CALGARY, ALBERTA--(Marketwire - Jan. 2, 2013) -
NOT FOR DISSEMINATION INTO THE UNITED STATES OF AMERICA OR DISTRIBUTION TO U.S.
Canadian Energy Services & Technology Corp. ("CES" or the "Company") (TSX:CEU) (OTCQX:CESDF) is pleased to announce that its wholly-owned indirect US subsidiary, AES Drilling Fluids, LLC ("AES"), has acquired the drilling fluids business assets (the "Acquisition") of Mega Fluids Mid-Continent, LLC ("Mega Mid-Continent"). Established in 2007, Mega Mid-Continent is an Oklahoma-based private drilling fluids company that provides drilling fluid solutions for a number of leading oil and natural gas companies with a focus on the growing Mississippi Lime oil play.
"We are acquiring a growing mid-continent drilling fluids company, with great customers, and excellent drilling fluids sales, technical and field personnel," said Tom Simons, President and CEO of CES. "A big driver for us in making this transaction was the leadership of Mega Mid-Continent, Jason Francis and Bryan Coy. We are very pleased to have them join our AES team and lead our operations in the mid-continent."
"We are excited to be joining AES and being part of CES, the leading independent drilling fluids company in North America," said Jason Francis, President of Mega Mid-Continent. "Our team is excited to integrate into AES' operations in an expedient fashion, and work together to grow the business."
Strategic Rationale of the Acquisition
Successful completion of the Acquisition is expected to strengthen CES' position as the leading independent North American drilling fluids provider.
The Acquisition expands the scale and operational capabilities of AES within the US market and places AES as a leader in the emerging Mississippi Lime oil play.
At closing Mega Mid-Continent was providing drilling fluids products and services to sixteen active drilling rigs.
AES will add Mega Mid-Continent's key field, technical and sales focused drilling fluids employees, expanding AES' capabilities to effectively reach and service customers.
Management of CES expects the Acquisition to be accretive to CES' cash flow; earnings before interest, taxes, depreciation and amortization ("EBITDA"); and net income.
About Canadian Energy Services & Technology Corp.
CES' business is focused on the design and delivery of technically advanced fluids for the North American oil and gas industry. CES' business model requires limited re-investment capital to grow. As a result, CES has been able to capitalize on the growing market demand for drilling and production fluids in North America while generating free cash flow. CES returns much of this free cash flow back to shareholders through its monthly dividend. Additional information about CES is available at www.sedar.com or at CES' website at www.CanadianEnergyServices.com.
Mega Fluids Mid-Continent, LLC
Mega Fluids Mid-Continent, LLC is headquartered in Edmond, Oklahoma, and is a leading independent full-service drilling fluids company in the US mid-continent region. Mega Mid-Continent was established in 2007 and provides drilling fluid solutions for a number of leading oil, natural gas, and unconventional natural gas developers operating primarily in Kansas, Texas and Oklahoma. Mega Mid-Continent employees and management have extensive experience and have built the business with a focus on continued profitability and revenue growth. The company has a strong customer base of over thirty different clients and proven technical capabilities in delivering high quality drilling fluid products and services.
CES uses certain performance measures that are not recognizable under International Financial Reporting Standards ("IFRS"). These performance measures include EBITDA. Management believes that this measure provides supplemental financial information that is useful in the evaluation of CES' operations. Readers should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with IFRS as an indicator of CES' performance. CES' method of calculating these measures may differ from that of other organizations and, accordingly, these may not be comparable.
This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes statements with respect to the Company's plans to integrate AES with the operations of CES and management of CES' expectation of the effect of the Acquisition on CES' cash flow, EBITDA and net income. Material assumptions and factors that could cause actual results to differ materially from such forward-looking information include the successful integration of AES employees and customers with CES. Although the Company believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
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Canadian Energy Services & Technology Corp.
President and Chief Executive Officer
Canadian Energy Services & Technology Corp.
Craig F. Nieboer, CA
Chief Financial Officer