Precision Drilling - President and CEO, Kevin Neveu
President and CEO, Kevin Neveu
Source: World Oil
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  • Precision Drilling Corporation (PD) has signed an asset-purchase agreement to acquire the well-servicing business and associated rentals assets of High Arctic Energy Services
  • The assets will be purchased in cash for a total of $38.2 million
  • With this, the company is adding a fleet of 80 service rigs (51 marketed and 29 inactive) to its Canadian well-servicing operation
  • The transaction provides Precision with rental assets, ancillary support equipment, inventories and spares, and six additional operating facilities in key basins
  • Precision Drilling Corp provides contract drilling and production services to Canadian oil and natural gas companies
  • Precision Drilling Corporation opened the day’s trading at $68.98 per share

Precision Drilling Corporation (PD) has signed an asset-purchase agreement to acquire the well-servicing business and associated rentals assets of High Arctic Energy Services.

The assets will be purchased in cash for a total of $38.2 million.

With this, the company is adding a fleet of 80 service rigs (51 marketed and 29 inactive) to its Canadian well-servicing operation

The transaction provides Precision Drilling with rental assets, ancillary support equipment, inventories and spares, and six additional operating facilities in key basins, four of which are owned.

The transaction is an acquisition of high-quality assets with skilled and experienced field personnel and a strong customer following.

When combined, the business will have marketed fleet of 134 service rigs and represents approximately 20 per cent of Canadian industry well service activity.

“This acquisition significantly expands our well-servicing division with high quality rigs and field personnel, strategic regional positioning, and alignment with key customers,” said Precision’s President and CEO, Kevin Neveu.

“With the expected synergies and further leveraging our scale, we believe this transaction provides accretive earnings and significant cash-generation potential supporting our debt-reduction strategy and our short-term and long-term debt-reduction targets of $75 million in 2022 and $400 million between 2022 and 2025,” he added.

Precision is acquiring the Well Servicing and Rentals divisions (excluding working capital) for $38.2 million in cash. An initial payment of $10.2 million will be made at closing, with the remaining balance due in January 2023.

Precision Drilling Corp is a key player in the North American energy industry, providing contract drilling and production services to Canadian oil and natural gas companies.

Precision Drilling Corporation opened the day’s trading at $68.98 per share.

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