Precision Drilling Announces Acquisition of CWC Energy Services

September 07, 2023 06:00 Eastern Time | Origin: Precision Drilling Corporation

CALGARY, Alberta, September 7th, 2023 (GLOBE NEWSWIRE) -- This press statement includes "prospective information and declarations" as defined by relevant financial regulations. For a complete disclosure of the prospective information and declarations and the associated risks, please refer to the "Warning Regarding Prospective Information and Declarations" section later in this press statement.

Precision Drilling Corporation ("Precision") (TSX:PD; NYSE:PDS) is excited to share that it has made an agreement to purchase all of the available common shares of CWC Energy Services Corp. ("CWC") (TSXV:CWC). The total cost of this acquisition is estimated to be around $141 million, made up of 947,909 Precision shares, valued at approximately $88 million based on the closing market price on September 1, 2023, as well as $14 million in cash. Additionally, Precision will also take on CWC's existing debt.

Through this deal, Precision is expanding its fleet by acquiring 62 service rigs, 7 drilling rigs in Canada, and 11 drilling rigs in the United States, which includes 7 advanced AC triple rigs. Currently, a total of 3 Canadian drilling rigs and 7 US drilling rigs are already in operation, serving customers. Other notable aspects of this transaction are:

Kevin Neveu, the President and CEO of Precision, expressed that this purchase aligns with our strategy of delivering exceptional results and value. By acquiring top-notch equipment and skilled staff, we will be able to enhance our services in both Canada and the United States. We anticipate that the transaction will bring about positive financial outcomes, generating substantial cash flow to benefit our shareholders and aid in reducing our debt. Moreover, we are thrilled to have the CWC employees join our team at Precision.

Precision is strongly dedicated to decreasing its debt levels by $500 million from 2022 to 2025 and reaching a consistent Net Debt-to-Adjusted EBITDA ratio of less than 1.0 times by the end of 2025. As for the year 2023, Precision is on schedule to reduce its debt by $150 million.

Information about the specific terms of the transaction can be found in the Arrangement Agreement. This document will be submitted and accessible for review on SEDAR, under both Precision's and CWC's profiles at www.sedar.com.

The deal is anticipated to be finalized by the end of 2023's fourth quarter, pending the approval of CWC shareholders, Toronto Stock Exchange ("TSX"), court and regulatory entities, Competition Bureau authorization, and the fulfillment of typical closing conditions. Precision has retained Evercore as their financial consultant and Osler, Hoskin & Harcourt LLP as their legal consultant.

About Precision Precision is a top-notch company that offers secure and eco-friendly services of exceptional quality to the energy sector. We give our clients the opportunity to utilize our wide range of advanced drilling rigs known as Super Series. Our unparalleled digital technology, known as Alpha™, harnesses cutting-edge automation software and analytics to produce reliable and consistent outcomes for our energy customers. Moreover, Precision also provides well service rigs, camps, and rental equipment, all supported by a comprehensive range of technical assistance and highly trained professionals.

Precision is based in Calgary, Alberta, Canada and is recorded on the Toronto Stock Exchange under the trade symbol "PD" and on the New York Stock Exchange under the trade symbol "PDS".

Disclaimer concerning future-oriented data and statements

Some statements in this news release, including statements using words like "could," "should," "can," "anticipate," "estimate," "intend," "plan," "expect," "believe," "will," "may," "continue," "project," "potential," and similar expressions, as well as statements about topics that are not historical facts, are considered "forward-looking information" under Canadian securities laws and "forward-looking statements" under the United States Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information and statements").

Specifically, predictions and declarations that are focused on in this section encompass, but are not restricted to, the subsequent:

The information and statements about the future mentioned here are formed by Precision using specific assumptions and analysis. These are based on our knowledge of past patterns, present circumstances, anticipated future progress, and other factors that we consider suitable given the situation. These factors consist of, but are not limited to:

It is not wise to fully trust and depend on future predictions and information. The actual outcome may not match our expectations and projections due to various known and unknown risks and uncertainties. These factors can significantly impact the results and may deviate from what we had originally anticipated. Some of the potential risks and uncertainties include, but are not restricted to:

Please note that the above list of risk factors is not exhaustive. Additional details about these and other factors that could impact our business, operations, or financial results can be found in reports that have been filed with the appropriate securities regulatory authorities. These reports include Precision's Annual Information Form for the year ended December 31, 2022, which can be accessed on Precision's SEDAR profile at www.sedar.com or under Precision's EDGAR profile at www.sec.gov. The forward-looking information and statements provided in this press release are accurate as of the date mentioned and Precision has no obligation to update or revise any forward-looking statements or information, except as required by law.

For additional details, please get in touch with:

Contact Information: Lavonne Zdunich, Certified Public Accountant, CA, Director of Investor Relations. Phone: 403.716.4500.

Precision Drilling Corporation can be reached at their headquarters located at 800, 525 – 8th Avenue S.W. in Calgary, Alberta, Canada with the postal code T2P 1G1. For more information about the company, you can visit their official website at www.precisiondrilling.com.

The securities that are expected to be issued as part of the Arrangement 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. It is anticipated that any securities issued as part of the Arrangement will be issued without the need for registration, relying on exemptions provided by Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This announcement should not be considered as an offer to sell or a solicitation to buy any securities.