Wenzel Downhole Tools Ltd.

Wenzel Downhole Tools Ltd.

August 04, 2006 13:17 ET

Wenzel Board Adopts Shareholder Rights Plan

CALGARY, ALBERTA--(CCNMatthews - Aug. 4, 2006) - Wenzel Downhole Tools Ltd. ("WZL" or the "Company") (TSX:WZL) announced today that the Board of Directors of the Company ("Board of Directors") has adopted a new shareholder rights plan ("Rights Plan"), effective August 3, 2006. The adoption of the Rights Plan is subject to the approval of the Toronto Stock Exchange, and the adoption of the Rights Plan must be ratified by shareholders within six months or the Rights Plan will be terminated.

The Company has issued one right (a "Right") in respect of each common share outstanding. The Rights Plan is to provide the Board of Directors and the Company's shareholders with sufficient time to properly consider any take-over bid made for the Company and to allow enough time for competing bids and alternative proposals to emerge. The Rights Plan also seeks to ensure that all Company shareholders are treated fairly in any transactions involving a change in control of the Company and have an equal opportunity to participate in the benefits of a take-over bid.

Under applicable laws, the Board will be permitted to utilize the Rights Plan to allow additional time to negotiate with third parties which are considering making competing bids, but the Rights Plan cannot be utilized to deny shareholders the opportunity to tender into any tender offer. The Rights Plan will not prevent an offer made to all shareholders for all of their shares.

The Rights issued under the Rights Plan become exercisable when a person, together with any parties related to it, acquires or announces its intention to acquire 20% or more of the Company's outstanding common shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of the Board of Directors.

Since expiry of the take-over bid made by High Arctic Energy Services Limited Partnership, the Company is not aware of any specific take-over bid that has been made for the Company or is currently being contemplated.

About Wenzel Downhole Tools Ltd.

Wenzel Downhole Tools Ltd. is a manufacturer, seller and renter of drilling tools used in oil and gas exploration. In Canada the Company has its manufacturing and servicing facilities located in Edmonton, Alberta and its corporate offices in Calgary, Alberta. Its U.S. headquarters and service facilities are in Conroe, Texas, with a service and sales office in Casper, Wyoming and a sales office in Oklahoma City, Oklahoma.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.

Contact Information

  • Wenzel Downhole Tools Ltd.
    Harvie Andre
    President and CEO
    (403) 205-6696
    (403) 265-8154 (FAX)
    Wenzel Downhole Tools Ltd.
    Ron Dooley
    (403) 205-6696
    (403) 265-8154 (FAX)
    Website: www.downhole.com