GASFRAC Energy Services Inc.
TSX VENTURE : GFS

GASFRAC Energy Services Inc.

November 30, 2010 15:11 ET

GASFRAC Energy Services Inc. Announces $150 Million 2011 Capital Expansion Program and $95 Million Dollar Bought Deal Offering of Common Shares

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2010) -

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GASFRAC Energy Services Inc. ("GASFRAC" or the "Company") (TSX VENTURE:GFS) is pleased to announce its 2011 capital expenditure program of $150 million dollars. The 2011 capital program will see GASFRAC expand its hydraulic horsepower ("HHP") by 45% from 105,000 HHP in Q1 2011 to 152,500 HHP in Q4 2011. In addition, the build will not only focus on HHP, but will include a 100% increase in proppant and fluid handling capabilities of the Company. The increase in proppant and fluid handling equipment will allow the Company to strive toward a capital balance of three proppant and fluid handling systems per set of HHP. This will enhance the utilization of the HHP and allow for larger volumes of LPG to be pumped in a single fracturing stage. As part of this capital expansion, GASFRAC will construct a fracturing simulator which will be used as a training tool for new employees as the Company staffs the additional equipment. It is anticipated that the assets from this capital build program will be delivered in four sets with the first assets being deployed and on-stream in late August 2011 with the remaining assets being fully deployed and on-stream by the end of November 2011. 

GASFRAC will be financing the capital program through a combination of cash, debt and cash proceeds from the sale of common shares. GASFRAC has entered into an agreement with a syndicate of underwriters led by Raymond James Ltd. (collectively the "Underwriters") pursuant to which the Underwriters have agreed to purchase on a "bought deal" basis 11,243,000 common shares ("Common Shares") of GASFRAC at a price of $8.45 per Common Share (the "Offering Price") for aggregate gross proceeds of $95,003,350 (the "Offering").

GASFRAC has also granted the Underwriters an option (the "Over-Allotment Option") to purchase up to an additional 1,686,450 Common Shares at the Offering Price to cover over-allotments, if any, for additional gross proceeds of up to $ 14,250,502. The Over-Allotment Option is exercisable in whole or in part at the sole discretion of the Underwriters for a period of 30 days following the closing of the Offering.

Pursuant to the Offering, the Common Shares will be offered in all provinces of Canada, except Quebec, by way of a short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration requirements pursuant to Rule 144A and/or Regulation D of the United States Securities Act of 1933. Closing of the Offering is expected to occur on or about December 22, 2010 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking information and statements that are based on GASFRAC's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In this news release, such forward-looking information and statements can be identified by terminology such as "will", "to be", "expected", "anticipated" and similar expressions.

In particular, this news release contains forward-looking statements and information relating to the planned use of proceeds, GASFRAC's 2011 capital expenditure program and timing for the Offering. These forward-looking statements and information are being made by GASFRAC based on certain assumptions that GASFRAC has made in respect thereof as at the date of this document, including: that favourable growth parameters continue to exist in respect of current and future growth plans (including the ability to finance such plans on favourable terms); and that GASFRAC's businesses will continue to achieve sustainable financial results. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties, including, but not limited to: non-performance of agreements in accordance with their terms; the seasonal nature of the North American oil and gas industry; the impact of competitive entities and pricing; reliance on suppliers for components; reliance on intellectual property rights; the strength and operations of the oil and natural gas production industry and related commodity prices; the continuation or completion of third-party projects; regulatory environment and inability to obtain required regulatory approvals; tax laws and treatment; fluctuations in operating results; the ability of GASFRAC to raise sufficient capital to complete future projects and satisfy future commitments; construction delays; labour and material shortages; and certain other risks detailed from time to time in GASFRAC's public disclosure documents including, among other things, those detailed under the heading "Narrative Description of the Business of GASFRAC" in the joint information circular and proxy statement relating to the amalgamation of GASFRAC with Kierland Capital Corporation dated July 7, 2010 which can be found at www.sedar.com.

Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. Such forward-looking statements are expressly qualified by the above statements. GASFRAC does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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