Cathedral Energy has entered into a definitive Purchase and Sale Agreement to sell its U.S. based electric wireline business to Pure Energy Services in exchange for the operating assets of Pure's Motorworks division and approximately $2.1 million cash (subject to certain pre and post closing price adjustments). The Motorworks division includes 58 drilling motors, 23 drilling jars, spare mud motor power sections and shop equipment valued at $5 million. The assets of the Motorworks operations will be utilized in Cathedral's current directional drilling business. This transaction is expected to close on or about April 20, 2010 and is subject to customary closing conditions.
In addition, Cathedral announces the closure of its slickline operations in Canada effective March 31, 2010. The related operating assets will be sold and capital deployed into our core areas of business.
Upon closing of the sale of the U.S. wireline business, Cathedral will have exited the wireline business which Cathedral's management has determined not to be a core business. For Cathedral, exiting the wireline business will result in a more focused oilfield services entity with significant balance sheet strength to capitalize on present and future oilfield service opportunities in our selected service lines.
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