Hyduke Energy Services Inc. announces results for three and twelve months ended December 31, 2007

    EDMONTON, March 31 /CNW/ - Hyduke Energy Services Inc. (HYD - TSX),
announced operating results for the three and twelve months ended December 31,
2007. A summary of those results is as follows:

                                      Three        Two     Twelve      Eight
    Selected Income Statement        Months     Months     Months     Months
     Information                      Ended      Ended      Ended      Ended
                                   December   December   December   December
                                         31,        31,        31,        31,
                                       2007     2006(2)      2007     2006(2)
    ($000's, except per share data)

    Revenues                          8,706     14,251     63,762     65,708
    Gross margin(1)                   1,180      2,301     11,559     12,884
    Gross margin (%)                  13.6%      16.1%      18.1%      19.6%
    EBITDAS(1)                         (450)     1,344      6,164      9,324
    Net income (loss)                  (722)     1,583      2,245      6,293
    Earnings (loss) per share -
     basic ($)                       (0.033)     0.072      0.102      0.287
    Earnings (loss) per share -
     diluted ($)                     (0.033)     0.072      0.102      0.287

    Selected Balance Sheet Information                       As At
    ($000's, except ratios)                        December 31   December 31
                                                          2007          2006

    Total assets                                        48,552        57,802
    Total long-term debt                                 2,414         2,933
    Total shareholders' equity                          36,266        33,757
    Current ratio (current assets divided by
     current liabilities)                         3.39 to 1.00  2.01 to 1.00
    Debt to Equity ratio (long-term debt divided
     by shareholders' equity)                     0.07 to 1.00  0.09 to 1.00

    (1) The Company uses certain non-GAAP measures as indicators of financial
        performance and believes that these non-GAAP measures provide useful
        supplemental information to investors. EBITDAS and gross margin are
        measures used by the Company that do not have a standardized meaning
        prescribed by GAAP. The Company's method of calculating EBITDAS and
        gross margin may differ from other companies and may not be
        comparable to similar measures presented by other companies.

        EBITDAS is defined as earnings before interest, taxes, depreciation
        and amortization, gain or loss on sale of property, plant and
        equipment, gain or loss on foreign exchange, and stock-based
        compensation. Management believes that in addition to net income,
        EBITDAS is a useful supplemental measure as it provides an indication
        of the operating cash flow generated by the Company's principal
        business activities. EBITDAS is not intended to represent an
        alternative to net income determined in accordance with GAAP as an
        indicator of the Company's performance.

        Gross margin is defined as revenue less cost of sales. Cost of sales
        include direct materials, direct labor, variable and fixed
        manufacturing overhead, and other costs closely associated with the
        manufacture of goods and the provision of services.

    (2) Hyduke changed its fiscal year end from April 30 to December 31
        effective December 31, 2006. For purposes of the following discussion
        and analysis, the annual results analysis compares the twelve months
        ended December 31, 2007 to the eight month period ended December 31,
        2006. For the purposes of the quarterly results analysis, the three
        months ended December 31, 2007 is compared to the two month period
        ended December 31, 2006.

    Hyduke experienced a significant decrease in revenue in 2007 Q4 and for
the year ended December 31, 2007 due to a very rapid and extensive slowdown in
new capital equipment expenditures by drilling and well service contractors
working in Western Canada. This halt to new equipment investment in the
industry has significantly decreased the amount of Turn-Key Equipment projects
domestically. Additionally, continued weakness in drilling and well service
activity in Western Canada has negatively impacted revenue in Life Cycle
Management businesses. Revenues of $63.8 million for the twelve months ended
December 31, 2007 and $8.7 million in 2007 Q4 represent average monthly
revenues in the respective periods of $5.3 million and $2.9 million. This
represents decreases of 35% for the year and 65% for Q4 over average monthly
revenues of $8.2 million for the eight months ended December 31, 2006.
Mitigating the Western Canadian slowdown has been the continued success of the
Company's international development with international revenue for the year of
$13.3 million representing 21% of total revenue.
    Reduced gross margins are due primarily to reduced revenue levels.
Additionally, the Company has experienced more competitive pricing during the
Western Canadian slowdown. Gross margin of $11.6 million for the twelve months
ended December 31, 2007 and $1.2 million in 2007 Q4 represent average monthly
gross margin of $1.0 million and $0.4 million respectively. This represents
decreases of 38% for the year and 75% for Q4 over average monthly gross margin
of $1.6 million for the eight months ended December 31, 2006. Gross margin
percentage of 18.1% for the twelve months ended December 31, 2007 represents a
decrease of 8% over the gross margin percentage of 19.6% for the eight months
ended December 31, 2006.
    Reduced EBITDAS is due primarily to a 35% reduction in revenue and a
slight reduction (8%) in gross margin percentage for the year. EBITDAS of
$6.2 million for the twelve months ended December 31, 2007 represents average
monthly EBITDAS of $0.5 million. This represents a decrease of 56% over
average monthly EBITDAS of $1.2 million for the eight months ended
December 31, 2006.
    Net income of $2.2 million ($0.102 per share) for the twelve months ended
December 31, 2007 represents average monthly net income of $187 thousand. Net
loss of $0.7 million in 2007 Q4 is due primarily to a significant and rapid
reduction in Turn-Key Equipment project revenues related to the domestic
    Hyduke continues to remain in a very strong financial position. The
Company's current ratio is a healthy 3.39 to 1.00 and debt to equity ratio is
negligible at 0.07 to 1.00. This balance sheet strength will allow Hyduke to
not only weather the short-term storm of reduced Western Canadian activity, it
will allow Hyduke to capitalize on acquisition and growth opportunities as
they arise.


    Industry expectations for 2008 continue to reflect a reduction in overall
activity in Western Canada as measured by the number of wells drilled. The
Canadian Association of Oilwell Drilling Contractors (CAODC), in their updated
October 2007 forecast, have forecast the number of wells drilled (on a
completion basis) for 2008 to be 13,735 which represents a 28% decrease over
2007 activity. The Petroleum Services Association of Canada (PSAC), in their
January 2008 forecast, have forecast the number of wells drilled (on rig
released basis) to be 14,500 which represents a 22% decrease over 2007
    While it is expected that new rig builds for use in Western Canada during
2008 will be limited, management believes that continued success and
penetration into international markets will help to offset the domestic
Turn-Key Equipment slowdown. Hyduke continues to actively market its products
and services to international markets in the Russian Federation, India, South
America, North Africa, Middle East, Asia-Pacific and Latin America. While the
project decision making cycle is longer on international work, active quoting
continues on a significant number of international opportunities. Over the
past three years, Hyduke's international revenues have approximated 20% of
total revenue and it is expected that the volume and proportion of
international revenue will increase as additional international opportunities
are secured.
    The reduced levels of industry activity forecast for 2008 are also
anticipated to impact Hyduke's Life Cycle Management businesses such as repair
and maintenance, inspections and certification, and consumables. These
activity-based businesses comprise approximately 50% of overall Hyduke
revenue, are less reliant on capital spending and business activity levels
generally trend along with drilling and well service activity. There is a
continued focus on increasing market share through marketing Hyduke's Life
Cycle Management and Single Source Supplier platforms to customers. These
platforms benefit customers by offering continued support throughout the
useful life of their equipment and by offering a wide array of consistent,
reliable services from a single source.
    Management is prepared for challenging conditions in 2008. We are very
actively developing markets outside of Western Canada and expect to build upon
our historical successes. Operationally, we continue to focus on cost control,
realizing on vertical integration opportunities and prudent cash management
and investment. Hyduke's strong financial position will be a factor in
protecting the Company from a prolonged downturn as well as allow the Company
to capitalize on growth opportunities as they arise.
    Hyduke continues to be confident that its strategic plan considers
current and expected market conditions and that long-term strategic growth
will continue to be achieved through increased products and services and
increased penetration into international markets.

    Forward Looking Statements

    This report contains certain forward-looking statements relating, but not
limited to, 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. 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

    About Hyduke

    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

    -   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

    Hyduke is headquartered in Nisku, Alberta and has facilities in Edmonton,
Calgary, Nisku, Leduc, Red Deer and Lloydminster, Alberta.
    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.

    %SEDAR: 00008371E

For further information:

For further information: Gordon R. McCormack, President and Chief
Executive Officer, (780) 955-0355; Veronica Driesen, Chief Financial Officer,
(780) 955-0355

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