Newalta Further Structures Business to Withstand Lower Oil Price Environment: Suspends Dividend, Reduces 2016 Capital Budget, and Actions Incremental Cost Rationalization

CALGARY, ALBERTA--(Marketwired - Feb. 16, 2016) - Newalta Corporation ("Newalta") (TSX:NAL) today announced that it has taken further actions to align its cost structure to withstand a lower for longer oil price environment.

Key actions include the following:

• Suspending the quarterly dividend - Newalta remains focused on preserving its financial health in this low commodity price environment and, while recognizing the importance of its dividend to shareholders, maintaining its balance sheet in this environment takes precedence. As a result, the Board of Directors has suspended the quarterly dividend effective March 31, 2016. This suspension represents $14 million in annualized cash flow savings.

• Reducing total capital spending budget - Based on the current outlook for the year, capital expenditures in 2016 are targeted to total approximately $15 million, down from previous guidance of $30 to $40 million.

• Incremental cost rationalization - Newalta expects to realize $12 million in annualized cost rationalization savings ($10 million in 2016) based on eliminating positions across General and Administrative (G&A) and operations and further consolidating excess office space. Combined with actions taken in 2015, Newalta has reduced its cost base in excess of $50 million.

John Barkhouse, President and Chief Executive Officer said, "We are taking the necessary steps during this period of low oil prices to emerge with a stronger financial position when prices and activity recover. All of these initiatives are designed to protect our balance sheet by allowing us to better manage our debt position. Combined, the actions announced today will positively impact cash flow by approximately $40 million in 2016." 

Newalta is committed to ensuring its financial flexibility in 2016. As at September 30, 2015, approximately 80 percent of Newalta's long-term debt was comprised of senior unsecured term debt with fixed interest rates and maturity dates of November 14, 2019 and April 1, 2021, respectively. This set of laddered maturity dates ensures that Newalta has the ability to manage its debt position without having a significant maturity burden in any given year.

Mr. Barkhouse continued, "Our focus remains on managing costs and being prudent and disciplined with all expenditures. We will continue to structure our business to operate within a lower oil price environment. We remain well positioned to generate strong returns and growth from our investments, with significant torque in our business model to any recovery in oil price and activity levels."

Newalta is a leading provider of innovative engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams. We simplify the critical challenges of sustainable environmental practices through the use of advanced processing capabilities deployed through a differentiated business model. We serve customers onsite directly at their operations and through a network of locations throughout North America. Our proven processes and excellent record of safety make us the first-choice provider of sustainability-enhancing services for oil and gas customers. With a highly skilled team of people, a two-decade track record of innovation and a commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. We are Sustainability Simplified™. Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.

This press release contains forward-looking information. More particularly, this press release contains forward-looking information relating to Newalta's business prospects and strategy including related capital expenditure programs and timelines; and the realization of anticipated benefits of cost reduction initiatives and growth capital investments. Although Newalta believes that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on it because Newalta can give no assurance that it will prove to be correct. Forward-looking information is based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Newalta and described in the forward-looking information contained in this press release. Among the various factors that could cause results to vary materially from those indicated in the forward-looking information include: general market conditions of the industries we service; strength of the oil and gas industry, including drilling activity; fluctuations in commodity prices; the availability of financing alternatives; debt service and future capital needs; and the success of our growth strategies. Readers should also be aware that the forward-looking information is affected by the risk factors described in Newalta's annual information form and those set forth from time to time in Newalta's other continuous disclosure filings with Canadian securities regulatory authorities, which are available under Newalta's SEDAR profile at www.sedar.com.

The forward-looking information contained in this press release is made as of the date hereof and Newalta undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.