Leading Independent Proxy Advisor, ISS, Recommends Shareholders Vote Against Calfrac's Recapitalization Transaction

CISCO, Texas, Sept. 8, 2020 /PRNewswire/ - Wilks Brothers, LLC ("Wilks") is pleased to announce that leading independent proxy advisor, Institutional Shareholder Services ("ISS"), has recommended that Shareholders of Calfrac Well Services Ltd. ("Calfrac" or the "Company") (TSX: CFW) vote AGAINST Calfrac's Recapitalization Transaction (the "Management Transaction") at the special meeting of Shareholders by using ONLY their BLUE proxy form. The proxy deadline is September 14, 2020 at 5pm MST.

ISS made its wholly independent proxy voting recommendation to vote AGAINST the Management Transaction after carefully reviewing the facts and arguments made by both Wilks and Calfrac. In recommending that Shareholders vote AGAINST the Management Transaction, ISS made many of the same observations as other leading independent analysts including CIBC World Markets, BMO Capital Markets, Raymond James Ltd and Cormark Securities Inc., who all noted the superior value delivered to Shareholders under the Wilks' Superior Alternative Proposal. The independent recommendation from ISS is a critical piece of information to assist Shareholders with their proxy voting decisions.

ISS makes the following compelling points in recommending that Shareholders vote the BLUE proxy AGAINST the Management Transaction:

Wilks' Superior Alternative Proposal Delivers Superior Shareholder Recovery

"… it appears that the Wilks Proposal provides a significantly higher dollar recovery to the company's existing shareholders than under the management proposal. As indicated by the dissident, using an enterprise value of $374 million, the value implied by the trading prices of Calfrac's public securities, the dollar recovery under the Wilks Proposal to most of Calfrac's stakeholders appears greater than under the management proposal".

Governance Issues Relating to Calfrac's Conflicted Process

"The [Management] Transaction is a related party transaction, as [Ron] Mathison, the company's Executive Chairman and a 19.8% Shareholder, participates in the transaction".

"… it appears Chairman Mathison was involved in negotiating significant elements of the [Management] Transaction".

"Despite the related party nature of this transaction, the board did not appoint a special committee of independent directors to conduct a strategic review process and to negotiate the restructuring. Such committee was only formed to review the Wilks Proposal and to provide a response to the proposal. Given the potential conflict, best practice would have been to form a special committee early in the process and to exclude potentially conflicted directors from negotiating on behalf of the company and from voting on any related party transactions involving such directors".

Wilks' Takeover Bid Guarantees Shareholders a Premium-to-Market Recovery

"On Sept. 1, 2020, Wilks announced its intention to formalize a takeover bid to purchase all outstanding share of Calfrac at $0.18 per share within 10 days and prior to the Sept. 17 special meeting. The offer price represents a premium of 20 percent to the unaffected share price, being the prior day's closing price of $0.15 per share."

The Takeover Bid will be conditioned on Shareholders voting AGAINST the Management Transaction. ISS recognized that by Wilks making a Takeover Bid, the risk to shareholder recovery by voting against the Management Transaction was entirely eliminated, no matter what Calfrac does next.

ISS Recommends Voting AGAINST the Calfrac Transaction 

"While the [Management] Transaction involves many stakeholders, ISS' analysis is primarily provided to the benefit of shareholders. Clearly, the Wilks Proposal provides greater benefits to existing shareholders than the [Management] Transaction, as they would hold a larger equity stake under the Wilks Proposal in a more de-levered company than under the [Management] Proposal. Under the management proposal, shareholders would be subject to even further dilution, as in all likelihood additional financing will be needed sooner rather than later".

"Given that Wilks' debt reduction plan offers superior value to shareholders and its premium takeover bid mitigates the risk associated with renewed debtholder negotiations, shareholders are advised to use the dissident (blue) proxy card to vote AGAINST management's proposed Recapitalization Transaction".

Shareholders can only receive a premium recovery by voting AGAINST the Management Transaction using their BLUE proxy. THE PROXY DEADLINE IS SEPTEMBER 14, 2020 AT 5PM MST.

Another proxy advisor, Glass Lewis & Co. ("Glass Lewis") has also provided a voting recommendation and shares many of Wilks' and ISS' concerns relating to the inherently conflicted governance process conducted by Calfrac and the dismal recoveries to Shareholders under the Management Transaction, as it states:

"To be sure, we share certain of Wilks' concerns regarding the participation of the Company's chairman in the proposed transaction via his personal holding company, the seemingly favorable treatment of a select group of investors (generally creditors) at the expense of common shareholders and the degree to which current common shareholders will see their interests diluted upon completion of the transaction and conversion of the 1.5 Lien Notes".

Glass Lewis' ultimate recommendation for the Management Transaction, however, is clearly not in the best interests of Shareholders. Wilks also notes Glass Lewis' acknowledged conflict of interest: One of their owners, Alberta Investment Management Company, is one of Calfrac's largest stakeholders.

The ONLY way to Protect Your Investment is by Voting the BLUE Proxy AGAINST the Management Transaction.

If you have already voted AGAINST the Management Transaction using the BLUE proxy, you do not need to do anything further and we thank you for your support.

If you have yet to vote or want to change your vote, you are encouraged to vote using only the BLUE proxy. Please disregard any other proxies you receive. If you have already submitted a proxy solicited by the Company, you may still change your vote and protect your economic interests by voting your BLUE proxy today. The later dated proxy will supersede any earlier proxy submitted.

To learn more about the reasons for Wilks' voting recommendations, which ISS supports, shareholders may visit www.afaircalfrac.com.

Wilks reminds all Shareholders to VOTE AGAINST THE MANAGEMENT TRANSACTION USING THE BLUE VOTING FORM THAT HAS BEEN SENT TO YOU FROM WILKS BY THE PROXY DEADLINE OF SEPTEMBER 14, 2020 AT 5PM MST.

Questions/ Voting Assistance

Shareholders who have questions or require voting assistance, may contact our communications advisor and proxy solicitation agent, Laurel Hill Advisory Group, toll-free at 1-877-452-7184 (North America), or +1-416-304-0211 (outside North America), or by e-mail at [email protected].

ADDITIONAL DISCLOSURE

Wilks is relying on the exemption under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations and exemptive relief provided by the Alberta Securities Commission in an Order dated August 4, 2020 (the "Order") to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations. This solicitation is being made by Wilks, and not by or on behalf of the management of Calfrac. Wilks has engaged Laurel Hill Advisory Group to act as our communications advisor and proxy solicitation agent.

Based upon publicly available information, Calfrac's registered office is at 4500, 855-2^nd Street S.W. Calgary, Alberta, Canada, T2P 4K7, and its head office is at 411-8^th Avenue S.W. Calgary, Alberta, Canada, T2P 1E3. Wilks is soliciting proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws (including the Order), conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. In addition, this solicitation may be made by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person. All costs incurred for the solicitation will be borne by Wilks.

Wilks and Dan and Staci Wilks together hold 28,720,172 Common Shares, representing approximately 19.78% of the issued and outstanding Common Shares of Calfrac on the basis of Calfrac's disclosure in its management information circular dated August 17, 2020. that there are 145,616,827 Common Shares outstanding.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain information in this Press Release may constitute "forward-looking information", as such term is defined in applicable Canadian securities legislation, about the objectives of Wilks as they relate to Calfrac. All statements other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions.

Material factors or assumptions that were applied in providing forward-looking information include, but are not limited to: the intention of Wilks to make a formal take-over bid for the shares of Calfrac and the results of such bid; that required regulatory approvals will be obtained on terms satisfactory to Wilks; the reaction of Calfrac's Board and management to the proposed Premium Bid; the response to and outcome of any applications to Courts or regulators relating to the transactions described herein or otherwise that may be made by or against Calfrac or Wilks.

Forward-looking information contained in this Press Release reflects current reasonable assumptions, beliefs, opinions and expectations of Wilks regarding future events and operating performance of Calfrac and speaks only as of the date of this  Press Release. Such forward-looking information is based on currently publicly available competitive, financial and economic data and operating plans and is subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Calfrac, or general industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Many other factors could also cause Calfrac's actual results, performance or achievements to vary from those expressed or inferred herein, including, without limitation, the success of the proposed Premium Bid, the reaction of the market and Calfrac's shareholders, creditors and customers to the Premium Bid, the impact of legislative, regulatory, competitive and technological changes; the state of the economy; credit and equity markets; the financial markets in general; price volatility; interest rate and exchange rate fluctuations; general economic conditions and other risks involved in the hydraulic fracking industry. The impact of any one factor on a particular piece of forward-looking information is not determinable with certainty as such factors are interdependent upon other factors, and Wilks' course of action would depend upon its assessment of the future considering all information then available.

Should any factor affect Calfrac in an unexpected manner, or should any assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the events predicted. All of the forward-looking information reflected in this Press Release is qualified by these cautionary statements. There can be no assurance that the results or developments anticipated by Wilks will be realized or, even if substantially realized, that they will have the expected consequences for Calfrac, Calfrac's shareholders or Wilks. Forward-looking information is provided, and forward-looking statements are made as of the date of this Press Release and except as may be required by applicable law, Wilks disclaims any intention and assumes no obligation to publicly update or revise such forward-looking information or forward-looking statements whether as a result of new information, future events or otherwise.

Nothing herein shall be deemed to be an acknowledgement or acceptance by Wilks that the terms of the Calfrac Recapitalization Transaction are legally permissible, appropriate or capable of implementation.

SOURCE Wilks Brothers, LLC.