Peak Energy Services Trust
TSX : PES.UN

Peak Energy Services Trust
Wellco Energy Services Trust
TSX : WLL.UN

Wellco Energy Services Trust

March 12, 2008 18:16 ET

Peak Energy Services Trust and Wellco Energy Services Trust Announce the Closing of Their Merger

CALGARY, ALBERTA--(Marketwire - March 12, 2008) - Peak Energy Services Trust ("Peak") (TSX:PES.UN) and Wellco Energy Services Trust ("Wellco") (TSX:WLL.UN) today are pleased to announce that the merger of Peak and Wellco pursuant to a plan of arrangement (the "Arrangement") was completed today. Under the Arrangement, holders of Wellco trust units received 0.90 of a Peak trust unit for each Wellco trust unit held resulting in an aggregate 16,565,851 Peak units being issued under the Arrangement. The Wellco trust units are expected to be de-listed from the TSX within a few trading days. Peak trust units will continue to trade on the TSX under the symbol PES.UN.

Mr. Curtis W. Whitteron, President and Chief Executive Officer of Peak stated, "Peak's board of directors is very pleased to announce the closing of this transaction. The combination of experienced personnel, complementary products and services, expanded geographic coverage along with increased market share in certain product lines are expected to create value for Peak's customer base and ultimately drive profitability for the company. Management expects the integration process to be completed in a relatively short period of time which will allow Peak to take full advantage of the return to higher levels of activity in the oil and gas industry that is expected in the latter stages of 2008. The critical mass of the merged entity along with its improved financial flexibility will allow Peak to better compete for larger and higher quality growth opportunities that will ultimately generate higher returns and maximize unitholder value."

Ken Bagan, President and Chief Executive Officer of Wellco stated, "We are very pleased to have concluded this transaction and believe that Wellco unitholders stand to benefit from the combination of these two fine companies. We have every confidence in the management team at Peak and in their ability to expand the scope of our businesses."

Completion of Syndicated Credit Facilities

Peak is also pleased to announce that it has closed its previously announced senior syndicated credit facility (the "Credit Facility") arranged by National Bank Financial Inc. as Lead Arranger and Sole Bookrunner, with National Bank of Canada as Administrative Agent and Lender. The Credit Facility consists of a $75 million facility underwritten by National Bank of Canada and is available for general trust purposes and to repay in full the existing credit facilities of Peak and Wellco. A further $25 million commitment may be available if the Credit Facility is successfully syndicated to other lenders. If increased to $100 million, the Credit Facility includes an accordion feature that allows Peak to request an additional $40 million of borrowing capability. The availability of this additional borrowing capability is subject to the satisfaction of certain conditions.

Completion of Private Placement

In addition, Peak is pleased to announce that it has completed the previously announced private placement of Peak trust units through Grafton Capital Corporation at a price of $2.54 per unit for gross proceeds of $10.5 million. The net proceeds of this private placement will be used for general trust purposes.

About Peak Energy Services Trust

Peak Energy Services Trust is a diversified energy services organization providing oilfield equipment and related services to the energy industry in western Canada and the mid-western United States of America. Peak's trust 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