Canadian Sub-Surface Energy Services Corp.
TSX : CSE

Canadian Sub-Surface Energy Services Corp.

May 31, 2006 10:33 ET

Canadian Sub-Surface Energy Services Corp. Announces The Closing of Acquisitions And $19.0 Million Common Share Financing

CALGARY, ALBERTA--(CCNMatthews - May 31, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

ACQUISITON CLOSINGS

Canadian Sub-Surface Energy Services Corp. ("CanSub" or the "Company") (TSX:CSE) is pleased to announce the closing of the previously announced acquisition of the assets of Colter Production Services Inc. ("Colter"). The acquisition of Colter adds 16 production testing units, which in addition to CanSub's fleet of 32 production testing units, will create one of the largest production testing company's operating in the Western Canadian Sedimentary Basin. The purchase price of $13.75 million was satisfied by the payment of 60% cash and 40% shares.

CanSub is also pleased to announce the closing of the previously announced acquisition of the assets of owner/operator Southern Wireline Services Ltd. ("Southern Wireline"). The closing of the Southern Wireline acquisition is the first of the three previously announced owner/operator acquisitions. The assets of Southern Wireline include 4 wireline trucks based in Medicine Hat, Alberta.

EQUITY FINANCING

Concurrent with the closing of Colter and Southern Wireline, CanSub closed its previously announced equity financing. At closing, a total of 2,533,333 shares, which includes 200,000 shares issued upon exercise of an underwriter's option, were issued for gross proceeds of $19.00 million. The offering was underwritten by a syndicate of underwriters led by Raymond James Ltd. and including Sprott Securities Inc. and Westwind Partners Inc. The net proceeds of the offering were used to fund the Colter and Southern Wireline asset acquisitions and for general working capital purposes.

CanSub is Calgary-based and provides cased-hole wireline, production testing, well optimization and swabbing services to junior, intermediate and senior oil and gas exploration and production companies, with operations focused in Western Canada. CanSub's available fleet, subsequent to the acquisitions, will include 32 wireline trucks, 4 swabbing units and 48 testing packages from 9 locations across the Western Canadian Sedimentary Basin.

Certain information set forth in this press release contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of oil and gas prices, currency fluctuation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Actual results, performance or achievement could differ from those expressed in, or implied by, these forward-looking statements, and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits will be derived there from. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Canadian Sub-Surface Energy Services Corp.
    Brad Gabel
    President and CEO
    (403) 262-3247
    or
    Canadian Sub-Surface Energy Services Corp.
    Chris Martin
    V.P. Finance and CFO
    (403) 213-6794
    or
    Canadian Sub-Surface Energy Services Corp.
    600, 505 - 8th Avenue S.W.
    Calgary, Alberta T2P 1G2