Peak Energy Services Trust
TSX : PES.UN

Peak Energy Services Trust

April 15, 2008 17:13 ET

Peak Energy Services Trust to Sell Assets of Cased Hole Wireline Division to Canadian Sub-Surface Energy Services Corp.

CALGARY, ALBERTA--(Marketwire - April 15, 2008) - Peak Energy Services Trust (TSX:PES.UN) ("Peak") has entered in to a purchase and sale agreement with Canadian Sub-Surface Energy Services Corp. ("Cansub") in which Peak will sell all of its cased hole (electric line) wireline assets to Cansub for gross proceeds of $6.5 million. Peak's carrying value of these assets is approximately $6.7 million. These assets consist of five cased hole wireline units, two picker trucks along with all related electric line tools and equipment. Upon the signing of the purchase and sale agreement, a $1.5 million non-refundable deposit was received by Peak with the balance of proceeds due on closing. The closing of this transaction is expected to occur on or before May 2, 2008.

Peak entered the cased hole wireline business during the second half of 2006 with the intention of building a fleet of "state of the art" cased hole wireline units to complement its much larger slick line wireline operation of 25 units. Since that time, industry activity has been negatively impacted by high levels of natural gas inventory resulting in depressed natural gas pricing. These adverse conditions created a highly competitive marketplace that curtailed Peak's original plan to aggressively expand this product line.

The use of proceeds generated in this sale of assets will be for general corporate purposes and the repayment of long-term debt. The consequential strengthening of Peak's balance sheet corresponding to this transaction will better position Peak to take advantage of growth opportunities that it has identified, including those related to the recent merger of Peak with Wellco Energy Services Trust.

About Peak Energy Services Trust

Peak Energy Services Trust is a diversified energy services organization operating in western Canada and the mid-west United States of America. Through its various operating divisions, Peak provides drilling and production services to its customers both in the conventional oil and gas industry as well as the oil sands regions of western Canada. The Trust also provides water technology solutions to a variety of customers throughout North America. Peak's units are listed on the Toronto Stock Exchange under the symbol "PES.UN".

Certain information set forth in this news release, including management's assessment of Peak's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, competition from other industry participants, volatility of commodity prices, currency fluctuations, environmental risks, 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. Peak's actual results, performance or achievement could differ materially 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 that Peak will derive there from. Peak disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The TSX have neither approved nor disapproved the information contained herein.

Contact Information

  • Peak Energy Services Trust
    Mr. Curtis W. Whitteron
    President and Chief Executive Officer
    (403) 543-7325
    (403) 543-7335 (FAX)
    or
    Peak Energy Services Trust
    Mr. Matthew J. Huber
    Executive Vice President
    (403) 543-7325
    (403) 543-7335 (FAX)
    or
    Peak Energy Services Trust
    Suite 900, 222 - 3rd Avenue S.W.
    Calgary, Alberta, T2P 0B4