Mr. James Horvath reports

LONESTAR WEST ANNOUNCES Q1 2017 FINANCIAL RESULTS

Lonestar West Inc. has released the financial results for the three-month period ended March 31, 2017.

The results for the quarter ended March 31, 2017, continue to reflect the impact of the significant pricing pressure from the heightened competition for non-energy-related projects. There was an increase in Canadian utilization, which did not translate into an increase in revenue as a result of the low rates. The continuing delay in contract negotiations with a major account in the Unites States also had a direct impact on the company over all. The focus of the company will be to continue to reduce operating costs and improve margins, which have suffered as a result of the low rates and higher costs.

Key points for the three months ended March 31, 2017, include:

• Revenues were $8,307,033 for the quarter ended March 31, 2017, compared with $11,919,783 for the prior-year comparable quarter.
• Gross margin (1) was 7.9 per cent compared with 19.3 per cent for the prior-year comparable quarter.
• Normalized EBITDAC (earnings before interest, taxes, depreciation, amortization and stock-based compensation excluding foreign exchange gains or losses, which are primarily related to the U.S.-dollar activities of the company) (2) was ($296,736) compared with $891,813 for the prior-year comparable quarter.
• Normalized EBITDAC (3) per basic share was (one cent) from three cents for the prior-year comparable quarter.
• Loss before taxes was $2,123,873 as compared with a loss before taxes of $1,053,137 for the prior-year comparable quarter.
• Loss for the period was $2,124,472 as compared with a loss of $2,271,552 for the prior-year comparable quarter.

"The results for the first quarter of 2017 did not reflect the efforts we made to improve our profit margin. The cost-cutting was completed by mid-March but did not have sufficient time to realize the benefits, and the continued decline of the revenues offset the impact of the cuts we have made. As a result, we have taken additional steps to continue making cuts throughout the organization," commented James Horvath, president and chief executive officer of Lonestar. "We view the potential acquisition by Clean Harbors Inc. in a positive light and believe it is the correct strategy for all stakeholders."

The company is continuing to intensify its focus on cost control while maintaining superior service to its customer base. In addition, the company is continually assessing the location of its fleet and redeploys assets to areas less impacted by the energy markets.

About Lonestar West Inc.

Based in Sylvan Lake, Alta., Lonestar West operates a fleet of 137 hydrovac, vacuum and auxiliary units throughout Western Canada, Ontario, California and the southeastern United States. It is focused on profitably increasing its HVAC services to become a major competitor in the North American market.

Notes:

(1) Gross margin is calculated as gross profit as a percentage of revenues.

(2) This news release contains the term normalized EBITDAC as presented and does not have any standardized meaning prescribed by international financial reporting standards, and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses normalized EBITDAC to analyze the operating performance of the business. Normalized EBITDAC as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. It is defined as earnings before interest, taxes, depreciation, amortization and stock-based compensation excluding foreign exchange gains or losses, which are primarily related to the U.S.-dollar activities of the company and can vary significantly depending on exchange rate fluctuations, which are beyond the control of the company.

(3) Normalized EBITDAC per share is calculated as normalized EBITDAC divided by the weighted-average shares outstanding for the period.

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