NQL Drilling Tools Announces Completion of Private Placement by Lime Rock Partners and CanFund


NISKU, Alberta, Sept. 3 – NQL Drilling Tools Inc. (TSX-NQL.A) (the “Company”) is pleased to announce the completion of its previously announced private placement of 6,349,300 Class “A” common shares (“Common Shares”) to Lime Rock Partners II, L.P. (“Lime Rock”) and 1,587,300 Common Shares to CanFund VE Investors II, L.P. (“CanFund”), at a price of $3.15 per share, for a total of 7,936,600 Common Shares and total gross proceeds of approximately $25 million.

With the closing of this private placement, the Company has successfully completed another component of its previously announced refinancing package. The Company had previously closed a $10 million short term loan arrangement with CanFund and successfully negotiated and entered into a loan extension arrangement with the Company’s Canadian senior bank lenders.

The Company will use the net proceeds of the private placement to repay more than $20 million of the Company’s $34.6 million bridge loan facility with its Canadian senior bank lenders, while retaining $2 million for working capital purposes.

At a shareholders’ meeting held on September 2, 2003, shareholders of the Company approved the private placement, and the waiver of the application of the Company’s shareholder rights protection plan to the private placement, the Company’s planned $22 million rights offering and related transactions. Following completion of the private placement, in accordance with the terms of the shareholder rights protection plan, all rights issued under the shareholder rights protection plan are being redeemed by the Company.

In connection with the completion of the private placement, Thomas R. Bates, Jr. and John Clarkson (both nominees of Lime Rock) were appointed to the board of directors of the Company, joining R. Tim Swinton (Chairman), Dean Livingstone, Bruce R. Libin, Derek Martin and Glen D. Roane as directors of the Company.

The Company intends to proceed with its previously announced $22 million rights offering by mid-September, subject to obtaining final regulatory approvals.

This news release is not for dissemination in the United States or to any United States news services. The Common Shares of the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

NQL Drilling Tools Inc. is an industry leader in providing downhole tools, technology and services used primarily in drilling applications in the oil and gas, environmental and utility industries on a worldwide basis.


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