International oil services trading companies to be acquired
Shares issued 36668866
1998-03-20 close $0.2
Monday Mar 23 1998
Mr David Yager reports
The company's offer to purchase all of the issued shares of three international oil services trading companies has been accepted by their shareholders. The companies are Premier Sea & Land Pte of Singapore, Premier Sea & Land Limited of Hong Kong, and Westlink International of Calgary. Together these companies will give OTATCO access to oil and gas service markets in Southeast Asia, Europe, the Middle East, and the former SU countries.
For the past three years the Premier companies and Westlink have been
responsible for all of OTATCO's international sales and market development activities. These efforts have helped OTATCO identify a strong need for its products and services internationally.
Total consideration offered for the three companies is six million class A shares of OTATCO, US$10,000 cash, and a percentage of profits from international business activities for the next five years.
Completion of the acquisition is dependent upon completion of share sale and purchase agreements, regulatory approval, and the approval of OTATCO's board of directors. The effective date of the acquisitions will be January 1 1998 with the closing to take place as soon as possible. Following this acquisition, OTATCO will have approximately 42 million shares outstanding.
Based in Singapore and Hong Kong, Premier Sea & Land Pte and Premier Sea and Land Limited have established operations in Southeast Asia, primarily in the areas of oilfield equipment sales, servicing, rentals, trading and procurement for customers in Malaysia, Australia, Thailand, China, Vietnam, Myanmar and Indonesia. Assets and infrastructure include drilling and production tools, rental
equipment, warehousing, and equipment servicing facilities.
In the 12 month period ending December 31 1997 the Premier companies had gross sales of approximately $9 million and after-tax profits of about $580,000. Based on OTATCO's 1997 revenues, this transaction effectively doubles the size of the company.
Based in Calgary, Westlink International represents a variety of Canadian oilfield service and supply companies including OTATCO in Europe, the Middle East and the former SU countries. Through an established network of agents and contacts, Westlink has been helping Canadian companies successfully penetrate foreign markets for the past three years.
With the current slowdown in Western Canada caused by low oil prices,
OTATCO has received strong interest from other Canadian service and supply companies in using OTATCO's network to expand into the international arena.
When OTATCO was created in 1994, its name was shortened from Oilfield
Technology and Trading Company to OTATCO. The intent was to acquire a suite of leading-edge production technologies and services, and expand into markets outside of Canada through international trading activities.
These acquisitions will allow OTATCO to grow in 1998 despite reduced
domestic spending and activity caused by current low oil prices and move closer to its long term objective of being a world leader in the areas of production management and oil and gas well enhancement. |
