Source Energy Services Ltd. Announces Completion of the Acquisition of Preferred Sands’ Wisconsin Mine, Processing Facility and Canadian Frac Sand Assets and Related Financings, including Exercise of Underwriters Over-Allotment Option

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Calgary, Alberta – November 7, 2017 - Source Energy Services Ltd. (the “Company” or “Source”) is pleased to announce that it has completed its previously announced acquisition (the “Acquisition”) of a Northern White proppant mine in Blair, Wisconsin, two frac sand terminals located in Chetwynd, and Fort Nelson, British Columbia and exploration rights to more than 3,600 acres of land in the Peace River Valley of Alberta, from certain affiliates of Preferred Proppants, LLC, for total consideration of U.S.$80 million (approximately $100 million) cash, subject to post-closing adjustments.

Source has completed its previously announced public and private offerings of common shares (the “Offerings”), raising gross proceeds of $93.8 million (net proceeds of approximately $88.1 million) to partially finance the Acquisition. Source has concurrently increased its revolver limit under its credit facilities from $35 million to $70 million and has added The Bank of Nova Scotia as one of its lenders and drawn approximately $22.2 million thereunder (resulting in a total draw of approximately $39.0 million as of November 7, 2017). Approximately $105.9 million of the aggregate net proceeds of the Offerings and the borrowing under the credit facilities was used to fund the Acquisition and its related fees, expenses and taxes and the remaining $4.4 million is expected to be used to fund the Company’s ongoing capital investment program and for general corporate purposes.

The Offerings include 3,450,000 common shares sold on a bought deal basis to the public (the “Public Offering”) at a price of $8.35 per common share underwritten by a syndicate of underwriters including Scotiabank as sole bookrunner, and BMO Capital Markets as co-lead underwriter for gross proceeds of $28.8 million. The Public Offering includes 450,000 common shares issued pursuant to the exercise in full of the over-allotment option granted to the underwriters. The Offerings also included 7,785,000 common shares sold by way of private placement to certain accredited investors at a price of $8.35 per share for gross proceeds of $65.0 million.

The securities offered under the Offerings have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or pursuant to an available exemption from the registration requirements of the U.S. Securities Act and any applicable state securities laws. This news release does not constitute or form a part of any offer to sell or the solicitation of any offer to buy any securities in the United States or any other jurisdiction outside of Canada nor will there be any sale of securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under applicable securities laws.

Advisors

Scotiabank acted as exclusive financial advisor to Source in connection with the Acquisition. Norton Rose Fulbright Canada LLP and Norton Rose Fulbright US LLP acted as Source’s legal advisors in connection with the Acquisition. Stikeman Elliott LLP acted as Source’s legal advisor in connection with the Offerings. Blake, Cassels & Graydon LLP acted as legal advisor to Scotiabank and the other Underwriters and agents in connection with the Offerings. Ernst and Young LLP was also engaged by Source in the conduct of its due diligence activities.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the Western Canadian Sedimentary Basin. Source provides its customers with a full end-to-end solution through its Wisconsin mine, processing facilities, rail assets, strategically located terminal network and its “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute “forward-looking statements” or “forward-looking information” (collectively, “forward-looking statements”) within the meaning of applicable Canadian and United States securities laws relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: statements with respect to the use of proceeds from the Offerings and the borrowing under the credit facilities.

By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements.

Readers should refer to the factors described under the heading “Risk Factors” in Source’s final long form prospectus dated April 6, 2017, for factors that could cause actions, events or results not to be as anticipated, estimated or intended from those described in Source’s forward-looking statements. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.