Estrella International Energy Services Ltd.
TSX VENTURE : EEN

Estrella International Energy Services Ltd.

January 13, 2011 09:00 ET

Estrella International Energy Services Ltd. Announces Proposed Acquisition of a 49% Interest in Petroland S.A.S. and Zigma Columbia Petroleum Services S.A.

CALGARY, ALBERTA--(Marketwire - Jan. 13, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX VENTURE:EEN) is pleased to announce that it has entered into a letter of intent to acquire a 49% interest in Petroland SAS ("Petroland") and Zigma Columbia Petroleum Services S.A. ("Zigma") (collectively the "Acquisiton"). The letter of intent includes the binding right to acquire the remaining 51% at Estrella's option. Each of Petroland and Zigma are oil and gas services companies based in Colombia.

The Company will initially purchase 49% of the issued and outstanding shares of each of Petroland and Zigma for an aggregate purchase price of approximately US$10.5 Million (the "Purchase Price"). The Purchase Price will be paid in cash, and will be paid from the proceeds of a private placement financing of subscription receipts of the Company, previously announced on December 23, 2010 (the "Financing"). The Acquisition is scheduled to close on or about Jan. 20th, and is conditional upon completion of the Financing and finalization of formal documentation and is subject to regulatory approval.

In connection with the Acquisition, the Company has also been granted an option to acquire an additional 11% of the issued and outstanding shares (the "First Option") and the final 40% of the issued and outstanding shares (the "Second Option") of each of Petroland and Zigma. The Purchase price for the First Option is approximately US$2.3 Million and shall be exercisable up to five (5) Business Days prior to March 31, 2011. If Estrella decides to exercise the First Option, it will automatically exercise the Second Option for which the Purchase Price will be based on the actual earnings of Petroland and Zigma for the 2011 fiscal year. Closing of the Second Option is expected to occur in the first quarter of 2012.

Petroland is a well established company, with a primary operations base in Barrancabermeja. Petroland has six workover rigs and one drilling rig, all of which are currently operating on contracts. Zigma has a reemerging presence in the Llanos basin which operates three drilling and two workover rigs. Three of these rigs are currently operating on contract. With the addition of the rigs from Petroland and Zigma on a combined basis Estrella will have seventeen rigs in Colombia. Both companies are headquartered in Bogota and are managed by the same executive management team, who we expect will be staying with the companies at least through the 2011 calendar year.

Warren Levy, Chairman and CEO of Estrella commented: "We continue to successfully pursue our objectives for growth in the region. By moving to acquire Petroland and Zigma, the Company strengthens its foothold in the Colombian market and has made significant strides to both diversify our operations and customer bases."

Statements in this press release may contain forward-looking information, including statements regarding future financing and acquisition opportunities and receiving final Exchange approval. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the future business plans and services and final Exchange approval of the Merger.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

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 accuracy of this release.

Contact Information

  • Estrella International Energy Services Ltd.
    Christian Bauwens
    Chief Financial Officer
    +54 (11) 5217-5250
    or
    Estrella International Energy Services Ltd.
    Warren Levy
    Chairman &Chief Executive Officer
    +54 (11) 5217-5250
    +54 (11) 5217-5280 (FAX)
    info@estrellasp.com