Seaway Energy Services Inc.

Seaway Energy Services Inc.

December 10, 2007 10:47 ET

Seaway Energy Services Inc. Announces Acquisiton and Convertible Debenture Offering

CALGARY, ALBERTA --(Marketwire - Dec. 10, 2007) - SEAWAY ENERGY SERVICES INC., ("Seaway" or the "Company") (TSX VENTURE:SEW) listed on the TSX Venture Exchange Inc. under the trading symbol "SEW" is pleased to announce that it has entered into a letter of intent for the purchase of an Alberta-based private oilfield consulting company. Under the terms of the letter of intent, Seaway intends to purchase the company, which has current annual net earnings (EBITDA) of approximately $188,000 based on annual consulting revenues of approximately $1,100,000, for an aggregate purchase price of $500,000 (the "Acquisition"). The purchase price is proposed to be paid as follows: (a) $250,000 in cash at closing; (b) $100,000 by the issuance at closing of an aggregate 1,000,000 common shares of Seaway ("Common Shares") at an ascribed price of $0.10 per share; (c) $100,000 in cash payable on the first anniversary of the closing; and (d) the remaining balance of $50,000 in cash 18 months from the closing. The Acquisition is arm's length and is subject to regulatory and TSX Venture Exchange approval. The Common Shares to be issued in connection with the proposed acquisition will have a hold period of four months and one day from issuance.

Concurrent with the Acquisition, the Company is pleased to announce a non-brokered private placement of 12% unsecured convertible debentures (the "Debentures") in the aggregate principal amount of up to $500,000, subject to regulatory and TSX Venture Exchange approval. The Debentures bear a coupon rate of 12% per annum, with interest payable quarterly, mature two years from their date of issuance and will be convertible at any time after their issuance into Common Shares at the holder's option at $0.15 per Common Share. The Company will also have the option to prepay Debentures at anytime after the date of issue upon 30 days notice and payment of an additional one month's interest.

It is anticipated that the Debentures and Common Shares issuable under the Debentures will be subject to a hold period of four months and one day from issuance. Seaway may also pay a finder commission of up to 6% of the proceeds of the Debentures to eligible persons. The net proceeds from the private placement are expected to be used for the purposes of the Acquisition and for working capital purposes.

The Company is also pleased to announce that it has filed a Notice of Change of Auditor appointing Buchanan Barry LLP as auditors of the Corporation, following the resignation of MPG Chartered Accountants, the previous auditor of the Company. There were no disagreements, unresolved issues, or consultations with the previous auditors.

Seaway is a Calgary-based corporation providing environmental consulting services to the oil and gas industry. These services include managing the construction of oil and gas leases and access roads, cleanup of leases and roads following drilling activity and reclamation of leases following drilling and production.

Seaway is listed on the TSX Venture Exchange under the symbol "SEW".

Certain statements contained in this document are "forward-looking statements". The projections, estimates and beliefs contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results or events to differ materially from those anticipated in any forward-looking statements. Seaway believes the expectations reflected in those forward-looking statements are reasonable; however Seaway cannot provide any assurance that these expectations will prove to be correct.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Seaway Energy Services Inc.
    Jerry Budziak
    President and CEO
    (403) 235-4486
    (403) 266-1181 (FAX)
    Seaway Energy Services Inc.
    Suite 504
    200 LaCaille Place SW
    Calgary, Alberta, Canada, T2P 5E2