PARTIAL SALE - PES-tse Peak
TSE SYMBOL: PES
MARCH 21, 2001 - 09:54 EST
Peak Energy Services Ltd. Announces Sale of Chimo
Equipment Ltd. to Tuboscope Vetco Canada Inc.
CALGARY, ALBERTA--Peak Energy Services Ltd. ("Peak") announces
that it has sold the shares of it's wholly owned subsidiary, Chimo
Equipment Ltd. ("Chimo") to Tuboscope Vetco Canada Inc.
("Tuboscope"), a Canadian subsidiary of Varco International, Inc.
of Houston, Texas for total cash proceeds of $27,500,000 Cdn.
Chimo is a leading provider of drilling instrumentation to the
Canadian oil and gas industry.
Peak believed that the value of its investment in Chimo was not
being accurately reflected in its share price. With management's
focus on creating shareholder value, the sale to Tuboscope was a
means to monetize what Peak believed to be the intrinsic value of
Chimo.
The sale of Chimo will result in a gain on sale net of tax of
approximately $12,000,000 ($0.36 basic per share). A portion of
the proceeds from the sale of Chimo will be used to repay Peak's
long-term debt. Long-term debt net of cash will be reduced to
approximately $12 million. With the gain on sale, Peak's
shareholders' equity increases to approximately $100 million
($3.00 per share). Due to the reduction in long-term debt, Peak's
2001 earnings estimates are only marginally affected by this
transaction due to significantly lower interest costs.
As a result of this sale, Peak is better positioned to continue
with its consolidation strategy with undrawn lines of credit of
$40 million and a strong working capital position and equity base.
Peak continues to review several alternatives to enhance
shareholder value including, but not limited to, the continued
repurchase of its shares under its normal course issuer bid and
potential mergers with or acquisitions of complementary businesses
in the oil and gas services sector.
Peak management will be holding a conference call at 12:00 noon
MST on Thursday, March 22, 2001. Those interested in
participating can do so by calling 1-877-323-2011 in Canada and
the United States or 1-416-695-7896 from outside North America.
Peak is a diversified energy services company providing oilfield
rental equipment and related services to the petroleum industry in
Western Canada. Peak's shares are listed on The Toronto Stock
Exchange under the symbol "PES". |
