CALGARY, June 5 /CNW/ - (TSX - MTL.UN) - The Mullen Group Income Fund
("Mullen" or the "Fund") announced today the entering into of an agreement
with Essential Energy Services Trust ("Essential") to acquire all of the
assets and business of Essential's Transport Division, which includes its
fluid hauling and oilfield transport business units for a purchase price of
$135.0 million. The fluid hauling business units operate as "Cascade Services"
in northern Alberta and northeastern British Columbia and as "Jacar Energy
Services" in southern Alberta. The oilfield transport business units operate
as "Circle "D" Transport & Rentals" in southern Alberta, as "Prime Oilfield
Hauling" in the Grande Prairie, Alberta region, as "Polege Oilfield Hauling"
in northern Alberta and northeastern British Columbia and as "Leachman
Oilfield Trucking" in central/southern Alberta and Saskatchewan.
"Acquiring businesses leveraged to fluid hauling has been a strategic
focus of Mullen for several years. In particular, we believe there are
tremendous opportunities associated with the hauling and management of fluid
in connection with resource plays in areas such as British Columbia and
Saskatchewan. The acquisition of Essential's fluid hauling business units
greatly expands our fluid hauling capabilities in these important regions and
will be a strategic fit with several of our existing business units. The
addition of Essential's oilfield transportation business units expands our rig
hauling capability into southern Alberta, a region in which we do not
currently have a presence. The addition of these assets will also provide us
with an opportunity to leverage our existing infrastructure and work on
operational efficiencies among our various rig hauling and general oilfield
hauling businesses," stated Mr. Stephen H. Lockwood, President and Co-CEO.
Cascade Services operates out of Fort Nelson, Fort St. John and Dawson
Creek, British Columbia and Grande Prairie, Spirit River, Slave Lake, Swan
Hills and Wabasca, Alberta with a fleet of over 106 units including vacuum
pressure trucks, hydrovacs, steamer trucks, hot oilers, tank trucks,
combination units and sour sealed tankers. Jacar operates out of Taber,
Cayley, Pincher Creek, Medicine Hat and Brooks, Alberta and Richmound,
Saskatchewan with a fleet of approximately 91 units including pressure trucks,
hot oilers, vacuum trucks, tank trailers, sealed tank trucks, fresh water
trucks, frac trailer acid units, steam trucks and vac and steam combo units.
Circle "D" Transport & Rentals operates out of Brooks, Medicine Hat, Taber and
Strathmore, Alberta and Swift Current, Saskatchewan with a fleet of over 80
power units, 185 trailers and a rental fleet of blowback, separator and 400
barrel tanks. Prime Oilfield Hauling operates from its head office in Grande
Prairie, Alberta with a fleet of approximately 20 power units, 33 trailers and
an inventory of rental equipment such as flare tanks, floc tanks, catwalks,
pipe racks and rig mats. Polege Oilfield Hauling operates from its facility
located in Edmonton, Alberta with a fleet of approximately 22 tractors, 50
trailers and specializes in oilfield pipe hauling and storage. Leachman
Oilfield Trucking operates from its facility in Provost, Alberta and
specializes in the business of tubular hauling and storage utilizing a fleet
of approximately 21 tractors and 51 trailers.
Mullen is also very pleased to announce that Ken Wagner, the Chief
Operating Officer of Essential, has agreed to accept a position with Mullen as
President of the Cascade Services and Jacar Energy Services business units.
Mr. Wagner's experience and knowledge, especially in relation to the hauling
of fluid, will be very valuable in realizing upon operational efficiencies and
in the further expansion of Mullen's capabilities in fluid hauling.
"We are pleased to add these six business lines to our growing
organization. Each of them has an exceptional reputation for providing
outstanding service to their customers. We look forward to working with the
existing management teams on enhancing their service offerings to their
customers and realizing on the potential synergies that will result from this
acquisition. These businesses have quality assets with quality management
teams and personnel and, as such, we anticipate a very smooth integration,"
said Stephen H. Lockwood.
It is anticipated that these business units will generate revenue of
approximately $115.0 million during 2008 and produce operating margins
consistent with other comparable business units in the Mullen Group. The
transaction is expected to close by early July, 2008, subject to negotiation,
execution and delivery of the final purchase and sale agreement, completion of
due diligence, regulatory approvals and other conditions customary for a
transaction of this nature. Mullen will fund the cash purchase price from its
existing cash reserves and its existing bank facility.
This press release may contain forward-looking statements that are
subject to risk factors associated with the oil and gas business and the
overall economy. The Fund believes that the expectations reflected in this
press release are reasonable, but results may be affected by a variety of
variables. The Fund relies on litigation protection for "forward-looking"
Mullen is an open-ended income fund that owns a network of independently
operated businesses. Today the Mullen Group is recognized as the largest
provider of specialized transportation and related services to the oil and
natural gas industry in western Canada and as one of the leading suppliers of
trucking and logistics services in Canada - two sectors of the economy in
which the Fund has strong business relationships and industry leadership.
Administration of the Fund is delegated to Mullen Group Inc. which, in
addition to managing the Fund, provides management and financial expertise,
technology and systems support to its independent businesses.
Mullen is a publicly traded income trust listed on the Toronto Stock
Exchange under the symbol "MTL.UN". Additional information is available on our
website at www.mullen-group.com.
For further information:
For further information: Mr. Murray K. Mullen - Chairman and Chief
Executive Officer; Mr. Stephen H. Lockwood - President and Co-Chief Executive
Officer, P.O. Box 87, 1 Maple Leaf Road, Aldersyde, Alberta, Canada, T0L 0A0,
Tel: (403) 652-8888, Fax: (403) 601-8301