CALGARY, ALBERTA--(Marketwired - July 13, 2016) - Trican Well Service Ltd. (TSX:TCW) ("Trican") is pleased to announce that it has closed its previously announced agreement with certain subsidiaries of National Oilwell Varco, Inc. ("NOV") for the sale of Trican's Completion Tools business with operations in Russia, Norway, the United States and Canada (the "Transaction") for aggregate gross proceeds of CAD$53.5 million.
The Transaction involves the sale of all material assets of Trican's subsidiaries, Trican Completion Solutions Ltd. (the Canadian business) and Trican Completion Solutions, LLC (the United States business) and all of Trican's direct and indirect equity interest in each of Petro Tools Holding AS (the Norwegian business) and Trican Completion Solutions LLC (the Russian business), as well as certain assets related to the Completion Tools business held by Trican and certain affiliates.
The consideration received on closing by Trican consists of:
- Cash consideration of CAD$30 million and working capital, net debt and other adjustments of CAD$2.1 million with the final working capital amounts to be determined; and
- Share consideration totaling CAD$23.5 million, consisting of 558,221 common shares of National Oilwell Varco, Inc. This total share count is based on the volume-weighted average price in U.S. dollars of NOV's common stock on the New York Stock Exchange for the five trading days preceding July 13, 2016 and converted at a five-day average USD/CAD noon exchange rate from the Bank of Canada. All shares of NOV common stock received in connection with the Transaction will be subject to a six month holding period from the date of issuance.
Pursuant to the terms of the definitive agreement, Trican has agreed to provide certain transitional services following closing of the Transaction on terms that are customary for transactions of this nature.
Trican intends to use the net cash proceeds from the Transaction to reduce its outstanding debt.
Following completion of the Transaction, Trican's operations will be conducted solely in Canada. Trican provides a comprehensive array of specialized products, services and technology for use in the drilling, completion, stimulation and reworking of oil and gas wells. The largest portion of Trican's operations consists of pressure pumping services which include fracturing, cementing, acidizing, nitrogen and coiled tubing services, all as described in Trican's Annual Information Form dated March 29, 2016.
The Company did not consider its completions tools business to be part of its core business and does not expect that the completion of the Transaction will have a significant impact on its financial performance in the future. Trican's completion tools business accounted for 8.5% and 11.1% of its consolidated assets as at December 31, 2015 and March 31, 2016, respectively.
Cautionary Statements Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as "intend", "estimate" and "estimated", "expect" and other similar words, or statements that certain events or conditions "may" or "will" occur. The forward-looking information in this news release relates, but is not limited to, statements with respect to the sale of Trican's Completion Tools business and the expected use of net proceeds from the Transaction and the impact of the Transaction on Trican's financial condition.
The forward-looking information set out in this news release, is based on certain expectations and assumptions regarding, among other things, the absence of further changes and further economic conditions which may adversely affect Trican.
Forward-looking information is subject to known and unknown risks and uncertainties and other factors which may cause actual results, events and achievements to differ materially from those expressed or implied in such forward-looking information. Actual results could differ materially from those described in this press release as a result of the risk factors set forth under the section entitled "Risks Factors" in our Annual Information Form dated March 29, 2016 and under the section entitled "Business Risks" in our management's discussion and analysis for the year ended December 31, 2015. Readers are also referred to the risk factors and assumptions described in other documents filed by Trican from time to time with securities regulatory authorities.
Trican undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward looking information.
Headquartered in Calgary, Alberta, Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.
Please visit our website at www.tricanwellservice.com