SERVICE SECTOR / Stellarton Energy Announces Purchase of Cummings Oil Tools
CALGARY, Jan. 21 /CNW/ - Stellarton Energy Corporation (TSE:SRT.A) is
pleased to announce that it has purchased the business and assets of Cummings
Oil Tools for 526,316 Stellarton shares for a total consideration of
approximately $1.0 million. An additional cash amount of approximately
$600,000 for inventory and other working capital items was also paid on
closing. The transaction is effective January 1, 1999 and has been done
through Stellarton's SECURE OIL TOOLS division based in Edmonton, which
provides oil and gas tool products to customers in Canada and around the
world.
Cummings Oil Tools, a Red Deer-based private company, was founded in 1993
by Wayne Cummings who remains the owner and manager. Cummings Oil Tools is
debt free and Mr. Cummings has built a successful, profitable company with
quality tool products and strong service. Secure is pleased that Mr. Cummings
has agreed to join SECURE as the manager of SECURE's tool operations and will
be responsible for developing and enhancing the tool product line within the
company. Cummings' customers will see no change in the operations or service
of Cummings Oil Tools. Cummings will continue to operate in the same fashion
with the added strength of the broad Secure Oil Tools line of conventional and
specialized oil field tools.
SECURE plans to build on Cummings' success with a broader, enhanced
product line that will allow SECURE to expand its market in Canada for
conventional production tools such as packers and other downhole tools along
with related service. The combined tool operation is expected to generate
immediate cash flow and earnings that are accretive on a per share basis for
Stellarton. This acquisition also provides SECURE with additional manpower
and field support necessary to sell and install MeshRite(TM). MeshRite(TM)
sales continue to increase both domestically and in select international
markets where we have focused our sales efforts for this leading sand screen
technology.
SECURE Oil Tools invents, designs, manufactures and markets a variety of
specialized olifield equipment that enhance well performance and economically
improve the recovery of oil and gas reserves.
Stellarton Energy Corporation is a company with distinct yet synergistic
divisions involved in oil and gas exploitation and production, and oil field
tool and equipment manufacturing and sales.
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