Leader Energy Services Ltd.
TSX VENTURE : LEA

Leader Energy Services Ltd.

February 18, 2011 10:56 ET

Leader Energy Services Announces Closing of $15 Million Financing

CALGARY, ALBERTA--(Marketwire - Feb. 18, 2011) - Leader Energy Services Ltd. ("Leader" or the "Company") (TSX VENTURE:LEA) is pleased to announce that it has completed its previously announced three-year secured debt facility agreement in the principal amount of $15,000,000. The facility bears interest at an annual rate of 12% compounded and payable quarterly, and is repayable at any time without penalty subject to the approval of its senior lender. Under the terms of the financing, the lender was issued 4 million share purchase warrants exercisable at $0.65 for three years. Leader will use existing working capital and proceeds from the new facility to refinance its existing convertible debt.

As previously announced, Leader reached an agreement with holders of its 10% convertible subordinated debentures to repurchase 95.4% of the total amount outstanding. Leader issued $15,000,000 of debentures on February 28, 2007, of which $13,160,000 was outstanding as of January 25, 2011. The debentures were convertible at $0.40 per share and would have matured on March 31, 2012.

Leader will pay $12,560,000 of debenture principal plus $1,400,000 of deferred interest at 110% of face value, for a total of $15,356,000. Additionally the Company will pay interest owing per the debenture agreement up until February 18, 2011 totalling approximately $755,000. As of February 18, 2011, a total of $2,140,000 of debentures was converted to common shares of the Company.

Whitehorn Merchant Capital Inc. provided financial advisory services to Leader with regards to the new debt facility and in addition to cash compensation, received 250,000 share purchase warrants exercisable at $0.60 for two years.

Leader continues to experience robust demand for its services. Revenue for the year ended December 31, 2010 will approximate $26 million. In addition, revenue for the current year to date is higher than previously expected. In 2011, the Company is planning a modest capital expenditure program including new coiled tubing, nitrogen, and fluid pumping equipment. Leader anticipates releasing fiscal 2010 results during the third week of April 2011.

Further information can be found under the Company's listing at www.sedar.com and on the Company's website at www.leaderenergy.com. The number of common shares issued and outstanding at the date hereof is 18,698,000.

Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "estimate", "believe", "likely", "will", or estimates of business activity, and similar expressions and statements relating to matters that are not historical facts, are forward looking statements. Such statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Leader to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors include commodity prices, demand for oil and gas related products and service, competition, political and economic conditions, demand and acceptance of new products and ways of doing business, changes in laws and regulations to which Leader is subject, and the ability to attract and retain key personnel.

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

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