CALGARY, ALBERTA--(Marketwire - Nov. 21, 2012) - Canadian Energy Services & Technology Corp. ("CES" or the "Company") (TSX:CEU) (OTCQX:CESDF) is pleased to announce that it has acquired all of the drilling fluids business assets (the "Acquisition") of Tervita Corporation ("Tervita"), a leading North American energy and environmental services company. As part of the Acquisition, Tervita's key field, technical and sales focused drilling fluids employees will join CES. CES and Tervita have also entered into both a streaming agreement ("Streaming Agreement") whereby CES will purchase oil recovered from certain Tervita facilities, and a marketing agreement ("Marketing Agreement") whereby CES and Tervita will strategically market integrated services across North America in opportunistic situations where an integrated offering is requested by or provides an advantage to the customer.
"We are acquiring a market leading oilsands mud system, additional drilling fluids customers, and excellent drilling fluids sales, technical and field personnel, who will complement our position as North America's premier independent drilling fluids provider," said Tom Simons, CEO and president of CES. "We are also very pleased to be aligned with Tervita, the clear market leader in the provision of oilfield water and waste handling."
"Tervita is always looking for ways to collaborate with market leaders to offer the best solutions to our oil and gas customers," said John Gibson, CEO and president of Tervita. "These agreements are strategic and intended to help both companies enhance service offerings to customers throughout North America. It is also a great opportunity for our employees to build their careers with an industry leader."
"We respect Canadian Energy Services and its leadership because we have strong cultural alignment and shared values of integrity and customer satisfaction. We will be able to build on this trust and collaboration and continue to deliver high results for our customers."
Strategic Rationale of the Transactions
Successful completion of the Acquisition, the Streaming Agreement, and the Marketing Agreement with Tervita (the "Transactions") is expected to strengthen CES' position as the leading independent North American drilling fluids provider.
The Transactions complement CES' current North American footprint and expand the scale, infrastructure, and operational capabilities of CES within the market.
Tervita and CES will be able to jointly market and execute on new opportunities that require the expertise and scale that only the combined efforts of both companies could provide. When requested, CES and Tervita will be able to provide an integrated service offering to exploration and production customers, from drilling fluids through to recycling and disposal. It enables each company to focus on its core competencies and provides the opportunity to service customers with an increased portfolio.
CES will acquire all of the intellectual property developed at Tervita's drilling fluids business.
CES will add Tervita's key field, technical and sales focused drilling fluids employees, expanding CES' capabilities to effectively reach and service customers.
Management of CES expects the Acquisition to be accretive to CES' cash flow, EBITDA, and earnings.
About Canadian Energy Services & Technology Corp.
CES' business is focused on the design and delivery of technically advanced fluids for the North American oil and gas industry. CES' business model requires limited re-investment capital to grow. As a result, CES has been able to capitalize on the growing market demand for drilling and production fluids in North America while generating free cash flow. CES returns much of this free cash flow back to shareholders through its monthly dividend. Additional information about CES is available at www.sedar.com or at CES' website at www.CanadianEnergyServices.com.
Tervita is a leading North American environmental and energy services company. More than 4,000 dedicated employees partner with natural resource and industrial companies who share our values, and work with them to create a sustainable future. Safety is our highest priority: it influences our actions, guides our decisions and shapes our culture. We maintain a strategically located network of more than 95 state-of-the-art waste management facilities and a fleet of specialized equipment and assets to help customers address production and operational waste challenges. Our highly effective, convenient and environmentally sound solutions help minimize environmental impact and maximize returns.
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