EVEREADY INCOME FUND
TSX : EIS.UN

EVEREADY INCOME FUND

May 31, 2005 08:30 ET

Eveready Announces Letter of Intent to Acquire Oilfield Services Company

EDMONTON, ALBERTA--(CCNMatthews - May 31, 2005) - Eveready Income Fund ("Eveready") (TSX:EIS.UN) announced today that it has entered into a letter of intent (the "Letter of Intent") to acquire 100% of the issued and outstanding shares of Allstar Oilfield Services Ltd. and related assets ("Allstar"). Allstar is based in Lloydminster, Alberta, and provides a broad range of oilfield services to the energy sector including vacuum truck, pressure testing, flush-by, and hydro excavation services. This will be an arms length transaction.

The Letter of Intent contemplates that the final purchase price will be based on the earnings of Allstar over the next 12 months subject to a minimum purchase price of $5,000,000 plus the agreed upon value of certain assets. The purchase price will be payable by way of a combination of: (i) the issuance of Units of Eveready at a deemed value of $4.30 per Unit, such price per Unit being equal to 90% of the ten day weighted average trading price of the Units of Eveready prior to the signing of the Letter of Intent; (ii) the assumption of certain liabilities related to Allstar; and (iii) the balance payable in cash, if any. The minimum purchase price will be paid on closing with the balance of the purchase price, if any, payable by October 30, 2006.

Rod Marlin, Eveready's President and Chief Executive Officer comments "We are very pleased with the potential acquisition of Allstar. The proposed acquisition will be an exceptional fit allowing Eveready to expand into the Lloydminster area."

Completion of the proposed transaction is subject to a number of conditions including, but not limited to, the completion of satisfactory due diligence by Eveready as well as approval of the board of trustees of Eveready. Completion of the transaction is also subject to the receipt of any required regulatory approvals including, but not limited to, the approval of the Toronto Stock Exchange. Assuming that all of the conditions are satisfied, it is anticipated that the effective date of the acquisition will be July 1, 2005.

Eveready Income Fund is one of Canada's leading providers of industrial cleaning, oilfield, and environmental services to the energy, resource, and manufacturing sectors. The Units of Eveready trade on the Toronto Stock Exchange under the trading symbol "EIS.UN".

This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Eveready to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, fluctuations in the market for oil and gas and related products and services, political and economic conditions, the demand for services provided by Eveready, industry competition and Eveready's ability to attract and retain both customers and key personnel.

Contact Information