SERVICE SECTOR / Inter-Tech Drilling Solutions Ltd. Mails
Directors' Circular in Response to the Take-Over Bid Made by
Precision Drilling Corporation
TSE SYMBOL: IDL
MAY 25, 1998
CALGARY, ALBERTA--
Directors' Circular
Inter-Tech Drilling Solutions Ltd. ("Inter-Tech") (IDL.TSE)
announced that its Board of Directors has mailed today a
Directors' Circular containing the Board's recommendation that
Inter-Tech shareholders accept the offer of Precision Drilling
Corporation ("Precision") to acquire all of the outstanding common
shares of Inter-Tech on the basis of $2.10 per share. The
recommendation of the Inter-Tech Board of Directors was based,
among other things, on the review of the Precision offer by a
Special Committee consisting of an independent director and a
fairness opinion received from Goepel McDermid Inc.
The Precision offer expires at 3:00 p.m. (Calgary time) on June
16, 1998 and is conditional upon, among other things, the
completion prior to the expiry time of the acquisition of Big D
Rentals & Sales (1981) Ltd. by Inter-Tech by way of a plan of
arrangement (the "Big D Arrangement") as disclosed in the
Information Circular dated May 11, 1998 which has been mailed to
the shareholders of Inter-Tech. In addition, the Precision offer
is conditional upon not less than 66 2/3 percent of the
outstanding Inter-Tech common shares (on a fully-diluted basis)
being tendered under and not withdrawn from the offer and
obtaining all required regulatory and stock exchange approvals.
If the offer is successful, Precision intends to take such steps
as may be advisable in order to acquire 100 percent of the
outstanding Inter-Tech common shares.
Certain shareholders of Inter-Tech have agreed to tender all of
the Inter-Tech common shares which they will receive upon
completion of the Big D Arrangement which represents approximately
62 percent of the outstanding Inter-Tech common shares.
Midland Walwyn Capital Inc. and Newcrest Capital Inc. are the
dealer managers for the offer and CIBC Mellon Trust Company is the
depository.
First Quarter Results
Inter-Tech announces a record first quarter for the three months
ending March 31, 1998. Revenues increased over 250 percent for a
total of $6,137,148. EBITDA increased from $76,664 to $2,236,750
while earnings increased over 560 percent to $974,322.
Inter-Tech's strong performance was a result of healthy activity
in its Canadian, South American, European and Asian markets. This
is a result of the Company's long-term strategy of positioning
itself both as a leader in underbalanced drilling technologies and
maintaining the Company's rotating blowout preventer (RBOP(tm)) as
a premier well control tool for underbalanced drilling. The
Company continues to see strong domestic and international demand
for underbalanced drilling as world producers begin to apply this
technology to increase the value of their reservoirs.
/T/
FINANCIAL HIGHLIGHTS
Three months ended March 31, 1998
Three months ended March 31, 1998 1997
--------------------------------------------------------------
Revenue $6,137,148 $1,741,898
EBITDA (1) $2,236,750 $ 76,664
Cash flow (2) $1,172,247 -
Net earnings $ 974,322 $(207,733.00)
Net earnings per share $ 0.06 $ (0.01)
Net capital expenditures $ 225,535 $ 294,594
Long-term debt at March 31, 1998 $ 880,360 $ 1,320,744
Number of shares outstanding 16,426,254 16,426,254
--------------------------------------------------------------
/T/
(1) EBITDA - Earnings before interest, taxes, depreciation and
amortization.
(2) Net earnings plus depreciation, amortization and deferred
charges.
Inter-Tech is an oilfield technology and services company that
specializes in adding value to oil and gas companies through safe
underbalanced drilling. This is completed by using the company's
proven and reliable rotating blowout preventer, its engineering
services and surface equipment.
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