Flint Announces Agreement to Acquire Carson Energy Services Ltd.

(TSX: FES)

CALGARY, Sept. 1, 2011 /CNW/ - Flint Energy Services Ltd. ("Flint" or the "Company") announced today that it has entered into a definitive agreement to acquire (the "Acquisition") all of the issued and outstanding shares of Carson Energy Services Ltd. ("Carson"), a privately held energy services company based in Saskatchewan.  The purchase price to be paid at closing is comprised of $112 million in cash and 2,121,212 Flint common shares, plus up to an additional $30 million earn-out spread over the next three years, subject to closing adjustments.  Payment of the earn-out portion of the purchase price is dependent upon Carson meeting EBITDA targets of $40 million per year.

Completion of the Acquisition is subject to the satisfaction of certain conditions including receipt of all necessary regulatory approvals. The Acquisition is expected to close on or before October 1, 2011.

Carson, established in 1974 and based in Lampman, Saskatchewan, is one of Saskatchewan's largest private companies engaged in energy services with over 900 employees, and operations in 14 locations covering the major energy plays in Saskatchewan, Manitoba and eastern Alberta.  Carson offers pipeline construction, fabrication, civil and facility construction, oilfield maintenance, pipeline integrity, horizontal directional drilling, trucking and tubular management, environmental and safety sales and services.  Carson's well respected safety performance, outstanding employees, strategic services and operations, and strong customer service will provide a platform for Flint to expand its energy services reach in Saskatchewan and Manitoba.

As Flint's Saskatchewan operations are based in three locations offering a limited suite of services, there will be little overlap or duplication in operations. Saskatchewan has seen significant growth in its oil and gas sector activity, making it an attractive area for expansion, particularly in heavy oil production near Lloydminster and in the Bakken oil play in southeast Saskatchewan. The Bakken represents one of the most significant oil focused resource plays in North America and continues to experience double digit growth in activity. Constant advances in drilling and completion technologies are drawing an increasing number of producers to this resource play, and based on the prevailing outlook for the price of crude oil, industry expects sustained growth in activity for the foreseeable future. Flint already has a presence in the U.S. part of the Bakken with locations in Minot, Williston and Stanley, North Dakota. The addition of Carson locations positions Flint as the largest established and diversified service provider across this resource basin.

In addition to the oil and gas industry, Flint's experience with large and complex projects in the oil sands, combined with Carson's local customer relationships, presents a new opportunity for Flint to expand its major projects construction and maintenance capabilities in the largest potash production region in the world.

Flint anticipates that the Acquisition will add over $220 million in annual revenues and $40 million of EBITDA going forward. There are numerous incremental opportunities for both Flint and Carson to offer their existing services across the expanded operational footprint. Flint's fluid haul, large construction projects, rig moving, and maintenance services are some examples of services that can grow across the Carson operations, while Carson's horizontal directional drilling and fabricating capacity can be offered through Flint's existing operations.

Ron Carson, President of Carson said, "I am pleased that we have found the right strategic partner for Carson to accelerate its growth plans and provide for smooth succession in the future. The combination of Flint and Carson will allow our employees to continue to succeed and offer expanding services to all of our customers in the energy market. We see great synergy with Flint's systems and processes. I look forward to working closely with our clients as we increase our ability to deliver on their growing needs. This is truly an exciting opportunity for both companies."

W. J. (Bill) Lingard, President and CEO of Flint said, "I am very excited to welcome the employees of Carson into the Flint family. Flint sees this combination with Carson as a strategic opportunity for growth, tied to the increasing oil drilling and production activities we are seeing in Saskatchewan. Flint and Carson share similar cultures of safety, business ethics, and support for its people, communities and customers.  Our combined strengths and resources will make us the largest energy services provider in Saskatchewan, providing a strong service platform for our customers in this region, increasing the service lines available to the producers of southeast Saskatchewan and Manitoba. While this deal is very accretive to Flint's earnings on a standalone basis, we also see a lot of potential to use the strengths of each of our organizations - Carson's local expertise and complementary services, and Flint's wider project and service offerings, to grow our combined businesses in Alberta, Saskatchewan and Manitoba."

The results of operations of the majority of the acquired businesses will be reported in Flint's existing Canadian Production Services segment, and the trucking and transportation related services will be reported in Flint's Oilfield Services segment. Flint intends to fund this transaction from its existing cash position, revolving credit facility and by issuance of common shares, subject to the approval of the Toronto Stock Exchange.

A conference call with management to discuss the Acquisition has been scheduled for Thursday September 1, 2011 at 1:00 PM ET (11:00 AM MT).  Please visit our website at www.flintenergy.com for further information on how to listen to the conference call.

Flint Energy Services Ltd. is a market leader providing an expanding range of integrated products and services for the oil and gas industry including: production services; field construction; oilfield transportation; process equipment design and manufacturing; and tubular management services.  With more than 10,000 employees, Flint provides this unique breadth of products and services through over 60 strategic locations in the oil and gas producing areas of western North America, from Inuvik in the Northwest Territories to Mission, Texas on the Mexican border.  Flint is a preferred provider of infrastructure construction management, module fabrication, maintenance services for upgrading, and production facilities in Alberta's oil sands sector. www.flintenergy.com

NON-GAAP FINANCIAL MEASURES
In this news release, reference is made to the EBITDA of Carson, which is a non-GAAP measure. The EBITDA of Carson is defined to mean [earnings before interest, taxation, depreciation and amortization] and has been calculated in a manner that is consistent with the manner in which Flint calculates EBITDA.  Flint regularly provides information concerning its EBITDA for various periods, because EBITDA is commonly referred to by lenders and other interested parties in evaluating Flint's financial position.  Accordingly, the anticipated EBITDA of Carson is a financial measure that has been included in this new release together with the anticipated revenues of Carson to enable investors to assess, at a high-level, the financial effect of the Acquisition.  Investors are cautioned, however, that EBITDA should not be construed as an alternative to net earnings determined in accordance with GAAP as an indicator of financial performance.  Moreover, the method of calculating EBITDA may differ from other organizations and, accordingly, the calculations of EBITDA contained in this news release may not be comparable to other organizations.

FORWARD LOOKING STATEMENTS
Certain statements in this news release are "forward-looking statements".  All statements other than statements of historical fact contained in this news release may be forward-looking statements.  Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting" "intend", "could", "might", "should", "believe" and similar expressions. In particular, this news release contains forward-looking statements pertaining to the payment of the purchase price and adjustments thereto, the payment of the earn-out portion of the purchase price, the satisfaction of certain closing conditions, the anticipated timing of closing the Acquisition, the expected outcome of the Acquisition including, without limitation, the impact of the Acquisition on annual revenues and EBITDA.  These forward-looking statements are based upon Flint's current expectations of the management of Flint regarding future events and future performance of Flint and Carson as well as certain assumptions concerning the current status of the due diligence and the process to satisfy the conditions to close, financial performance of Carson and synergies associated with the Acquisition.  Flint believes that the expectations reflected in such forward-looking statements, and the assumptions on which such forward-looking statements are based, are reasonable; however, no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements. These factors include, but are not limited to, the failure to satisfy the closing conditions in a timely fashion or at all, the inability to integrate the business, assets and employees of Carson into Flint, fluctuations in oil and gas prices, fluctuations in the level of oil and gas industry capital expenditures and expenditures on production and remedial work and other factors that affect demand for the Company's services, industry competition, uncertainties as to the Company's ability to implement its business strategy effectively in Canada and the United States, political and economic conditions, the Company's ability to attract and retain key personnel, and other risks and uncertainties described under the heading "Risk Factors" and elsewhere in the Company's Annual Information Form for the year ended December 31, 2010 and other documents filed with Canadian provincial securities authorities and are available to the public at www.sedar.com.  The forward-looking statements are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements are made as of the date of this news release and Flint assumes no obligation to update or revise them to reflect new events or circumstances, except as expressly required by applicable securities law.  Further information regarding risks and uncertainties relating to Flint and its securities can be found in the disclosure documents filed by Flint with the securities regulatory authorities, available at www.sedar.com.

SOURCE Flint Energy Services Ltd.

For further information:

Guy Cocquyt, Director of Investor Relations Telephone: (403) 218-7195, gcocquyt@flintenergy.com, Website: www.flintenergy.com

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Flint Energy Services Ltd.

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