Allis-Chalmers Energy to Acquire Specialty Rental Tools

Allis-Chalmers Energy reports that it has entered into a definitive sales/purchase agreement to acquire Specialty Rental Tools, Inc. (Specialty), based in Lafayette, Louisiana for approximately $90.0 million in cash, subject to satisfactory financing. Allis-Chalmers will additionally pay Specialty's tax liability of approximately $6.0 million associated with Specialty's execution of a Section 338 (h)10 election, which will result in long-term tax benefits to Allis-Chalmers. The acquisition of Specialty is expected to close in January 2006.