Central Alberta Well Services Expands Service Rig Fleet
Central Alberta Well Services has taken possession of the first of eight new service rigs that are being manufactured for the Company in Calgary, Alberta. The new rig will be deployed from the Company's Red Deer operating facility to meet customer demand for work-over and completions of oil wells predominantly in the Central region of Alberta. The remainder of the service rigs being fabricated will be deployed from the Company's operating facilities in Red Deer, Provost and Grande Prairie in the fourth quarter to meet current customer demands and to expand the Company's operations in northern Alberta and the Peace River Arch. The final rig to be deployed is the first slant rig designed by the Company and will be stationed out of the Company's Provost operating center. All eight rigs are expected to be deployed before the end of 2007 and fully operational in the first quarter of 2008.
Darryl Wilson, President and CEO, stated, "We are pleased to see that the new rigs are being delivered at an opportune time for the Company. Our 1,500 meter rigs have been very active throughout the second and third quarters of 2007. These rigs predominantly work for the Company's clients on oil production projects in Central and Eastern, Alberta. With oil prices at current levels, the utilization rates for service rigs are forecast to remain strong over the next six months. With the addition of our eight new service rigs, the Company will exit the year with a fleet of eighteen 1,500 meter rigs, bringing our total service rig fleet to twenty-nine units."
The Company also announces that it has received approval from the TSX Venture Exchange for the cancellation of all previously issued options in order to re-issue options to employees and management. Options are a key component of the Company's benefit and compensation program, which is designed to attract and retain key employees. Prior to the cancellation and after the consolidation of the Company's shares, options issued by the Company had an average exercise price of $6.36 per option. The Company continues to believe that the current trading price of the Company's Class A Shares is understated and with this in mind and to create an alignment of interest between employees and shareholders, the new options being issued were priced at $2.40 per option, a 23% premium to the closing price of $1.95 the day prior to the issuance of the options. The Company issued 1,470,375 options of 2,267,193 available options at an exercise price of $2.40 to officers, senior management, employees and directors. The options have vesting provisions over three years and will expire five years from the date of issue.
The Company also announces that it has purchased 44,100 Class A Shares of the Company at an average price of $1.82 per share through the Company's previously announced normal course issuer bid program.
- CWC Snags Service Rig Division's Assets, Personnel (Jul 03)
- Acquisition of Wellco Service Rig Division Complete (Jan 09)
- Central Alberta Well Services Expands Service Rig Fleet (Oct 02)