Production Enhancement Group has announced the funding of its 40% of the initial capital contribution for the joint venture with Al Qahtani Marine & Oilfield Services Co. of Saudi Arabia ("Al Qahtani"). This joint venture will exploit PEG's technology and expertise on an exclusive basis in the Middle East, beginning in Saudi Arabia with future expansion opportunities throughout the region.
In the April 18, 2008 press release, the Company announced that concurrent with the successful completion of the acquisition by Quest Energy Services (Canada) Ltd. ("Quest"), an indirect wholly owned subsidiary of Al Qahtani, the Company would reinstate the Joint Venture and the WISE™ technology license agreements.
The Joint Venture Agreement establishes a Saudi company to be named Abdul Hadi Al Qahtani WISE Co. Ltd. (the "JV Company"). It will carry out the joint venture business and the production and delivery by PEG of mobile WISE™ units to service both offshore and onshore facilities. It also grants to the JV Company an exclusive paid up license for the use of the WISE™ technology by the JV Company for the duration and purposes of the joint venture.
The Joint Venture Agreement provides for the exclusive marketing and sale of WWIS's patented coil tubing technology in the Middle East with an initial qualification, marketing and sales effort directly focused on Saudi Aramco, the Saudi national oil firm. The joint venture is owned 60% by Al Qahtani and 40% by WWIS.
"This important first step in funding the joint venture accelerates the Company's international expansion plans," said Joseph P. Lahey, CEO of PEG. "Al Qahtani's commitment to being a market leader, combined with its strategy to accelerate PEG's technology into the Middle East, fits well with PEG's existing domestic and international expansion goals and will, we believe, provide expanded opportunities for our services and employees. The joint venture will enable both PEG and Al Qahtani to take immediate advantage of the tremendous opportunities available in the world markets requiring new technology in coil tubing equipment and needing one stop well intervention service companies to meet the growing development of international well intervention."
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