New West Energy Services Inc. Announces Agreement to Purchase Oilfield Services Company
September 18, 2013 (Source: Marketwired) — New West Energy Services Inc. (“New West” or the “Corporation”) (TSX VENTURE:NWE) is pleased to announce that it has entered into a share purchase agreement with the shareholders (the “Vendors”) of 1770245 Alberta Ltd. (“1770245”), Tippin D Oilfield Services Ltd. (“Tippin D”) and 40 Creek Oilfield Services Ltd. (“40 Creek”) providing for the purchase by the Corporation of all of the issued and outstanding common shares of 1770245 for an aggregate purchase price of $1.8 million, to be comprised of $1.3 million in cash, the issuance of 3,000,000 common shares in the capital of the Corporation at a deemed price of $0.10 per share and a post-closing payment of up to $200,000 which is payable as an earn out upon achieving certain performance thresholds over a twelve month period post close (the “Transaction”). Closing of the Transaction is expected to occur on or about September 30, 2013 and is subject to certain conditions including, but not limited to, receiving the approval of the TSX Venture Exchange.
Summary of Acquisition
The Vendors, Tippin D and 40 Creek, all arm’s length parties, operate private businesses in the oilfield services industry predominantly in the Peace region of Alberta, providing combination, hydrovac and boiler truck services to the completions and production sectors of the oil and gas industry. Substantially all of the assets of Tippin D and 40 Creek will be transferred to 1770245 prior to the closing of the Transaction.
“We have been looking for an opportunity to expand our service into the combination/hydrovac sector which will allow us to diversify from drilling related services into the production side of the oil and gas business”, said Gerry Kerkhoff, President and CEO of New West. “With this acquisition, we expect to gain the knowledge and expertise required to expand this new service into our other service centres as well as operate our existing services from this base in Beaverlodge, Alberta, opening a new market with access to major oil and gas plays in Northwest Alberta and Northeast British Columbia.”
The new service will operate under the name Bearstone Vacuum Services which is a division of the wholly owned subsidiary BearStone Environmental Solutions Inc. Tippin D and 40 Creek have fixed assets of approximately $930,000 and, for the 12 months ended June 30, 2013, revenue of approximately $2.1 million and earnings before tax of approximately $721,000. Daniel Huys, the Founder and President of Tippin D, 40 Creek and 1770245, will serve as an Area Manager for Bearstone Vacuum Services.
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About New West Energy Services Inc.
The Corporation operates in the oilfield service industry in Canada through two wholly owned subsidiaries – BearStone Environmental Solutions Inc. and Porterco Oilfield Services Inc. BearStone provides environmental services to the upstream oil and gas industry and also operates a fleet of specialized vacuum and water trucks. Porterco operates a fleet of trucks and trailers for hauling oil contaminated drill cuttings as well as providing equipment rental and custom fabrication services.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Except for the statements of historical fact contained herein, certain information presented herein constitutes “forward-looking statements”. More particularly, this press release contains statements concerning the purchase of the shares of 1770245, obtaining TSXV approval, the transfer of substantially all of the assets of Tippin D and 40 Creek to 1770245, the timing of closing and the anticipated benefits of the Transaction. The forward-looking statements contained in this press release are solely opinions and forecasts which are uncertain and subject to risks. Forward-looking statements include but are not limited to uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties. Accordingly, readers are cautioned that the assumption used in the preparation of the forward-looking statements, although considered reasonable at the time of preparation may prove to be imprecise and, as such undue reliance should not be placed on forward-looking statements.
The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, the Corporation undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.
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