an additional 1,350,000 Common Shares at a price of $1.12 per Common Share to cover over-allotments exercisable in whole or in part at any time until 30 days after the closing of the Offering (the "Over-Allotment Option"). Total aggregate gross proceeds raised under the Offering, including proceeds raised from the exercise of the Over-Allotment Option, will be approximately $11,592,000 if the Over-Allotment Option is exercised in full. In addition to and in conjunction with the Offering, certain officers, directors and employees of Cathedral and their associates intend to purchase up to an additional 1,116,071 Common Shares at a price of $1.12 per Common Share on a private placement basis for additional gross proceeds to the Company of up to $1,250,000 (the "Concurrent Private Placement").

The net proceeds of the Offering and Concurrent Private Placement will initially be used to repay bank indebtedness and then fund ongoing working capital requirements driven by increased business activity, increase capacity through funding equipment upgrades and capital expenditures, and for other general corporate purposes.

The Offering will be completed by way of short form prospectus in all of the provinces of Canada other than Quebec and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended, (the "U.S. Securities Act"). The Offering and the Concurrent Private Placement are subject to customary conditions including receipt of applicable regulatory approvals and are expected to close on or about February 15, 2017.

The securities offered have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall 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.

ABOUT CATHEDRAL ENERGY SERVICES LTD.

Cathedral, based in Calgary, Alberta, is incorporated under the Business Corporations Act (Alberta) and operates in the U.S. under Cathedral Energy Services Inc. The Company is publicly traded on the Toronto Stock Exchange under the symbol "CET". Cathedral is a trusted partner to North American energy companies requiring high performance directional drilling services. We work in partnership with our customers to tailor our equipment and expertise to meet their specific geographical and technical needs. Our experience, technologies and responsive personnel enable our customers to achieve higher efficiencies and lower project costs. For more information, visit www.cathedralenergyservices.com.

ADVISORY

This press release contains certain statements or disclosures relating to Cathedral, the Offering and the Concurrent Private Placement that are based on the expectations of Cathedral as well as assumptions made by and information currently available to Cathedral which may constitute forward-looking information under applicable securities laws. In particular, statements related to the timing and completion of the Offering and the Concurrent Private Placement, the total aggregate gross proceeds to be raised under the Offering (including in connection with any exercise of the Over-Allotment Option) and the Concurrent Private Placement and the use of proceeds in connection therewith contain forward-looking information. Assumptions have been made with respect to, among other matters, general economic and market conditions and the timely receipt of required regulatory approvals. Many factors could cause the performance or achievement by Cathedral to be materially different from any that is expressed or implied by such forward-looking information, including without limitation, general economic and market conditions, industry conditions, market and commodity price volatility and the Company's financial and operational performance and results. Additional information on these and other factors that could affect Cathedral's operations and financial performance are included in Cathedral's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website (www.sedar.com)). Cathedral disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA