Hyduke Announces $10 Million Equity Financing

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Jan. 24, 2017 /CNW/ - Hyduke Energy Services Inc. ("Hyduke" or the "Company") (TSX: HYD) announces an up to $10,000,000 marketed private placement (the "Private Placement").

Hyduke has entered into an agreement with Lightyear Capital Inc. and PI Financial Corp. (collectively the "Co-Lead Agents"), pursuant to which the Co-Lead Agents have agreed to market, on a commercially reasonable best efforts private placement basis, up to 29,411,764 common shares of Hyduke at a price of $0.34 per common share (the "Offering Price"), for aggregate gross proceeds of $10,000,000.  The Company has also granted the Co-Lead Agents an option, exercisable in whole or in part, prior to closing of the Private Placement, to purchase up to an additional 4,411,764 common shares at the Offering Price, which if exercised in full, would increase the gross proceeds by $1,500,000. The Private Placement is expected to close in early February. The Offering Price was set with reference to the five-day volume weighted average trading price of the common shares on the Toronto Stock Exchange (the "TSX") for the trading period ending January 23, 2017.

The new management and board of directors of the Company initiated a major corporate turnaround and restructuring which commenced in early 2014. The objective was for Hyduke to become a key supplier of manufacturing and fabrication services of a variety of products and equipment to the full spectrum of upstream oil and gas clients including exploration and production companies, midstream companies, EPC (engineering, procurement and construction) contractors, and traditional clients in the drilling and well servicing sector. The Company has been waiting for the right market conditions to expand its historically profitable rig supply (BW RIG) business which has returned to profitability in recent months. In the past year, Hyduke has been vendor-approved by about 100 new customers which the Company anticipates doing business with in 2017 and beyond. As well, as part of this restructuring Hyduke may, from time to time, consider possible acquisitions of compatible assets or companies. With a meaningful recovery underway, Hyduke believes now is the time to execute this plan. The proceeds from the Private Placement will be used for both general corporate purposes and to further the foregoing plan.

This Private Placement is subject to certain conditions including regulatory approvals and specifically, the approval of the TSX. The common shares issued in connection with the Private Placement will be subject to a statutory hold period of four months plus one day from the date of completion of the Private Placement, in accordance with applicable securities legislation.

This press release does not constitute an offer to sell or a solicitation of any offer to buy the common shares in the United States. The common shares have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

Forward looking information

This news release contains forward-looking information relating to the timing of completion of the Private Placement; the receipt of all regulatory approvals including that of the TSX; the use of proceeds of the Private Placement; the exercise of the option granted to the Co-Lead Agents; plans to restructure the Company's business; the potential to undertake acquisitions; 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 use of the net proceeds of the Private Placement will not be subject to change; the timing of closing of the Private Placement; and the timely receipt of all regulatory and third party approvals for the Private Placement, including those required by the TSX and any consents required from the Company's lenders to utilize the net proceeds of the Private Placement as desired. 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 Private Placement 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 Private Placement; the failure to obtain the necessary consents and approvals of the Company's lenders; that the Company's budget and plans for the net proceeds from the Private Placement will be amended in a manner that is different from those set forth herein; that the Company may have trouble attracting new customers and/or existing customers may have cash constraints; 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.

For further information: Patrick F. Ross, President and CEO, Tel 403 528 1095, Email pfross@me.com

RELATED LINKS
http://www.hyduke.com

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