Precision Drilling has entered into an asset purchase agreement to acquire the well servicing business and associated rentals assets of High Arctic Energy Services for $38.2 million.
Precision adds to its Canadian well servicing operation a fleet of 80 service rigs (51 marketed and 29 inactive). The deal provides Precision with rental assets, ancillary support equipment, inventories and spares and six additional operating facilities in key basins, four of which are owned. Additional highlights include:
- A combined marketed fleet of 134 service rigs and represents approximately 20% of Canadian industry well service activity;
- Expected annual operating cost savings of $5 million annually, realizable within one year; and
- Accretive acquisition that supports Precision’s long-term capital allocation and de-leveraging plan through increased cash flow generation.
“This acquisition significantly expands our well servicing division with high-quality rigs and field personnel, strategic regional positioning, and alignment with key customers. High Arctic’s people are well known for their focus on safety and field execution and will complement Precision’s ‘High Performance, High Value’ operating strategy,” said Kevin Neveu, Precision President and CEO.