/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

CALGARY, Jan. 27, 2016 /CNW/ - Cathedral Energy Services Ltd. (TSX:CET) ("Cathedral") announces it has negotiated certain amendments to its credit facility with The Bank of Nova Scotia and National Bank of Canada (the "Amended Facility").  The Amended Facility has less restrictive financial covenants than the prior facility terms.  The Amended Facility provides for credit availability of $45 million, representing a $15 million decrease from the prior amended credit facility. The Amended Facility matures in August, 2017, consistent with the duration of the prior facility.

The financial covenants associated with the Amended Facility are as follows:

The Amended Facility has certain restrictions, including, but not limited to; paying dividends, utilization of the accordion feature, enhanced lender financial reporting and a cap on any litigation settlement payments without lender approval.

As of December 31, 2015, the total drawn facility was $33.8 million, which included a $32.4 million term loan and $1.4 million in letters of credit.  As of the date hereof, Cathedral is in compliance with the terms and conditions of its Amended Facility credit facility.

The terms of the Amended Facility demonstrates the commitment the banking syndicate has with Cathedral.  We continue to focus on improving our cost structure, enhancing market share, providing quality service to our customers and pursuing revenue growth and other business improvement opportunities.

Cathedral also announces that as part of strategy to deal with the current low commodity price environment and current uncertainty in the oilfield services sector its staff has accepted additional wage rollbacks effective January 1, 2016.  Aggregate wage and cash benefit rollbacks for 2015 and 2016 range from 17% to 28% for staff and management and up to 50% for field positions.  Cathedral has also adopted a minimal capital expenditure program for 2016 which will be reviewed quarterly.

Cathedral previously disclosed a potential claim from one of its U.S. clients alleging a down-hole drilling incident.  This client has recently filed a statement of claim in connection with the incident and has indicated damages in the amount of $3.7 million USD.  Cathedral intends to vigorously defend this action.

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to Cathedral 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 continue to focus on improving our cost structure, enhancing market share, providing quality service to our customers and pursuing revenue growth and other business improvement opportunities, a minimal capital expenditure program for 2016 which will be reviewed quarterly and Cathedral intends to vigorously defend the action related to an alleged down-hole drilling incident  may contain forward-looking information. Many factors could cause the performance or achievement by Cathedral to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information. Cathedral's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website (www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. 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.

Cathedral Energy Services Ltd. (the "Company" or "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 and dependable flowback and production testing solutions. 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.

SOURCE Cathedral Energy Services Ltd.