NISKU, AB, Nov. 23, 2012 /CNW/ - Hyduke Energy Services Inc. ("Hyduke"
or the "Company") (TSX:HYD) provides a strategic update to shareholders
in advance of the expiry of Do All Industries Ltd. ("DoAll")
unsolicited offer of $0.83 per common share.
Hyduke's Board of Directors (the "Board") would like to reiterate to
shareholders that the Board maintains its belief that the DoAll
unsolicited bid of $0.83 per common share is grossly inadequate, not in
the best interests of Hyduke shareholders, and remains firm in their
unanimous recommendation to reject the offer.
This recommendation is based on a number of reasons including:
current year record sales growth,
the fair value of net assets,
further analysis of strategic options relating to Hyduke's value, and
all other reasons set out in the Directors' Circular.
Hyduke's Board would also like to re-confirm their commitment to the
strategic review process initiated earlier. The Company and its
advisors are actively continuing with an ongoing process to find
strategic alternatives that increase shareholder value as measured in
the public market.
Hyduke's balance sheet strength is a major asset for a company operating
in a cyclical industry. Specifically, during the last three months,
Hyduke successfully delivered on two major turn-key drilling rig
projects and Hyduke's customer paid two major milestone payments
(approximately $19 million) in accordance with the contract.
Accordingly, Hyduke's cash position and liquidity on the balance sheet
is very strong.
Hyduke's successful strategy to maintain a strong balance sheet allows
Hyduke options going forward. One of those options is to implement a
share buyback plan through a Normal Course Issuer Bid. The Board is of
the opinion that the public market trading value is extremely low
relative to the value of the Company and accordingly, is in the process
of submitting a request to the TSX to implement the Normal Course
Hyduke is in a growth phase. Significant amounts of this growth are
expected to come from markets outside of Canada. Hyduke is
successfully executing on this growth strategy. Hyduke recently
released its Fiscal 2012 third quarter results which demonstrated
record revenue growth and in particular, record revenue growth in
international markets. On a trailing twelve month basis, Hyduke has
generated over $117 million in total revenue. Over $51 million (44%)
of this total revenue is coming from international markets. This
record level of revenue has been achieved in a flat Canadian market and
an international economy that shows some uncertainty. Clearly,
Hyduke's strategic growth plan is working.
In conjunction with this sales growth, Hyduke is focused on improving
margins through implementing lean manufacturing principles combined
with accessing a lower manufacturing cost environment through its new
facility in Houston, Texas. Hyduke is very confident that successful
implementation of its lean manufacturing projects will result in
Hyduke's Board and Management remain committed to its shareholders to
unlock the value discrepancy in its publically traded share price and
to continue to develop and execute sound strategic plans with the
objective of growing the company and creating value for shareholders.
Hyduke is an integrated oilfield services company with over thirty years
experience in the manufacture, repair and distribution of oilfield
equipment and supplies in Canada and worldwide. Hyduke specializes in
providing customized, integrated solutions to the drilling and well
service industries including:
Turn-Key Equipment - drilling rig and service rig packages including in-house design,
engineering and drafting, major component procurement and overall
Life Cycle Management - inspection, certification, service, repair and supply services
throughout the operating life of the drilling or well service rig; and
Single Source Supply - providing new capital equipment, repair and maintenance on existing
capital equipment and supply of operating consumables.
Hyduke is headquartered in Nisku, Alberta and has facilities in
Edmonton, Calgary, Nisku, Leduc, Red Deer and Lloydminster, Alberta and
Houston, Texas, USA.
Hyduke operates in three operating segments. The Drilling Equipment
segment includes manufacture and repair of land based drilling rigs and
drilling rig structures, supply and repair of drilling rig equipment,
procurement and distribution of drilling supplies, supply and service
of pneumatic controls, engineering and design of drilling rigs and
inspection and certification of drilling rig equipment. The Well
Service Equipment segment includes manufacture and repair of well
service rigs, mobile and skid mounted pump units and other well service
equipment, procurement and distribution of well servicing supplies,
supply and service of pneumatic controls, engineering and design of
well service rigs and inspection and certification of well service
equipment. The Other Oilfield Services segment includes manufacture
and distribution of cased hole and overburden drill bits and drilling
systems, custom and production machining services, distribution and
repair of truck-mounted equipment including cranes, winches and dump
boxes and industrial sandblasting, painting and collision repair.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this News Release.
Forward Looking Statements
This report contains certain forward-looking statements under the
heading "Outlook" and elsewhere concerning future events or the
Company's operations, anticipated financial performance, business
prospects and strategies of Hyduke. Forward-looking information
typically contains statements with words such as "anticipate",
"believe", "estimate", "expect", "plan", "intend" or similar words
suggesting future outcomes or outlooks on, without limitation,
estimates of business activity, supply and demand for the Company's
products, the estimated amounts and timing of capital expenditures,
anticipated future debt levels, or other expectations, beliefs, plans,
objectives, assumptions or statements about future events or
performance. Readers are cautioned not to place undue reliance on
forward-looking information. By its nature, forward-looking information
involves numerous assumptions, inherent risks and uncertainties both
general and specific that may cause actual future results to differ
materially from those contemplated and contribute to the possibility
that the predictions, forecasts, projections and other forward-looking
statements will not occur. These factors may affect anticipated
earnings or assets and include, but are not limited to: industry
activity levels, market liquidity, customer credit risk, competition,
oil and gas prices, product liability, fixed price contracts,
development of new products, uninsured and underinsured losses, access
to additional financing, source of supply of raw material and third
party components, availability of key personnel, agreements and
contracts, government regulations, foreign exchange exposure, interest
rate risk, international scope of operations, environmental health and
safety regulations and Hyduke's anticipation of and success in managing
the risks implied by the foregoing. The Company cautions that the
foregoing list of important factors is not exhaustive. The Company
believes that the expectations reflected in the forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this report should not be unduly relied upon.
The forward-looking statements in this report speak only as of the date
of this report. Hyduke undertakes no obligation to update publicly or
otherwise revise any forward-looking information, whether as a result
of new information, future events or otherwise, except as required
pursuant to applicable securities legislation.
SOURCE: Hyduke Energy Services Inc.
For further information:
Chair of the Board
Gordon R. McCormack
President and Chief Executive Officer