NISKU, AB, Sept. 28, 2012 /CNW/ - Hyduke Energy Services Inc. ("Hyduke") (TSX: HYD) is pleased to provide a corporate update on the company's strategic direction.
As released earlier today, the proposed Arrangement Agreement with DoAll Industries has been terminated. This process has highlighted the significant gap in Hyduke share price as determined in the public markets and the fair value of the company using accepted business valuation methods. For example, at the time the proposed Arrangement Agreement was entered into, the proposed purchase price represented a 109% share premium over the publically traded share price. Additionally, the proposed purchase price was at the low end of a range of value using accepted business valuation methods and in fact was below the fair value of the net assets of the company.
Enhancing shareholder value is a priority. Hyduke expects to achieve this by continuing to build company value firstly by increasing revenue and earnings and secondly, to increase communication of this value to the investment community. Gordon McCormack, President and CEO, reports "Hyduke continues to represent significant value to shareholders. Our goal is to see this value reflected in the share price. Currently, Fiscal 2012 is on track to be a record year as measured by revenue. Our market development efforts in Canada and internationally have been very successful as measured by increased market share in Canada and significant increase in international revenues. We are very confident that we can continue this growth within Canada and internationally in the future. Additionally, current investment in stronger project management practices combined with accessing lower cost manufacturing through our Houston, Texas facility are expected to shorten project deliveries and improve gross margins resulting in stronger financial results. Key to enhancing shareholder value will be to continue our existing strategic focus to grow our markets worldwide and strengthen financial performance combined with an increased communication strategy to the investment community."
The Board of Directors and Executive Management of Hyduke are examining corporate strategy and are committing to a renewed strategic focus in order to unlock this value as represented in the public markets.
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 project management;
- 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:
Gordon R. McCormack
President and Chief Executive Officer