Wellco Energy Services Trust

Wellco Energy Services Trust

September 19, 2005 18:30 ET

Wellco Announces Acquisition of Flo-Safe Systems and a 6.25% Cash Distribution Increase

CALGARY, ALBERTA--(CCNMatthews - Sept. 19, 2005) - Kenneth M. Bagan, President & CEO, is pleased to announce that Wellco Energy Services Trust (TSX:WLL.UN) through its subsidiary Wellco Energy Services Inc. ("Wellco" or the "Company") has reached substantial agreement for the acquisition of all of the outstanding shares of Flo-Safe Systems ("Flo-Safe") a Red Deer, Alberta based private company engaged in production-testing and related businesses. The transaction has received the approval of Wellco's Board of Directors, and is now subject only to regulatory approval and the completion of formal documentation. Closing is scheduled for October 3, 2005.

The total purchase price, including assumed net debt and transaction costs, will be approximately $8.85 million, payable in cash. Wellco will make use of its current debt facilities to fund the transaction.

The acquisition of Flo-Safe adds 22 units to Wellco's existing production-testing business in Red Deer and expands the coverage area to include Grande Prairie. The addition of Flo-Safe, together with Trueline Oilfield Services Inc. ("Trueline") acquired in May 2005, and the two new units presently being built, will bring Wellco's fleet to 31 production-testing units by the end of fiscal 2005.

For the fiscal year ended October 31, 2004 Flo-Safe generated $2.2 million of cash flow before tax on revenues of $8.9 million, and in fiscal 2005 was on track to generate cash flow of approximately $2.4 million on $9.2 million in revenues.

As a result of the accretive effects of this acquisition and the Trueline acquisition, together with anticipated strong activity levels through the remainder of 2005 and into 2006, the Board of Directors of Wellco has approved an increase to its monthly distributions of 0.5 cents per month to 8.5 cents per unit commencing with the October distribution. On an annualized basis the Company will now be distributing $1.02 per trust unit.

Wellco Energy Services Trust is a growth oriented income trust that provides a diversified suite of oilfield services to the Canadian energy industry.

TSX has neither approved nor disapproved this information.

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