Cordy Oilfield Services Inc.
TSX VENTURE : CKK

Cordy Oilfield Services Inc.

June 05, 2006 11:30 ET

Cordy Announces Details on Two New Acquisitions

CALGARY, ALBERTA--(CCNMatthews - June 5, 2006) - Cordy Oilfield Services Inc. (the Corporation) (TSX VENTURE:CKK) is pleased to announce that it has entered into letters of intent to acquire Battle River Oilfield Construction Ltd., and Hartwell Oilfield Services (522532 Alberta Ltd.). These are two of the acquisitions first identified in the Corporation's news release of May 31, 2006.

Battle River Oilfield Construction Ltd.

Battle River, established in 1984, provides construction services to oil and natural gas producers in the northwestern area of Alberta. Battle River operates out of Manning, Alberta with 50 pieces of heavy-duty machinery and employs as many as 175 people. Bill May, Keith Hutchinson, Dave Willans and Jared May are the senior managers and majority owners of Battle River. All four will continue in their respective management roles with Battle River following the completion of its acquisition by the Corporation.

The purchase price for Battle River is $28,250,000 made up of $12,712,500 in cash, and $15,537,500 by way of the issuance of 2,959,524 common shares of the Corporation at the deemed price of $5.25 per share.

Hartwell Oilfield Services

Hartwell Oilfield Services, established in 1994, provides oilfield vacuum truck services to oil and natural gas producers in central Alberta. Hartwell operates out of Stettler, Alberta with 25 water and vacuum truck units and employs approximately 30 people. Hartwell is owned and managed by Bruce and Doug Reinhart who will continue to manage the Hartwell operation following the completion of its acquisition by the Corporation.

The purchase price for Hartwell is $9,627,112 made up of $4,470,987 in cash, and 5,156,125 by way of issuance of 982,119 common shares of the Corporation at the deemed price of $5.25 per share.

Incentive stock options to acquire up to 1,075,000 common shares of the Corporation at the exercise price of $5.25 per share will be granted in conjunction with the completion of these acquisitions to key employees of Battle River and Hartwell.

The Corporation's President and CEO Sid Dutchak indicates that the announced acqusitions are significant to the Corporation in two respects. "We expect Battle River and Hartwell to contribute in excess of $10,000,000 to Cordy's annualized EBITDA, while adding further values through synergies with Cordy's other operations."

The acquisition of Battle River and Hartwell are arm's length transactions, and, subject to the satisfaction of conditions precedent, including the acceptance of the TSX Venture Exchange, are anticipated to be completed on or before July 31, 2006 subsequent to the completion of due dilligence on behalf of the parties.

Option Grants

The Corporation further advises that incentive stock options will be granted to certain employees, officers and directors to acquire 590,000 common shares of the Corporation at the exercise price of $5.25 per share subject to the approval of the TSX Venture Exchange. New directors Robert Baldwin and Robert J. MacLean shall each be granted 100,000 options. The Corporation's President and CEO Sid Dutchak and CFO Robert Ashauer shall be granted 150,000 and 50,000 options respectively. The Corporation's Corporate Secretary Dan Kenney shall be granted 40,000 options. The balance of 150,000 options will be granted to other employees of the Corporation.

Cordy Oilfield Services Inc. owns businesses in the oilfield services and construction sectors and is implementing a strategy of growth through acquisition.

Forward-Looking Information

Certain information in this news release includes forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements are based on the Corporation's beliefs and assumptions based on information available at the time the assumptions were made. Forward-looking statements relate to, among other things, anticipated financial performance, business prospects, strategies, new services, market forces and commitments. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed.

The TSX Venture Exchange does not accept responsibility for the accuracy or adequacy of this release.

Contact Information

  • Cordy Oilfield Services Inc.
    Sid Dutchak
    President & CEO
    (403) 266-2067
    (866) 854-8075 (FAX)
    or
    For investor relations information:
    Cordy Oilfield Services Inc.
    David Orr
    Vice President - Corporate Development
    Email: dorr@cordy.ca
    Website: www.cordy.ca