CALGARY, Sept. 5 /CNW/ - Savanna Energy Services Corp. ("Savanna") (TSX:
SVY) is pleased to announce the signing of a definitive agreement to acquire
the assets of a privately-held oilfield services rental company for aggregate
cash proceeds of $20.0 million, subject to adjustments at closing. Closing is
anticipated to occur no later than September 12, 2008.
The acquisition includes a substantial inventory of drilling and well
servicing-related rental assets and support equipment, as well as a machining
and pipe-inspection facility. The acquisition is intended to provide a
platform for the development of a full-service rental division within Savanna
for both Canada and the United States.
The operational focus for the purchased equipment is currently primarily
in south central Alberta and southwest Saskatchewan.
All of the key management principles have agreed to remain with Savanna
in their present roles, and all will execute independent employment and
non-competition agreements. In addition, $2.5 million of the proceeds will be
utilized by key management to acquire shares of Savanna in the open market
over the next 90 days.
Savanna believes that the acquisition price reflects replacement value of
the assets acquired, and that the transaction will be immediately accretive to
both cashflow and earnings per share.
This transaction complements and augments Savanna's growing position in
the drilling and well servicing market in Canada, and it is Savanna's
intention to expand its Canadian presence and introduce US exposure in this
business segment as soon as practicable.
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, and committed capital expenditures
previously announced, Savanna will operate 108 drilling rigs, 64 well
servicing rigs, 8 coil service units and a broad drilling and workover rental
fleet 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
For further information:
For further information: Ken Mullen, President and Chief Executive
Officer; Dwayne LaMontagne, Vice-President, Finance, Telephone: (403)