Ceiba Energy Services Inc.
TSX VENTURE : CEB

Ceiba Energy Services Inc.

February 03, 2014 09:00 ET

Ceiba Energy Services Inc. Announces Closing of Acquisition of Cam-Star Resources (1990 Ltd.)

CALGARY, ALBERTA--(Marketwired - Feb. 3, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Ceiba Energy Services Inc. ("Ceiba" or the "Company") (TSX VENTURE:CEB) is pleased to announce it has completed its previously announced acquisition of all of the issued and outstanding shares of Cam-Star Resources (1990) Ltd. ("Cam-Star") on February 1, 2014, for a purchase price of $2.5 million cash (the "Acquisition"), subject to normal post-closing adjustments. The Acquisition was funded with the net proceeds of the Company's recent $2.6 million equity unit financing.

Summary of the Acquisition

Cam-Star is a privately owned operator of water disposal facilities in Central Alberta. It has three licensed Class II operating disposal wells and associated equipment and one licensed, suspended disposal well. The operating disposal wells have a total surface storage capacity of approximately 1700 m3 and a daily injection capacity of 1000 m3 (6,200 bbls). Two of the operating disposal wells are located near Camrose, Alberta, 70 km south east of Edmonton and 80 km west of Ceiba's Kinsella terminal and have been operating for over ten years. The third operating disposal well is near Ponoka, Alberta approximately 100km south of Edmonton and has been in operation for one year.

Strategic Rationale

  • The Acquisition is expected to provide Adjusted EBITDA of approximately $450,000 for 2014. Management believes that there is significant potential to increase future revenues through focused marketing efforts and operational enhancements.
  • There are over 20,000 producing wells within 100 km radius of Cam-Star's operating disposal wells.
  • With the completion of the Acquisition, Ceiba has established a network of six operating sites from Grande Prairie southeast to Kinsella and south to Ponoka.

"We are pleased to have closed this Acquisition," said Ian Simister, President. "This is another significant step forward in Ceiba's strategic plan to provide our customers with disposal options where they need it most, as we continue to build our business both with organic projects like Chamberlain and acquisitions like Cam-Star."

The Acquisition remains subject to final approval from the TSX Venture Exchange.

Future Plans and Outlook

In addition to completion of the Acquisition, the Company remains focused on its capital and growth plans for 2014. Ceiba expects that these plans will include expanding services at the Silver Valley facility as well as initiating wastewater disposal services at its Athabasca site. The Company continues to evaluate and seek additional acquisition and expansion opportunities.

About Ceiba

Ceiba provides specialized services to the energy sector, specifically to companies involved in the exploration, extraction and production of oil and natural gas in under serviced market space throughout Western Canada. Ceiba develops and constructs facilities in proximity to its customers to provide treatment of crude oil emulsion, terminalling, storage and marketing of oil and disposal of production water.

Reader Advisory

Certain information regarding Ceiba in this news release, including management's assessment of the benefits from the completion of the Acquisition, management's projected Adjusted EBITDA, the Company's ability to expand services at the Silver Valley facility and its Athabasca site, and the Company's future revenues and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with receipt of regulatory approvals the Company's ability to meet its growth expectation, the Company's ability to secure financing as required, risks associated with oilfield services operations, general risks associated with oil and gas exploration, development, production, marketing and disposal of waste, loss of markets, environmental risks, competition from other service providers, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Ceiba's operations and financial results are included in reports on file with Canadian securities regulatory authorities and identified in Ceiba's management discussion and analysis for the year ended December 31, 2012 ("MD&A"), and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements or information contained in this news release are made as of the date hereof and Ceiba does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

This news release includes the term Adjusted EBITDA which has been defined as net income, plus income taxes, total other (income) expenses, depreciation and amortization and non-cash charges for share-based compensation, commission costs and transaction costs. EBITDA as presented does not have any standardized meaning prescribed by international financial reporting standards and therefore may not be comparable with the calculation of similar measure for other entities. Management analyzes Adjusted EBITDA as a key indicator for the results generated by the Company's core business activities.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.

Ceiba Energy Services Inc.

Please visit Ceiba's website at: www.ceibaenergy.com

Contact Information

  • Ceiba Energy Services Inc.
    Ian Simister
    President
    403-262-2783

    Ceiba Energy Services Inc.
    Shankar Nandiwada
    CFO
    403-262-2783

    Ceiba Energy Services Inc.
    Todd Hanas
    Investor Relations
    1-866-869-8072
    thanas@ceibaenergy.com
    www.ceibaenergy.com