New West Energy Services Inc.
TSX VENTURE : NWE

January 17, 2012 17:14 ET

New West Energy Services Inc. Announces Sale of Operating Assets of its Drilling Fluid Subsidiary

CALGARY, ALBERTA--(Marketwire - Jan. 17, 2012) - New West Energy Services Inc. (TSX VENTURE:NWE) (the "Corporation") is pleased to announce that the Corporation has entered into an agreement with a Calgary-based oil and gas service company to sell the operating assets of New West Drilling Fluids Inc. ("NWDF"), a subsidiary of the Corporation, for an aggregate purchase price of $3.4 million, subject to certain customary closing adjustments. The full purchase price is payable in cash at closing. The operating assets of NWDF include certain equipment, drilling fluid products, patents including that for BITUDRIL, trademarks, license agreements and customer lists. NWDF will retain its laboratory, receivables and tax losses. The transaction is scheduled to close on January 25, 2012, subject to certain customary closing conditions.

Mr. Gerry Kerkhoff, President and Chief Executive Officer of the Corporation, explained, "We believe the proceeds from the sale can be used to add shareholder value through growth into business verticals more in line with the Corporation's current business model. The Corporation will be investigating acquisition opportunities subsequent to the closing of the transaction."

For the six months ended October 31, 2011, NWDF had revenues of $2,282,542 which represent approximately 23% of the Corporation's total revenue for the period. Net earnings of NWDF for the same period were $60,751 which represent approximately 7% of the Corporation's total earnings for the six months ended October 31, 2011.

The Corporation's other major subsidiary, BearStone Environmental Solutions Inc. ("BearStone") has continued to grow since starting operations in June of 2010. For the six months ended October 31, 2011, BearStone had revenues of $7,511,285 and net earnings of $1,006,541 which is an increase of $4,332,452 and $906,854 respectively from the same period in 2010. BearStone provides environmental services and operates a fleet of specialized vacuum and water trucks to the upstream oil and gas industry throughout Western Canada.

Mr. Kerkhoff added, "We will continue to look for new technologies in the environmental field and believe the Western Canadian sedimentary basin provides us with many opportunities to grow and diversify in the future."

The Corporation's financial statements and its Management Discussion and Analysis can be found on www.sedar.com.

About New West Energy Services Inc.

The Corporation operates in the oil field service industry in Canada through its wholly-owned subsidiary BearStone Environmental Solutions Inc. BearStone provides environmental services to the upstream oil and gas industry and operates a fleet of specialized vacuum and water trucks.

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

Contact Information

  • New West Energy Services Inc.
    Gerry E. Kerkhoff
    President & Chief Executive Officer
    403.984.9798 or 1.888.977.2327 (BEAR)
    403.984.9799 (FAX)
    gkerkhoff@bearstoneenviro.com