Technicoil Corporation

Technicoil Corporation

July 13, 2007 13:16 ET

Technicoil Announces Acquisition of Storm Service Rigs Inc.

CALGARY, ALBERTA--(Marketwire - July 13, 2007) -


Technicoil Corporation (TSX:TEC) ("Technicoil" or the "Corporation") is pleased to announce that it has entered into purchase & sale agreements to acquire the shares of Storm Service Rigs Inc., a privately held service rig company ("Storm"). The primary assets of Storm are a fleet of seven conventional service rigs, including associated equipment, positive working capital and an eighth service rig under construction. The terms of the transaction call for Technicoil to pay aggregate consideration of approximately $26 million, of which $8 million will be in cash, $4 million through the assumption of existing debt and the balance comprised of 13.9 million common shares of Technicoil.

The service rigs being acquired are all recently constructed conventional units, with the oldest rig being constructed in 2004. The operations of Storm are primarily in Alberta, however, the rigs are capable of operating throughout the Western Canadian Sedimentary Basin. Technicoil plans to operate the acquired service rigs as part of its existing field service operations.

The Chief Executive Officer of Technicoil, Art Dumont, noted that "This transaction is an important and measured step forward in executing the strategic plan of diversifying our field service operations into the conventional well service segment. Storm has built a strong reputation for quality and execution in the industry and we are excited to add these rigs, field managers and crews to our operations. This acquisition provides us with a strong basis from which to expand our well servicing activities and further grow this service line."

Based upon the aggregate consideration paid, Technicoil believes that the acquisition is being executed for a price of approximately four times normalized run rate earnings before interest, income taxes, depreciation and amortization ("EBITDA"). The year to date utilization of the seven service rigs has averaged 63% with the current utilization being 100%.

The cash consideration to be paid to conclude the acquisition will be funded through a $10 million acquisition line from the Corporation's existing lender, the National Bank of Canada. The financial terms of this line are the same as those under Technicoil's existing revolving long-term debt facility.

The transaction is subject to normal commercial closing conditions and regulatory approvals, including the approval of the Toronto Stock Exchange. Closing is expected to occur on or about August 1, 2007.

The management of Technicoil will be holding a conference call to discuss the acquisition of Storm at 9:00 am Mountain Standard Time on Monday, July 16, 2007. The dial-in information for this conference call is as follows:

Phone Number: (403) 232-6311

Participant Pass Code: 46248

The Corporation intends to release its 2007 second quarter results subsequent to the close of trading on August 9, 2007.

Technicoil supplies drilling and service operations to the oil and natural gas industry in Canada. Subsequent to the acquisition, Technicoil will operate six coiled tubing drilling rigs, seven conventional well service rigs, and 18 coiled tubing service rigs. A seventh coiled tubing drilling rig, and an eighth conventional well service rig, are expected to be commissioned by the end of 2007.

This news release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may include estimates, plans expectations, forecasts, guidance or other statements that are not statements of fact. Such information, although considered reasonable by Technicoil at the time of preparation is subject to certain risks and uncertainties and may prove to be incorrect and actual results may differ, possibly materially, from expectations. The reader should be aware that historical results are not necessarily indicative of future performance. The Corporation does not undertake an obligation to update its forward-looking statements except as required by law.

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