Petrolia Drilling Acquires Independent Oil Tools

Petrolia Drilling

Petrolia Shashin AS, a wholly owned subsidiary of Petrolia Drilling ASA has signed an agreement to acquire Independent Oil Tools AS, a subsidiary of IOT Holding ASA.

Independent is an international offshore equipment rental and oilfield service company with facilities / presence in Norway, Australia / New Zeeland, Singapore and Dubai, serving nearby offshore clients. Independent's main product categories include tubing, drill pipe, casing and handling equipment.

Independent is expected to generate 2006 revenues of approximately MNOK 185, EBITDA of approximately MNOK 110 and EBIT of MNOK 57 (un-audited NGAAP figures).

PDR will pay a consideration of MNOK 380.0 for Independent. In addition, Independent has net debt obligations, primarily leasing debt, of approximately MNOK 57 (as per 31 October 2006). The consideration of MNOK 380.0 is payable in cash upon closing of the acquisition, which is expected to take place before 31 December 2006. The acquisition will be financed through existing cash and available credit facilities.

The acquisition is subject to approval by the general meeting of the owner of Independent, IOT Holding ASA, and satisfactory due diligence by PDR.

The acquisition will expand the activities of PDR into an exiting and growing oilfield service niche, and generate profitable cash flow. Independent is currently experiencing strong demand in all operating regions. PDR is hopeful that the strategic expansion into equipment rental will enable PDR to generate a somewhat more stable cash flow over time.