Sikanni Services Ltd.
TSX VENTURE : SKI

Sikanni Services Ltd.

April 02, 2007 10:36 ET

Sikanni Services Ltd. Completes $40,000,000 Short-Form Prospectus Offering and Acquisition of Twilight Oilfield Hauling Group

RED DEER, ALBERTA--(CCNMatthews - April 2, 2007) -

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES.

SIKANNI SERVICES LTD. ("Sikanni" or the "Corporation") (TSX VENTURE:SKI) is pleased to announce that it has closed its short-form prospectus offering (the "Offering"), raising gross proceeds of $40,000,000 thereunder and has subsequently closed the acquisition of all of the issued and outstanding shares of 1288070 Alberta Ltd. ("Newco") (the "Acquisition").

As a result of the Corporation's Acquisition of Newco, the Corporation has acquired the assets of four private companies, including: (i) Twilight Oilfield Hauling Ltd.; (ii) MMC Contracting Ltd.; (iii) Tower General Trucking Ltd.; and (iv) 721757 Alberta Ltd. (collectively, the "Twilight Oilfield Hauling Group"). The Twilight Oilfield Hauling Group has operated in the oilfield services industry since 1988, specializing in the transportation of oil and gas drilling rigs in Western Canada and has a strong reputation with a diversified customer base, including major Canadian exploration and development companies. The purchase price, after giving effect to post closing adjustments, was $38 million (Cdn.) and was satisfied by way of $20,000,000 in cash and $18,000,000 through the issuance of 14,400,000 common shares of Sikanni at a deemed price per share of $1.25. The principals of Newco received 900,000 stock options at an exercise price of $0.60 per common share and expiring five years from the date of grant. Gilbert Francois, co-owner and President of Twilight Oilfield Hauling Group, has been appointed to Sikanni's board of directors and will remain as President of Newco.

Rod MacDonald, President and CEO of Sikanni, commented that, "the completion of the Acquisition is an important milestone in Sikanni's aggressive growth and acquisition strategy to become an industry leader in Western Canada. We are very excited to be adding a well managed industry leader that is highly complementary to our existing business."

Pursuant to the Offering, 66,666,667 subscription receipts ("Subscription Receipts") were issued at a price of $0.60 per Subscription Receipt. Each Subscription Receipt entitles the holder thereof to receive, without payment of additional consideration or further action, (i) one common share of the Corporation (a "Common Share") and (ii) one-half of one Common Share purchase warrant (a "Warrant"). Each full Warrant entitles the holder to acquire one Common Share at an exercise price of $0.80 per Common Share for a period of 18 months from closing of the Offering. Orion Securities Inc. acted as lead agent of a syndicate of agents in connection with the Offering, which syndicate included Blackmont Capital Inc., Westwind Partners Inc., and HSBC Securities (Canada) Inc.

Sikanni commenced operations as an oil and gas service company in 2005 with offices in Red Deer and Grande Cache. 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 an offering of securities for sale in the United States. The Subscription Receipts, Common Shares, and Warrants have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or exemption from the registration requirements.

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
    Email: rmacdonald@sikanni.com
    or
    Sikanni Services Ltd.
    Thomas E. Lewis, CA
    Chief Financial Officer
    (403) 348-2172
    Email: tlewis@sikanni.com
    or
    Sikanni Services Ltd.
    208, 4711 - 51st Avenue
    Red Deer, Alberta, T4N 6H8
    (403) 348-2172
    (403) 348-0451 (FAX)
    Website: www.sikanni.com