I guess not!
Savanna Energy acquires well servicing and rental businessesadvertisement
CALGARY, Feb. 19 /CNW/ - Savanna Energy Services Corp. ("Savanna") (TSX: SVY) is pleased to announce the acquisition of the assets of a privately-held well servicing company, and the shares of a related well servicing and rental business for aggregate proceeds of $67.8 Million, consisting of $50.8 Million in cash and $17 million of Savanna common shares. The Savanna common shares issued pursuant to the transaction will be placed in escrow and released over a 3-year period.
The combined acquisitions include 20 service rigs plus associated field locations, boilers and support equipment, as well as 1 additional service rig under construction. The acquisition increases Savanna's current well servicing fleet by 83% to 44 rigs.
The operational focus for the purchased equipment is primarily in east central Alberta and west central Saskatchewan, areas in which Savanna does not currently operate. The majority of the fleet of service rigs was built in the last 4 years, and the purchase includes a manufacturing, maintenance and repair facility and personnel that will be used to support the entire go-forward Savanna well-servicing fleet.
All of the principles have agreed to remain with Savanna in their present roles, and all have executed independent three year employment and non-competition agreements.
Based on normalized 2006 estimated results, the acquisition is valued at less than 4 times earnings before interest, income taxes, depreciation and amortization ("EBITDA").
Post this transaction, Savanna's well servicing fleet will consist of 44 rigs, with 8 rigs scheduled for manufacture and delivery in 2007.
This transaction reinforces Savanna's growing position in the well servicing market in a production-oriented area of the basin, and adds significant additional scale to the core well servicing business to complement Savanna's strong existing drilling presence.
Savanna Energy Services Corp. is a leading North American contract drilling and oilfield services company providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies for the North American market and industry-leading aboriginal relationships. Post this transaction Savanna will operate 87 drilling rigs, 44 well servicing rigs and 8 coil service units in Canada and the United States.
This Report contains forward looking statements which reflect management's expectations regarding the Company's future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as "believe", "expect" and similar expressions have been used to identify these forward looking statements. The statements reflect management's current beliefs and are based on information currently available to management. Forward looking statements involve significant risk, uncertainties and assumptions. A number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward looking statements. Although the forward looking statements contained in this Report are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date hereof and the Company assumes no obligation to update or revise them to reflect new events or circumstances.
© 2007 The Canadian Press - Stockgroup
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