Peak Energy Services Trust

Peak Energy Services Trust

July 14, 2009 18:16 ET

Peak Energy Services Trust Sells Assets of Wireline Division

CALGARY, ALBERTA--(Marketwire - July 14, 2009) - Effective July 15, 2009, Peak Energy Services Trust ("Peak" or the "Trust") (TSX:PES.UN) has sold all of its wireline assets (slick line) for gross proceeds of $5.75 million to an undisclosed third party.

The decision to sell the division was the result of the increased competitive nature of this business line and the lack of current, near-term and future expected industry activity that will continue to diminish the returns being realized by Peak in this business unit.

The immediate use of proceeds generated by the sale of these assets will be for repayment of long-term debt. This sale is part of the Trust's ongoing asset rationalization program, whereby non-core assets identified as not generating an appropriate rate of return are earmarked for potential disposal. Management believes that the sale of these assets will enable the Trust to generate improved returns on invested capital by re-focusing its efforts on its core business lines and reinvesting the proceeds from this transaction at some point in the future. Peak expects to incur a one time accounting impairment loss on the sale of these assets of approximately $12.0 million during the second quarter of this year related to this transaction.

About Peak Energy Services Trust

Peak Energy Services Trust is a diversified energy services organization operating in western Canada and the United States of America. Through its various operating divisions, Peak provides drilling and production services to its customers both in the conventional oil and natural gas industry as well as the oil sands regions of western Canada. The Trust also provides water technology solutions to a variety of customers throughout North America. Peak's units are listed on the Toronto Stock Exchange under the symbol "PES.UN".

Forward-looking statements

This news release contains forward-looking statements relating to the competitive nature of the wireline business and near-future term expected industry activity which are not historical facts. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The results or events predicated in these forward-looking statements may differ materially from actual results or events.

As a result, you are cautioned not to place undue reliance on these forward-looking statements. Material risk factors that could cause actual results to differ materially from the forward-looking information include; fluctuations in the price and demand for oil and natural gas; currency fluctuations; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for oilfield services that the Trust provides; the effects of weather conditions on operations; the existence of competition from other oilfield service entities; general economic, market or business conditions; public market volatility and the related ability to access sufficient capital to fund activities; availability to access debt financing to fund activities; government policy changes; changes in laws or regulations, including taxation and environmental regulations; the lack of availability of qualified personnel or management; and other unforeseen conditions which could impact the use of services supplied by the Trust.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Peak disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Peak undertakes no obligation to comment on expectations of, or statements made by, third parties in respect to this transaction.

The TSX have neither approved nor disapproved the information contained herein.

Contact Information

  • Peak Energy Services Trust
    Mr. Curtis W. Whitteron
    President and Chief Executive Officer
    (403) 543-7325
    (403) 543-7335 (FAX)
    Peak Energy Services Trust
    Mr. Monty R. Balderston
    Chief Financial Officer
    (403) 543-7325
    (403) 543-7335 (FAX)