Sikanni Services Ltd.

Sikanni Services Ltd.

January 31, 2007 09:47 ET

Sikanni Services Announces Financing

RED DEER, ALBERTA--(CCNMatthews - Jan. 31, 2007) -


Rod MacDonald, President and Chief Executive Officer of Sikanni Services Ltd. (TSX VENTURE:SKI) ("Sikanni"), is pleased to announce that Sikanni has engaged Orion Securities Inc., as lead agent, and Blackmont Capital Inc., Westwind Partners Inc., and HSBC Securities (Canada) Inc. (collectively the "Agents") to sell, on a "commercial best efforts" basis, subscription receipts of Sikanni ("Subscription Receipts") by way of short form prospectus offering (the "Offering"). Each Subscription Receipt will be exchanged, without payment of additional consideration, for one common share of Sikanni upon the closing of the acquisition of 1288070 Alberta Ltd. ("Newco") post roll-in into Newco of certain assets of the Twilight Oilfield Hauling Group (the "Acquisition") as previously announced in Sikanni's press release issued on January 29, 2007.

In addition, Sikanni has granted the Agents and over-allotment option to sell up to 15% of the Subscription Receipts sold at the Offering price, exercisable in whole or in part, at the sole discretion of the Agents, up to 30 days following closing of the Offering.

The gross proceeds from the sale of the Subscription Receipts will be held in escrow pending satisfaction of certain conditions respecting the Acquisition. Upon satisfaction of such conditions, the gross proceeds of the Offering will be released to Sikanni to finance the $19,000,000 cash portion of the Acquisition price and the balance of the proceeds will be allocated to the addition of capital assets, new business opportunities, general working capital and debt reduction.

In the event the Acquisition fails to close by 5:00 pm MDT on March 31, 2007, or the agreement governing the terms of the Acquisition is terminated at an earlier time, the escrow agent will return to the holders of Subscription Receipts their subscription price under the Offering as well as their pro-rata entitlement to interest earned thereon.

The Subscription Receipts will be sold in all provinces of Canada, other than Quebec. The Subscription Receipts may also be sold to institutional and accredited investors in certain foreign jurisdictions, pursuant to applicable securities regulations.

The number of Subscription Receipts to be offered and the pricing of the Offering is expected to occur immediately prior to filing of the final short-form prospectus and closing of the Offering is expected to occur in late February 2007.

The offering is subject to regulatory approval, including approval of the TSX Venture Exchange and the securities regulatory authorities.

About Sikanni Services Ltd.

Sikanni commenced operations as an oil and gas service company in 2005 with offices in Red Deer and Grande Cache, Alberta. Sikanni's business is strategically focused on four segments of the oil and gas service sector: (i) oilfield waste management services; (ii) wheeled tank rentals; (iii) oilfield hauling and transportation; and (iv) mud distribution services.

This press release is not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements

Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Sikanni. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues", or similar words and include but are not limited to, statements regarding the accretive effects of the acquisition and the anticipated results and expected benefits of the acquisition upon closing thereof. Sikanni believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Sikanni's continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Sikanni's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Sikanni. Any forward-looking statements are made as of the date hereof and Sikanni does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

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

Contact Information

  • Sikanni Services Ltd.
    Rod MacDonald
    President & Chief Executive Officer
    (403) 348-2172
    Sikanni Services Ltd.
    Thomas E. Lewis, CA
    Chief Financial Officer
    (403) 348-2172
    Sikanni Services Ltd.
    208, 4711 - 51st Avenue
    Red Deer, Alberta, T4N 6H8
    (403) 348-2172
    (403) 348-0451 (FAX)