Essential Energy Services Announces the Sale of Its Hybrid Drilling Assets
November 16 2012 - 08:00AM
Marketwired
Essential Energy Services Ltd. (TSX:ESN) ("Essential" or the
"Company") has sold its five hybrid drilling rigs (the "Rigs") and
associated support equipment and inventory to Superior Coring
Systems Inc. ("Superior") for cash proceeds of $16.75 million. The
sale closed effective November 15, 2012 (the "Closing").
One of the Rigs was recently damaged while in transit by a third
party trucking company and as a result, the proceeds will be
received in two stages. Four of the Rigs and all inventory and
support equipment were transferred at Closing for cash proceeds of
$14.75 million. All Rig employees are expected to transfer with the
assets at this time. Upon repair of the fifth Rig, it will be
delivered to Superior in exchange for the remaining proceeds of $2
million. The cost to repair the fifth Rig is expected to be fully
funded by insurance proceeds.
Essential acquired the Rigs as part of the acquisition of
Technicoil Corporation in 2011. These Rigs have been considered
non-core to Essential's focus on well servicing through coil
tubing, service rigs and downhole tools. Proceeds will be used to
reduce bank debt.
ABOUT ESSENTIAL
Essential is a growth-oriented, dividend paying corporation that
provides oilfield services to oil and gas producers in western
Canada for servicing producing wells and new drilling activity.
Essential operates the largest coil tubing well service fleet in
Canada with 47 coil tubing rigs and a fleet of 57 service rigs.
Essential also sells, rents and services downhole tools and
equipment including the Tryton Multi-Stage Fracturing System.
Further information can be found at www.essentialenergy.ca.
READER ADVISORY
This news 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", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. In particular, this news release
contains forward-looking statements including the expectation that
all Rig employees will transfer with the assets, repair of the
fifth Rig will be fully funded by insurance proceeds, completion of
the sale of the fifth Rig, receipt of the final payment for the
fifth Rig and the use of proceeds from the fifth Rig to reduce bank
debt.
Although the Company believes that the expectations and
assumptions on which such forward-looking statements and
information are made are reasonable, undue reliance should not be
placed on the forward-looking statements and information because
the Company can give no assurance that such statements and
information 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.
Accordingly, readers should not place undue reliance on the
forward-looking statements.
The forward-looking statements and information contained in this
news release are made as of the date hereof and the Company
undertakes no 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.
The TSX has neither approved nor disapproved the contents of
this news release.
Contacts: Essential Energy Services Ltd. Garnet K. Amundson
President and CEO (403) 513-7272 Essential Energy Services Ltd.
Jeff B. Newman Chief Financial Officer (403) 513-7272 Essential
Energy Services Ltd. Karen Perasalo Investor Relations (403)
513-7272service@essentialenergy.ca
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