Cordy Oilfield Services Inc.

Cordy Oilfield Services Inc.

May 31, 2006 19:36 ET

Cordy Completes Sphere Drilling Fluids Ltd. Purchase and Announces Three New Proposed Acquistions

CALGARY, ALBERTA--(CCNMatthews - May 31, 2006) - CORDY OILFIELD SERVICES INC. (TSX VENTURE:CKK) (the "Corporation") is pleased to announce that it has today completed the purchase (the "Transaction") of all of the issued and outstanding securities of Sphere Drilling Fluids Ltd. ("Sphere").

The Corporation, directly and indirectly acquired all of the issued and outstanding securities of Sphere in consideration of $4.5 million paid in cash and by the issue of 1,046,512 common shares ("Cordy Shares") issued at the deemed price of $4.30 per share. Concurrently with the completion of the acquisition of Sphere, the Corporation issued to employees and consultants of Sphere a total of 500,000 options to acquire Cordy Shares with an exercise price of $4.30 per share.

Upon completion of the Transaction, there are approximately 73 million Cordy Shares issued and outstanding.

Since 1988, Sphere and its wholly-owned subsidiary have been in the business of selling, manufacturing, and providing drilling solutions to the mining, construction, geotechnical, seismic, water well, tar sands and heavy oil industries domestically and internationally.

Cordy President and CEO Sid Dutchak describes Sphere as an "industry leader" and an important addition to the Cordy group of companies. "Sphere is an excellent well managed( enterprize enterprise) with a history of positive financial performance. We look forward to working with Sphere management in the future."

The Transaction remains subject to final acceptance by the TSX Venture Exchange.

New Acquisitions

Cordy is also pleased to announce that it has reached understandings for the acquisition of three Alberta-based companies (collectively, the "Target Companies") that operate in the oilfield services industry.

It is anticipated that the purchase price for the Target Companies will be an aggregate of approximately $42 million paid both in cash and by up to 4,488,584 common shares of the Corporation issued at the deemed price of $5.25 per share.. In addition, incentive stock options to acquire up to 1,150,000 common shares of the Corporation, subject to the approval of the TSX Venture Exchange, are proposed to be granted to the key employees and consultants of these companies and the Corporation concurrently with the completion of the acquisitions. The Corporation hereby reserves $5.25 per share as the deemed price of the common shares issuable as partial consideration for the Target Companies and the exercise price for the options.

The entering into of definitive agreements providing for the acquisition of each Target Company is anticipated to occur on or before June 30, 2006. The acquisitions will(be) subject to the satisfaction of a number of conditions precedent, including but not limited to, the completion of due diligence on behalf of all parties, the final approval of each proposed acquisition by the respective boards of directors of the Corporation and the Target Companies and the receipt of all necessary corporate and regulatory approvals, including the acceptance of the TSX Venture Exchange. There can be no assurance that these acquisitions will be completed.

The acquisition of each Target Company is an arm's length transaction and, subject to the satisfaction of the conditions precedent, is anticipated to be completed in July, 2006 following the completion by the Corporation of its previously announced acquisition(s) of Sphere Drilling Fluids Ltd., which is anticipated to close on May 31, 2006. Additional details regarding each of the Target Companies and the terms of the respective acquisitions will be announced in due course.

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

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)
    For investor relations information:
    Cordy Oilfield Services Inc.
    David Orr
    Vice President - Corporate Development