Tuscany International Drilling Inc.
TSX : TID

Tuscany International Drilling Inc.

September 16, 2011 08:06 ET

Tuscany International Drilling Inc. Announces Completion of Caroil Acquisition

CALGARY, ALBERTA--(Marketwire - Sept. 16, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF THE U.S. SECURITIES LAWS.

Tuscany International Drilling Inc. ("Tuscany") (TSX:TID) is pleased to announce that it has closed the acquisition of all of the issued and outstanding shares of Caroil SAS, a drilling and work-over subsidiary of Établissements Maurel & Prom ("M&P"). Tuscany acquired Caroil in exchange for US$120 million in cash and the issuance of 81,500,000 common shares of Tuscany and 27,500,000 zero cost, non-transferable, non-voting common share purchase warrants of Tuscany.

Messrs. Michel Perret and Paul-André Canel have joined the board of directors of Tuscany as the board appointees of M&P pursuant to the terms of the shareholder rights agreement entered into at closing.

"Tuscany is very pleased with the Caroil transaction, which offers substantial growth and key management that will enhance the company's future" stated Walter Dawson, Tuscany's Executive Chairman. "Our efforts over the coming months will be focused on integrating this acquisition and continuing to improve operational efficiency company-wide," added Reg Greenslade, President and CEO of Tuscany.

New Credit Facility

The cash portion of the purchase price of the Caroil acquisition was funded pursuant to an amended and restated credit facility entered into at closing with Credit Suisse and certain other lenders, providing for a US$220 million senior secured guaranteed term loan and revolving credit facility, of which US$195,000,000 was drawn under the term loan at closing. The new term loan refinances Tuscany's prior term loan facility, matures on September 15, 2016 with quarterly principal repayments commencing on March 15, 2013 and accrues interest at a rate of 3-month LIBOR plus 6.5%, payable quarterly. The facility is guaranteed by subsidiaries of Tuscany and secured by an amended and restated security agreement granting a continuing first priority security interest in all of Tuscany's, Tuscany South America Ltd.'s and such subsidiaries' right, title and interest in, to and under any and all of their present and after acquired personal property, including all equity interests in their respective subsidiaries, subject to limited exclusions.

Financial Advisor

Jennings Capital Inc. acted as Tuscany's sole financial advisor in regards to the acquisition.

About Tuscany

Tuscany, a corporation headquartered in Calgary, Alberta, is engaged in the business of providing contract drilling and work‐over services along with equipment rentals to the oil and gas industry. Tuscany is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Ecuador and Brazil.

Tuscany trades on the Toronto Stock Exchange under the symbol TID.

READER ADVISORY

Statements in this press release contain forward-looking information. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Tuscany. These risks include, but are not limited to: the timely construction, refurbishment and deployment of drillings rigs, the successful negotiation of drilling contracts, the oil and gas industry, commodity prices and exchange rate changes, regulatory changes, successful exploitation and integration of technology, customer acceptance of technology, changes in drilling activity and general global economic, political and business conditions. Industry related risks could include, but are not limited to: operational risks, delays or changes in rig construction, refurbishment and deployment, plans, health and safety risks and the uncertainty of estimates and projections of costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Tuscany does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Tuscany International Drilling Inc.
    Walter Dawson
    Executive Chairman
    (403) 265-8258
    (403) 265-8793 (FAX)

    Tuscany International Drilling Inc.
    Reg Greenslade
    President & CEO
    (403) 265-8258
    (403) 265-8793 (FAX)

    Tuscany International Drilling Inc.
    Matt Moorman
    CFO
    (403) 265-8258
    (403) 265-8793 (FAX)

    Tuscany International Drilling Inc.
    Suite 1950, 140-4th Avenue S.W.
    Calgary, Alberta
    (403) 265-8258
    (403) 265-8793 (FAX)
    www.tuscanydrilling.com