CALGARY, Sept. 12, 2011 /CNW/ - Secure Energy Services Inc. ("Secure" or the "Corporation") (TSX:SES) announced today that it has entered into an agreement with Emerge Oil & Gas Inc. ("Emerge") to acquire Emerge's Silverdale (02-06-049-27 W3M) processing facility for an aggregate cash purchase price of $18.0 million, subject to certain customary closing conditions. Closing is expected to occur on September 30, 2011.
Summary of the Acquisition
The Silverdale processing facility currently provides oil terminalling, emulsion processing and produced water disposal services. Secure intends to expand the service offerings at Silverdale to include the full suite of services it provides at its other facilities, and to market its services to all industry participants. In addition, Secure will continue to offer the services previously provided by Silverdale to existing customers, including Emerge.
The processing facility consists of multiple crude oil unload risers, tankage, two heavy oil treaters, two disposal wells, and is pipeline connected. Emerge has committed certain volumes from existing production within a specified geographic area.
Emerge will enter into a mutually agreeable non-competition agreement.
The acquisition is being made pursuant to an asset purchase agreement between Emerge and Secure which provides for the acquisition of all the operating assets and business of the processing facility. Closing of the acquisition is subject to customary closing conditions including receipt of all necessary regulatory and third party approvals. Secure will operate and manage the Silverdale location through its existing operational structure.
This acquisition represents the Corporation's first facility servicing the heavy oil market. The Silverdale processing facility is strategically located within the Lloydminster conventional heavy oil market place and will serve as a base upon which the Corporation will expand its heavy oil presence through new locations and additional services. This acquisition will form the platform upon which the Corporation will seek to acquire additional processing and disposal facilities from oil & gas producers.
About Secure Energy Services Inc.
Secure is a TSX publicly traded energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the Western Canadian Sedimentary Basin.
The Corporation operates two divisions:
Processing, Recovery and Disposal Division ("PRD"): Operating under the trade name Secure Energy Services, the processing, recovery and disposal services division focuses on clean oil terminalling, custom treating of crude oil, crude oil marketing, produced and waste water disposal, oilfield waste processing, landfill disposal and oil purchase/resale service.
Drilling Services Division: Operating under the trade names Marquis Alliance and XL Fluids, the drilling services division focuses on drilling fluid systems, solids control, equipment rental service, drilling waste management and environmental services. The drilling fluids service line includes the design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas.
Cautionary Statement Regarding Forward-Looking Information
Statements in this press release contain forward-looking statements, including statements regarding the anticipated timing and closing of the acquisition of the Silverdale processing facility and Secure's expansion of services at the facility. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous unknown risks, uncertainties, and other factors, many of which are beyond the control of Secure. These risks include, but are not limited to, the risks identified in Secure's Annual Information Form for the year ended December 31, 2010 under the heading "Risk Factors" and in Secure's Management Discussion and Analysis for the year ended December 31, 2010 under the heading "Business Risks" and also includes the risks associated with failing to satisfy all conditions to closing the acquisition; risks associated with the possible failure to realize the anticipated synergies in integrating the operations of the Silverdale facility with the operations of Secure; the risks associated with the oil and gas industry, commodity prices and exchange rate changes, regulatory changes, successful exploitation and integration of technology, customer acceptance of technology, changes in drilling activity and general global economic, political and business conditions. Industry related risks could include, but are not limited to: operational risks, delays or changes in plans, health and safety risks and the uncertainty of estimates and projections of costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Secure does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.
The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.