CALGARY, Oct. 31, 2017 /CNW/ - MATRRIX Energy Technologies
Inc. ("MATRRIX" or the "Corporation") (TSXV: MXX) is pleased to
announce that it has entered into an agreement to acquire all of
the issued and outstanding shares of Stampede Drilling Ltd.
("Stampede"), a private corporation which owns 3 heavy telescopic
double drilling rigs in the Weyburn/Estevan area of southeast Saskatchewan (the "Acquisition").
Under the terms of a pre-acquisition agreement with Stampede
(the "Pre-Acquisition Agreement"), MATRRIX has agreed to make an
offer (the "Offer'') to acquire all of Stampede's outstanding Class
"A" common shares ("Class A Shares") and Class "B" common shares
("Class B Shares" and collectively with the Class A Shares, the
"Stampede Shares") for total consideration of approximately
$7 million (plus the assumption of
debt of approximately $2 million),
consisting of the issuance of common shares of MATRRIX ("MATRRIX
Shares") for a total purchase price of approximately $9 million.
Pursuant to the Offer, holders of Stampede Shares (the "Stampede
Shareholders") will receive 1.25448 MATRRIX Shares for each Class A
Share and 1.25448 MATRRIX Shares for each Class B Share.
Pursuant to the Acquisition, MATRRIX will acquire 3 fully
crewed, modern, heavy telescopic double rigs currently enjoying
profitability and high utilization. It is expected that key
employees and management of Stampede will be retained and continue
with MATRRIX, forming a strong operational nucleus for the
Corporation's southeast Saskatchewan contract drilling business.
Founded in 2011, Stampede is a privately owned and operated
Saskatchewan drilling rig
contractor based in Estevan, SK.
The management team and field staff are local residents of the
Weyburn/Estevan area and have over 60 years of
drilling experience in the southeast Saskatchewan oil and gas services
industry.
With the previously announced acquisition of 3 drilling rigs
from Vortex Drilling Ltd. ("Vortex"), MATRRIX enters the contract
drilling business with 6 modern telescopic double drilling rigs,
all manufactured since 2011, with proven mind and management in
place. With favorable acquisition costs for the Stampede rig
business and the 3 drilling rigs from Vortex, the Corporation
believes the transactions will add meaningfully to financial
results and its base of horizontal and directional drilling
services and technology in the Western Canadian Sedimentary Basin
("WCSB").
The Corporation intends to operate its 6-rig southeast
Saskatchewan contract drilling
business under the Stampede Drilling banner, leveraging from the
excellent reputation of management and field crews associated with
Stampede in the region.
MATRRIX President and CEO Richard
Ryan states; "Since announcing our intended entry into the
contract drilling business in March of this year, we've been
fortunate to attract very high quality drilling rig talent to our
organization, beginning with the return of Elson McDougald to our board of directors in
August. With Lyle Whitmarsh as our
rig division president, and now Jackie
White and Bill Devins of
Stampede Drilling, I couldn't be more pleased with our positioning
as a solid new entrant to the drilling rig industry in the
WCSB."
The Offer is subject to certain conditions including the
acquisition by MATRRIX of not less than 50.1% of the outstanding
Class A Shares and 50.1% of the outstanding Class B Shares and the
receipt of all regulatory approvals, including the approval of the
TSX Venture Exchange ("TSXV"). The board of directors of Stampede
has unanimously recommended that the Stampede Shareholders accept
the Offer. Certain Stampede Shareholders holding 61% of the
outstanding Class A Shares and 100% of the outstanding Class B
Shares have executed lock-up agreements agreeing to deposit their
Stampede Shares in acceptance of the Offer.
Stampede has agreed not to solicit further offers or initiate
discussions or negotiations with any third party concerning the
sale of Stampede, subject to fiduciary obligations. The Offer is
expected to be mailed to all Stampede Shareholders as soon as
practical. It is anticipated that the Acquisition will close on or
about November 21, 2017.
Upon completion of the Acquisition, MATRRIX will have
approximately 58,558,285 shares outstanding.
Lightyear Capital Inc. ("Lightyear") acted as financial advisor
to MATRRIX on the Acquisition.
Private Placement
Concurrent with the acquisition of Stampede, MATRRIX has engaged
Lightyear as its agent to complete a private placement of MATRRIX
Shares on a best efforts basis at a price of $0.31 per MATRRIX Share for gross proceeds of
approximately $7 million (the
"Private Placement"). The proceeds of the Private Placement will be
used to for repayment of debt, capital expansion and working
capital.
Closing of the Private Placement is subject to certain
conditions including, but not limited to, the receipt of all
necessary regulatory approvals including the approval of the
TSXV.
About MATRRIX
The Corporation commenced operations in 2011. MATRRIX has grown
its concurrent capacity of horizontal and directional drilling
systems ("Systems") organically with the acquisition and assembly
of 25 Systems as at the date of this press release. MATRRIX has
developed and implemented a proprietary software platform called
D2ROXTM (pronounced DEE-ROCKS) to aid the
Corporation and its oil and gas clients to drive predictable,
repeatable, cost effective, safe drilling operations at the rig
site.
Forward-looking Information
Certain statements contained in this press release constitute
forward-looking information. This information relates to future
events or the Corporation's future performance. All information
other than statements of historical fact is forward-looking
information. The use of any of the words "anticipate", "plan",
"contemplate", "continue", "estimate", "expect", "intend",
"propose", "might", "may", "will", "could", "believe", "predict"
and "forecast" are intended to identify forward-looking
information.
In particular, this press release contains forward-looking
information pertaining to the following: the completion of the
Acquisition and related matters; the retention of certain Stampede
employees; the impact of the Acquisition and the Vortex transaction
on financial results; the Corporation's intentions with respect to
its 6-rig contract drilling business; the Corporation's intention
to complete the Private Placement and the use of proceeds from the
Private Placement.
This forward-looking information involves material assumptions
and known and unknown risks and uncertainties, certain of which are
beyond the Corporation's control. The Corporation's Annual
Information Form and other documents filed with securities
regulatory authorities (accessible through the SEDAR website
www.sedar.com) describe the risks, the material assumptions and
other factors that could influence actual results and which are
incorporated herein by reference. Actual results, performance or
achievements could differ materially from those expressed in, or
implied by, this forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of
them do so, what benefits the Corporation will derive
therefrom.
The forward-looking information contained herein is provided as
at the date hereof and the Corporation does not undertake any
obligation to update publicly or to revise any of the included
forward-looking information, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE MATRRIX Energy Technologies Inc.