Savanna Reiterates Support for Acquisition of Savanna by Western Energy Services Corp. and Rejection of the Inferior Total Offer

FOR: SAVANNA ENERGY SERVICES CORP.
TSX SYMBOL: SVY

Date issue: March 17, 2017
Time in: 7:30 AM e

Attention:

CALGARY, ALBERTA--(Marketwired - March 17, 2017) - Savanna Energy Services Corp. ("Savanna") (TSX:SVY) today reiterates the unanimous support of the special committee (the "Special Committee") of the board of directors of Savanna (the "Savanna Board") and the Savanna Board of the acquisition of all of the issued and outstanding common shares of Savanna (the "Savanna Shares") by Western Energy Services Corp. ("Western") on the basis of 0.85 of a common share of Western (the "Western Shares") and $0.21 in cash per Savanna Share (the "Western Offer").

UNANIMOUS RECOMMENDATION OF THE SUPERIOR WESTERN OFFER BY THE SAVANNA BOARD

Based upon verbal fairness opinions from Peters & Co. Limited and Cormark Securities Inc. and after consulting with its financial and legal advisors, the Special Committee and the Savanna Board have unanimously determined that the Western Offer is fair to the Savanna shareholders and is in the best interests of Savanna and its shareholders. The Savanna Board unanimously recommends that Savanna shareholders vote in favour of the Western Offer.

Shareholders are encouraged to review Savanna's news releases dated March 9, 2017, March 13, 2017 and March 15, 2017, for a summary of the benefits of the Western Offer to Savanna shareholders.

REJECTION OF THE INFERIOR TOTAL OFFER

The Savanna Board, on the recommendation of the Special Committee, has unanimously determined that Savanna shareholders should continue to reject the offer from Total Energy Services Inc. ("Total") to purchase all of the Savanna Shares on the basis of 0.13 common shares of Total and $0.20 in cash for each Savanna Share (the "Total Offer"). Savanna shareholders are urged not to tender their Savanna Shares to the Total Offer. If you have already tendered your Savanna Shares to the Total Offer, you can withdraw your Savanna Shares by contacting your broker or D.F. King, North American Toll Free at 1-800-622-1678 or via email at inquiries@dfking.com.

Total Soft Support Agreements

Pursuant to the lock-up agreements, the locked-up shareholders are required to support the Total Offer for a period of seven days following Western's increased offer announced March 15, 2017. If Total has not publicly announced its intention to amend the terms of its offer to match or exceed the consideration to be received by Savanna shareholders under the Western Offer and the locked-up shareholders determine the Western Offer is more favourable to the Total Offer, the lock-ups can still be terminated.

Significant Risks to Waiver of Minimum Condition

On March 13, 2017, Total filed a notice of variation (the "Notice of Variation") pursuant to which it waived the minimum tender condition of the Total Offer such that the Total Offer will require only the tender of more than 50% of the outstanding Savanna Shares (excluding those owned by Total or any person acting jointly or in concert with Total). The waiver of the minimum condition introduces significant risks to Savanna's stability and ongoing operations, and to shareholder value and to the resulting position of Savanna shareholders. It also casts significant doubt on the ability of Total to immediately deliver what it purports to be able to contribute to Savanna.

If Total acquires 50.1% of the outstanding Savanna Shares, and notwithstanding that Total will not have acquired 100% of the Savanna Shares, Savanna will be required to make an offer to acquire all of its outstanding senior notes at 101% of the principal amount thereof, plus the accrued and unpaid interest, as a result of the change of control occurring from the acquisition of 50.1% of the Savanna Shares pursuant to the Total Offer. In addition, the acquisition by Total will constitute a change of control under Savanna's credit facilities and second lien credit agreement with Alberta Investment Management Corporation ("AIMCo"), such that if consent to the change of control is not obtained, the full amount owing to the lenders thereunder will become due and payable with Savanna having to refinance the same in a circumstance where Savanna could be a public company with shareholders other than Total at the time and not be wholly owned by Total. At that time, Savanna may be in a severely precarious position, as will be the shareholders of Total and Savanna. As Total has highlighted in the Notice of Variation, this creates significant risks to both Total and Savanna shareholders.

Potential for Significant Debt Refinancing Challenges

Total has not disclosed to Savanna shareholders how it intends to refinance the Savanna debt that may become due and payable upon a change of control. The Savanna Board considered available alternatives when entering into the AIMCo financing and believes it will be extremely difficult for Savanna to refinance the credit facilities and the AIMCo second lien amount and to finance the purchase of the senior notes. Further, such financing may be significantly more difficult if Savanna is a non-wholly owned subsidiary of Total at the time.

Total confirmed in its notice of change and notice of variation dated March 1, 2017 that it had not entered into any definitive commitments with respect to financing to replace the AIMCo financing that may become due and payable or to finance the acquisition of Savanna's senior notes and noted that there can be no assurance that such financing will be available on terms acceptable to Total. In addition, if Savanna is still a public company not wholly-owned by Total, such refinancing will be required to be completed by Savanna.

Western Balance Sheet Well Positioned

As industry participants are aware, 2016 was the most challenging year in recent decades for oilfield services companies. Dan Halyk, Total's chief executive officer, acknowledged this fact in his remarks during Total's 2016 fourth quarter conference call: "Total Energy's results for 2016 reflect the most challenging industry conditions faced by the company in our 20-year history."

In characterizing the indebtedness of Western based on 2016 financial information, Total is misleading shareholders of Savanna and Western by ignoring the fact that capital markets are forward looking and that security prices are established based on the expectations that prospective investors have for the future. The fact that Western's senior unsecured notes due 2019 are currently trading at 99% of par value is a clear indication that prospective investors are not anchoring on the 2016 financial information that Total is suggesting should be the basis for decision making.

Customers and Former Savanna Personnel

Savanna has had feedback regarding both the Total Offer and the Western Offer from former directors and officers who have indicated to Savanna that they are supportive of consolidation within the industry and are also supportive of the transaction that brings the shareholders the highest price and potential for creation of long-term value. The Western Offer clearly brings Savanna shareholders the highest price and potential for creation of long-term value. As indicated by Total, of course our employees are concerned about the future of their company. They have been unnecessarily put through an extended period of uncertainty because of Total's hostile and opportunistic behavior and are looking forward to having closure and certainty in the process. We thank and appreciate all of our employees who have remained focused on performing their duties in a safe and professional manner during this time of uncertainty.

Notwithstanding Total's insinuations to the contrary, Savanna has not heard any concerns from its customers regarding the Western Offer, including with respect to the financial stability of a combined Savanna and Western.

Savanna is continuing to review all of its legal avenues with respect to the Total Offer.

FINANCIAL ADVISORS

Peters & Co. Limited is acting as financial advisor to Savanna in respect of the Western Offer and has provided the Savanna Board with its verbal opinion that, subject to certain customary assumptions, qualifications and limitations, the consideration to be received by holders of Savanna Shares pursuant to the terms of the Western Offer is fair, from a financial point of view, to the holders of Savanna Shares.

Cormark Securities Inc. has provided the Savanna Board with its verbal opinion that, subject to certain customary assumptions, qualifications and limitations, the consideration to be received by holders of Savanna Shares pursuant to the terms of the Western Offer is fair, from a financial point of view, to the holders of Savanna Shares.

About Savanna

Savanna is a leading contract drilling and oilfield services company operating in North America and Australia providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading Aboriginal relationships.

Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to the proposed acquisition of Savanna by Western pursuant to a plan of arrangement and the risks resulting from Total acquiring more than 50% of the Savanna Shares. These forward-looking statements and information are based on certain key expectations and assumptions made by Savanna. Completion of the Western Offer is subject to a number of conditions which are typical for transactions of this nature. Assumptions have been made with respect to the satisfaction of all conditions precedent under the arrangement agreement with Western. Although Savanna believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Savanna cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to satisfy any of the conditions to completion of the Western offer, the emergence of a superior proposal in respect of either party or the failure to obtain approval of the Savanna shareholders or Western shareholders may result in the termination of the arrangement agreement.

Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other risks that could affect completion of the Western Offer will be set forth in an information circular of Savanna to be mailed in connection with the Western Offer, which will be available on SEDAR at www.sedar.com. Other risk factors that could affect Savanna's operations or financial results are included in Savanna's annual information form and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Savanna does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

- END RELEASE - 17/03/2017

For further information:
Savanna Energy Services Corp.
Chris Strong
President and Chief Executive Officer
(403) 267-6728
OR
Savanna Energy Services Corp.
Dwayne LaMontagne
Executive Vice President and Chief Financial Officer
(403) 214-5959
OR
Media contact:
Trevor Zeck
Longview Communications Inc.
(604) 694-6037
OR
Shareholder inquiries:
D.F. King Canada
(Toll Free): 1-800-622-1678

COMPANY:
FOR: SAVANNA ENERGY SERVICES CORP.
TSX SYMBOL: SVY

INDUSTRY: Energy and Utilities - Equipment, Energy and Utilities -
Oil and Gas
RELEASE ID: 20170317CC0009

Press Release from Marketwired 1-866-736-3779

All press releases are written by the client and have NO affiliation with the news copy written by The Canadian Press. Any questions that arise due to the content or information provided in the press release should be directed to the company/organization issuing the release, not to The Canadian Press.

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