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NISKU, AB, March 1, 2017 /CNW/ - Hyduke Energy Services Inc.
("Hyduke" or the "Company") is pleased to announce that it has entered into a Share Purchase Agreement (the
"Agreement") to purchase all of the issued and outstanding shares of Western Manufacturing Ltd. ("Western"), a
private corporation engaged in the business of production tank manufacturing and other oilfield equipment manufacturing. Based in
Hythe, Alberta, Western is a leading manufacturer of production vessels and related equipment
located in the heart of the Montney and Duvernay oil and gas
development plays in northwest Alberta and northeast British
Columbia. In addition, Hyduke will acquire the assets of Ledarco Industries Ltd. an affiliated company to Western involved
in the regional transportation of manufactured components, raw materials and finished products.
Total consideration for the shares of Western and the assets of Ledarco will total approximately $5.5
million to be satisfied by a combination of cash, debt assumption, the initial issuance by Hyduke of 735,295 common shares
and an additional amount of common shares, not to exceed 1,050,000 common shares, to be settled within 180 days after
closing based on post-closing financial adjustments. The deemed price of the issued shares will be $0.48 per share, which is equal to the volume weighted average price on the Toronto Stock Exchange (the
"TSX") for the five trading days prior to and including February 28, 2017. The
transaction is expected to close as soon as possible with an outside date of April 30, 2017.
Western/Ledarco are significant regional players in the design, manufacture and fabrication of production equipment and related
equipment including tanks, frac fluid vessels, frac sand handling equipment, and other equipment essential to the exploitation
and production of oil and gas and natural gas liquids. The acquisition of the shares of Western and the assets of Ledarco are
congruent with Hyduke's stated strategy to expand beyond the fabrication and support of drilling and well servicing rigs and
related oilfield services equipment to become a diversified designer, fabricator and manufacturer of oilfield equipment required
for the drilling, completion, production and maintenance of upstream oil, natural gas and natural gas liquids.
Lonny Thiessen, founder and CEO of Western, will remain with Western as President of the
subsidiary. It is the intention of Hyduke and Western to integrate to the greatest degree possible key functions such as sales,
procurement, inventory, fabrication and delivery to provide clients with quality products on time and on budget. The combined
operation will have significant capacity for new orders. On February 17, 2017 Hyduke closed an
equity financing with net proceeds of $12 million. After the Western/Ledarco acquisition, the
Company will still have significant working capital to be able to pursue major contracts and orders and fulfill its obligations
to key stakeholders – clients, employees, vendors and capital providers. The regional presence with "boots on the ground" serving
markets in northwest Alberta and northeast British Columbia
will create opportunities for the expansion of other Hyduke business units such as BW Rig, an established supplier of operating
supplies for drilling and service rigs.
Completion of the transaction as outlined above is subject to the fulfillment of certain conditions, which includes approval
by the TSX for the listing of additional common shares and certain conditions precedent, typical of a transaction of this
nature.
Forward looking information
This news release contains forward-looking information relating to the timing of completion of the transaction; the receipt
of all regulatory approvals including that of the TSX; and other statements that are not historical facts. Such forward-looking
information is subject to important risks, uncertainties and assumptions. The results or events predicated in this
forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place
undue reliance on this forward-looking information.
Forward-looking information is based on certain factors and assumptions regarding, among other things, the timing of
closing of the transaction; and the timely receipt of all regulatory and third party approvals for the transaction, including
those required by the TSX and any consents required from other third parties, including but not limited to, lenders, supplier or
customers. While the Company considers these assumptions to be reasonable based on information currently available to it, they
may prove to be incorrect.
Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual
results to differ materially from what is currently expected. These factors include risks associated with that the transaction
may not close when planned (or at all) or on the terms and conditions set forth herein; the failure of the Company to obtain all
necessary regulatory and third party approvals (including the TSX) for the transaction; the failure to obtain the necessary
consents and approvals of third parties; volatility in market prices for oil and natural gas; and the general economic conditions
in Canada.
You should not place undue importance on forward-looking information and should not rely upon this information as of any
other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information
at any particular time, except as required by law.
The TSX has neither reviewed nor approved this release.
SOURCE Hyduke Energy Services Inc.
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