News Releases

Strad Announces Sale of Production Services Division

Jan 13, 2012
Strad is pleased to announce that it has completed the sale of its Production Services Division.

Strad Energy Services Ltd.  (TSX: “SDY”) (“Strad”) is pleased to announce that it has completed the sale of its Production Services Division. The sale was comprised of two separate transactions with the successful purchasers led by employees of the Company. The combined consideration received on the sale of the Division was $17.4 million which was comprised of $13.1 million in cash, $3.0 million in Promissory Notes, and $1.3 million in the assumption of long term debt. For the nine months ended September 30, the Division contributed $3.2 million in EBITDA, excluding any allocation of corporate overhead. With the sale, the Company expects a significant improvement in reported margins.

Mr. Andy Pernal, President of Strad commented, “We are very pleased with the sale of the Production Services Division, and are excited to focus all of our attention on the continued dramatic growth of our Drilling Services Division.  With the sale, Strad’s employee count will be reduced by 270 people and operations will be streamlined. Demand for Strad drilling solutions in both Canada and the U.S. continues to be very robust, particularly from large oil and gas producers. We are also pleased that the sale was made to employees of the Company who have worked hard over the past years to build a very solid operation, particularly given the Division’s exposure to natural gas commodity prices. We wish them continued success.”

The proceeds of the sale of the Production Services Division will be used to support the Company’s $72 million capital expenditure program previously announced for 2012.

The sale of the Production Services Division will result in a non-cash accounting charge of approximately $25 million. 

Raymond James Ltd. acted as financial advisor to Strad in respect to the sale.

For more information, please contact

Strad Energy Services Ltd.
Henry van der Sloot
Chief Executive Officer
(403) 249-7336
Fax: (403) 232-6901
email: hvandersloot@stradenergy.com

 

Strad Energy Services Ltd.
Andy Pernal
President
(403) 775-9202
Fax: (403) 232-6901

email: apernal@stradenergy.com