Revenue of the four rigs for the most recent 12 month period is approximately $12.0 million and the earnings before interest, tax, depreciation and amortization (EBITDA) are calculated at approximately $3.6 million. All of the rigs are currently contracted and fully crewed.
The purchase price of $12.63 million, which is equivalent to 3.5 times trailing EBITDA, will be paid by the issuance of 392,157 common shares of Western Lakota Energy Services Inc. at a deemed issue price of $6.63 per share and $10.03 million in cash. The cash portion of the purchase price is expected to be paid from a new bank credit facility and with $6.03 million from cash generated from operations.
"Customer demand for our business model of Aboriginal involvement and quality operations will provide potential for substantial growth in the surface casing and core drilling sector of the industry," said Elson McDougald, President and Chief Executive Officer of Western Lakota. "This acquisition puts Western Lakota in a unique position to take advantage of this growth opportunity with current and new Aboriginal partners."
One of Canada's fastest-growing drilling contractors, Western Lakota currently operates 22 rigs and, in addition to the four rigs in this acquisition, plans to build 8 more rigs by the end of 2005. Western Lakota continues to provide one of the newest fleets of safe and efficient drilling rigs in Canada while delivering strong results for shareholders, customers and Aboriginal partners.
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