Tuscany International Drilling Inc. to acquire CHEQ-IT Ltd. and create
premier publicly traded oilfield service company

CALGARY, Jan. 18 /CNW/ - Cheq-IT Ltd. ("CHEQ-IT") (TSXV: CQT) and Tuscany International Drilling Inc. ("Tuscany"), a private drilling service company with operations in South America, are pleased to announce that they have entered into a letter agreement dated January 14, 2010 (the "Letter Agreement") which provides for, subject to the entering into of a definitive agreement, the acquisition by Tuscany of all of the issued and outstanding common shares (the "CHEQ-IT Shares") of CHEQ-IT (the "Acquisition") on the basis of 0.025 of a common share of Tuscany (a "Tuscany Share") for each 1.0 CHEQ-IT Share (which represents a share price of CDN$0.04 per CHEQ-IT Share and CDN$1.64 per Tuscany Share). In connection with the Acquisition, Tuscany will apply to have its common shares listed and posted for trading on the facilities of a recognized Canadian stock exchange.

    Tuscany International Drilling Inc.

Tuscany, a privately held corporation based in Calgary, Alberta, is engaged in the business of providing contract drilling and work-over services along with drilling tool rentals to the oil and gas industry, initially in South America. The current fleet consists of 6 of the latest technology new built rigs (2 drilling and 4 heavy work-over) and related equipment along with 2 new design Heli portable small footprint rigs under construction for deployment to South America. Tuscany expects that its 2010 new build capital program will include the construction of four 750/850 HP drilling rigs, two 1,500 HP rigs, two 650 HP heavy duty work-over rigs, the purchase of one 2,000 HP heli-portable rig and the purchase of approximately US$10 million in rental assets.

As at September 30, 2009, Tuscany had not started to earn operating revenue. During the first nine months of 2009, Tuscany spent approximately $32.7 million constructing 5 new technology drilling and workover rigs and a sixth rig was in the final stages of construction. During the fourth quarter of 2009, Tuscany completed the construction of its sixth rig and all rigs were successfully deployed into South America where they began to generate operating income immediately.

2010 EBITDA based on Tuscany's existing 6 rig asset base is anticipated to be in excess of US$10 million. 2010 EBITDA based on the completion of the new build program, exclusive of any acquisitions, is anticipated to be in excess of US$45 million. Estimated working capital, after giving effect to the Acquisition, is anticipated to be approximately $6.7 million. Tuscany has a US$15.0 million convertible debenture in place of which US$10.0 million has been drawn and converted into Tuscany Shares and warrants; leaving US$5.0 million available to be drawn.

Following the completion of the Acquisition, Tuscany will have an estimated 78.6 million Common Shares outstanding and 24.4 million warrants outstanding with an average exercise price of US$1.07.

    Tuscany Management Team

The Tuscany Management Team has a solid track record of creating value in high-growth, oilfield service companies. The Tuscany Management Team is led by Walter Dawson as Chief Executive Officer, Bruce Moyes as Chief Financial Officer, Dave Stafford as President of Tuscany S.A., and Don Bertsch as Vice President, Operations.

Walter Dawson, Chief Executive Officer

Mr. Walter Dawson, founder, Chairman and Chief Executive Officer of Tuscany, has worked and been the leader of corporations in the oil service industry for over 40 years. Mr. Dawson was the founder of Saxon Energy Services Inc. ("Saxon"), an international oilfield services company which was a publicly traded company from 2001. Mr. Dawson was Chairman of the board of directors of Saxon, prior to its acquisition in 2008 by Schlumberger Oilfield Holdings Limited and private equity investor, First Reserve, in a transaction valued at approximately $700 million. In 1993 Mr. Dawson founded what became known as Enserco Energy Services Company Inc., formerly Bonus Resource Services Corp. Enserco entered the well servicing businesses through the acquisition of over 26 independent Canadian service rig operators. Prior to his time at Saxon and Enserco, Mr. Dawson served for 19 years as President, Chief Executive Officer and a director of Computalog Ltd., which is now an operating division of Weatherford. Computalog's primary businesses were oil and gas logging, perforating, directional drilling and fishing tools. While at Computalog, Mr. Dawson instituted a technology center, located in Fort Worth, Texas, to develop electronics designed for downhole wellbore logging tools. . Mr. Dawson is the sole owner and President of Perfco Investments, Ltd., an investment company.

Bruce Moyes, Chief Financial Officer

Mr. Bruce Moyes has over 25 years of accounting and financial experience in a variety of entities, most recently as Vice President, Finance and Treasurer of Ensign Energy Services Inc., a land-based international oilfield services contractor whose shares are listed on the Toronto Stock Exchange. Prior thereto, Mr. Moyes was a Manager of Financial Planning and Analysis at Canadian Pacific Limited from 1996 to 1999. Prior thereto, Mr. Moyes was a Senior Manager with PricewaterhouseCoopers LLP, where he worked from 1985 to 1996.

Dave Stafford, President (Tuscany S.A.)

Mr. Dave Stafford has over 30 years of direct experience in oil and gas drilling, including 20 years of combined experience in Colombia. Mr. Stafford was the Vice President, Operations of Saxon from 2005 to 2008. Prior thereto, Mr. Stafford was the Senior Vice President, Operations of Unit Drilling Company from 1998 to 2005. Prior thereto, Mr. Stafford was the General Manager of Colombia Operations at Parker Drilling Company from 1976 to 1998, a land-based and offshore drilling services company whose shares are listed on the New York Stock Exchange.

Don Bertsch, Vice President, Operations

Mr. Don Bertsch has over 30 years of experience in international drilling and work-over services, 15 years of which are in South and Central America. Of note, Mr. Bertsch was the Regional Manager, Ecuador and Colombia of Saxon from 2003 to 2009. Prior thereto, Mr. Bertsch was the General Manager, Pool International Ecuador, Nabors Drilling and Welltech in Argentina.

    Tuscany Board of Directors

Upon the completion of the Acquisition, the Board of Directors of Tuscany shall consist of Walter Dawson, Jeffrey Scott, Donald Wright, Reginald Greenslade, Terry McIver and John R. Rooney.

Jeffrey Scott, Director

Mr. Scott is founder and Chairman of the Board of Directors of GranTierra Energy Inc. since January 2005. Since 2001, Mr. Scott has served as President of Postell Energy Co. Ltd., a 30 year old private oil and gas producing company. He has been in the oil industry for over 26 years and has extensive oil and gas management and operations experience. Beginning as a production manager of Postell Energy Co. Ltd. in 1985, he advanced to President in 2001. Mr. Scott has served as a senior officer and/or director of various publicly traded companies and is currently a Director of Essential Energy Services Trust and is Chairman of Nucoal Energy Corp . Mr. Scott was a director Saxon from 2004 to 2008.

Donald Wright, Director

Mr. Donald Wright is currently the President and Chief Executive Officer of The Winnington Capital Group Inc., an investment counsel and portfolio management company. Mr. Wright's career has spanned over 30 years in the investment industry. He has held a number of leadership positions, including President of Merrill Lynch Canada, Executive Vice-President, director and member of the executive committee of Burns Fry Ltd., Chairman and Chief Executive Officer of TD Securities Inc. and Deputy Chairman of TD Bank Financial Group. Mr. Wright is the Chairman of the board of directors of VIA Rail Canada Inc., and Richards Packaging Inc., the Chairman of the board of trustees of Richards Packaging Income Fund, and is a member of the board of directors of Black Bull Resources Inc., Condor Petroleum Inc., DHX Media Ltd., MaRS Innovation, Public Mobile Inc. and Tuscany International Drilling Inc.

Reginald Greenslade, Director

Mr. Reginald Greenslade is a professional engineer and is currently an independent businessman. He is currently a director of Spartan Exploration Ltd. ("Spartan"), a junior oil and gas exploration and production company focussed on light and medium oil opportunities in Saskatchewan and Alberta. Spartan is in the process of completing a business combination with Aztek Energy Ltd. which will result in Spartan being listed on a recognized Canadian stock exchange. He is the former Chairman, President and CEO of Big Horn Resources Ltd. and Enterra Energy Corp. and Chairman of Enterra Energy Trust until March, 2006 and was the President and CEO of JED Oil Inc. from November, 2003 to January, 2005.

Terry McIver, Director

Mr. Terry McIver is the President of Loadcraft Industries Ltd. an internationally known manufacturing company located in Brady and Brownwood, Texas which specializes in mobile drilling rig and trailer manufacturing.

John R. Rooney, Director

Mr. John R. Rooney is the President and CEO of Northern Blizzard Resources Inc., a private oil & gas company. Prior thereto Mr. Rooney served as CEO of TUSK Energy Corporation since the acquisition of Zenas Energy Inc. in January 2007 until Tusk was sold to a large U.S. pension fund in April of 2009. Prior thereto Mr. Rooney was President & CEO of Zenas Energy Inc. from August 2005 to December 2006, President & CEO of Blizzard Energy Inc. from December 2002 to July 2005, as Vice President & CFO and then President & CEO of Equatorial Energy Inc. from May 1999 to July 2002. Mr. Rooney is a Chartered Accountant and a Chartered Business Valuator. Mr. Rooney is also a Director of Western Energy Services (a public oil services company), Gastar Exploration Ltd. and Caza Oil & Gas Inc. (both public oil & gas companies) and of Export Development Canada (a crown corporation).

    CHEQ-IT Acquisition

It is anticipated that the acquisition of CHEQ-IT will be completed by way of a Plan of Arrangement (the "Arrangement") pursuant to which each CHEQ-IT Share will be exchanged for 0.025 of a Tuscany Share (which represents a share price of CDN$0.04 per CHEQ-IT Share and CDN$1.64 per Tuscany Share). Tuscany intends to make application to list the Tuscany Shares on the facilities of a recognized Canadian stock exchange in conjunction with the completion of the Arrangement. In connection with the completion of the Arrangement, the CHEQ-IT Shares shall be delisted.

Completion of the Acquisition is subject to the execution of a definitive agreement in respect of the Arrangement on or before January 29, 2010 (the "Arrangement Agreement"), receipt of the approval of 66 2/3% of the CHEQ-IT shareholders voting in person or by proxy at a meeting of the CHEQ-IT shareholders to be held to consider the Arrangement, as well as customary court, regulatory and exchange approvals. The information circular to be mailed to CHEQ-IT shareholders will contain detailed information in respect of the Arrangement, Tuscany and CHEQ-IT. There can be no assurance that the Acquisition will be completed as proposed or at all.

It is a condition to the execution of the Arrangement Agreement that all of the directors and officers of CHEQ-IT enter into support agreements with Tuscany to vote their CHEQ-IT Shares in favour of the Arrangement.

The Arrangement Agreement will prohibit CHEQ-IT from soliciting or initiating any discussion regarding any other business combination or sale of material assets, contains provisions for Tuscany to match competing, unsolicited proposals and, subject to certain conditions, provides for a reciprocal termination fee of $50,000 payable by either CHEQ-IT or Tuscany in certain circumstances.

    Strategic Rationale and Corporate Strategy

The Tuscany Management Team believes that current market conditions in the service sector provide an optimal point of entry for a new oilfield service company with operations initially focused in the South American marketplace. Drilling commitments from new and ongoing license rounds combined with increased heavy oil development and Colombia announcing their intention to double production by 2015 has resulted in an increase in demand for oilfield services in South America. The continuing development of the South American oil and natural gas industry has resulted in oil and gas companies demanding new technology drilling equipment to complete their drilling programs and has resulted in an overwhelmingly positive acceptance of the 6 rigs Tuscany has recently introduced into the South American market. Tuscany plans to continue building new assets for deployment as customers commit. The business model the Company established in 2009 has proved itself as 2010 has witnessed a tremendous increase in demand for drilling and work-over rigs. It is anticipated that these factors combined with increased access to capital as a public entity will provide the Tuscany shareholder with the opportunity for increased returns.

Following completion of the Arrangement, Tuscany expects to initially focus on the rapidly expanding South American oil and gas services industry, growing through building the newest technology drilling rigs coupled with a targeted acquisition and consolidation strategy where attractive acquisition multiples can be achieved. Tuscany's extensive asset base, in a well capitalized corporate structure will facilitate growth through cash flow from operations and strategic acquisitions.

For investors, Tuscany, upon completion of the Arrangement, represents an opportunity to participate in a uniquely positioned, well-capitalized oilfield service company with a proven management team committed to aggressive, cost-effective growth.

    Financial Advisors

Jennings Capital Inc. is acting as financial advisor to Tuscany with respect to the Acquisition. Purdy and Partners Inc. is acting as financial advisor to CHEQ-IT with respect to the Acquisition.

    About CHEQ-IT Ltd.

CHEQ-IT presently develops, sells and supports cheque writing and electronic fund transfer systems. Operations to date have primarily been focused in southern Alberta, within the oil and gas industry. The CHEQ-IT Shares trade on the TSX Venture Exchange under the symbol CQT.


Statements in this joint press release contain forward-looking information including, without limitation, components of cash flow and earnings, timing and completion of the Acquisition, the listing of the Tuscany Shares on a recognized Canadian stock exchange and ongoing corporate strategy and benefits of the Acquisition. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Tuscany and CHEQ-IT. These risks include, but are not limited to: the risks associated with the oil and gas industry, commodity prices and exchange rate changes, regulatory changes, successful exploitation and integration of technology, customer acceptance of technology, changes in drilling activity and general global economic, political and business conditions. Industry related risks could include, but are not limited to; operational risks, delays or changes in plans, health and safety risks and the uncertainty of estimates and projections of costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Neither Tuscany or CHEQ-IT undertakes any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Certain of the information contained in this joint press release assumes that Tuscany has completed the Acquisition on the anticipated basis and times set forth herein. The CHEQ-IT Acquisition is subject to the receipt of the approval of the shareholders of CHEQ-IT, the approval of the Court of Queen's Bench for the province of Alberta as well as all other necessary regulatory approvals. The anticipated listing of the Tuscany Shares on a recognized Canadian stock exchange is subject to the conditional approval of that stock exchange and Tuscany satisfying the listing requirements and all other requirements of such exchange.

Readers are further cautioned that the preparation of financial statements in accordance with Canadian generally accepted accounting principles ("GAAP") requires management to make certain judgements and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.

Cash flow from operations are not recognized measures under GAAP. Management of Tuscany and CHEQ-IT believe that, in addition to net income, cash flow from operations is a useful supplemental measure as it demonstrates an ability to generate the cash necessary to repay debt or fund future growth through capital investment. Readers are cautioned, however, that these measures should not be construed as an alternative to net income determined in accordance with GAAP as an indication of Tuscany's or CHEQ-IT's performance. Tuscany's and CHEQ-IT's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to measures used by other companies. For these purposes, Tuscany and CHEQ-IT define cash flow from operations as cash provided by operations before changes in non-cash operating working capital.

The information concerning Tuscany contained in this press release has been provided by Management of Tuscany. The information concerning CHEQ-IT contained in this press release has been provided by Management of CHEQ-IT.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


For further information: For further information: Walter Dawson, CEO, Tuscany International Drilling Inc., 100, 522-11th Avenue S.W., Calgary, Alberta; Phone (403) 265-8258, Fax (403) 265-8793; W. Glenn Hamilton, Chief Financial Officer, CHEQ-IT Ltd., 410, 816-7th Avenue S.W., Calgary, Alberta; Phone (403) 241-2607, Fax (403) 239-4613

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