CES Acquires Permian Drilling Fluids Company Venture Mud One
- Category: Drilling
- Published on 2013-07-19
CALGARY, Alta. -- Canadian Energy Services & Technology Corp. (CES) has announced it has acquired the drilling fluids business assets of Venture Mud One, L.P. and certain additional assets from affiliates of Venture Mud including VM Transports, LLC, Venture Services, LLC and Venture Services RM, LLC.
The total purchase price is approximately US$55.2 million which includes US$18 million of deferred consideration subject to earn-out criteria and the issuance of approximately US$12.7 million in common shares of CES to Venture Mud.
Venture Mud will expand the
The acquisition is expected to strengthen CES' position as the leading independent North American drilling fluids provider. The acquisition expands the scale and operational capabilities of CES within the
Venture Mud will be able to capitalize on AES' expertise, its advanced products, and AES' logistics and procurement capabilities. In addition, once AES' barite grinding facility is completed, which is expected by the end of 2013, Venture Mud will have access to a primary source of API quality barite.
At closing Venture Mud was providing drilling fluids products and services to thirty-eight active drilling rigs.
CES will add Venture Mud's key field, technical and sales focused drilling fluids employees, expanding CES' capabilities to effectively reach and service customers in the US .
Post acquisition CES will leverage the Venture Mud platform to sell and distribute JACAM's suite of production and specialty chemicals in the Permian.
Management of CES expects the Acquisition to be accretive to CES' cash flow; EBITDA; and net income.
CES' business is focused on the design and delivery of technically advanced fluids for the North American oil and gas industry. CES' business model requires limited re-investment capital to grow. As a result, CES has been able to capitalize on the growing market demand for drilling and production fluids in North America while generating free cash flow.
Venture Mud is headquartered in Midland , Texas , and is a leading independent full-service drilling fluids company in the Permian Basin . The Permian Basin is situated in the western portion of Texas and in southwest New Mexico . It is one of the largest structural oil and gas basins in the U.S. and is geologically complex and encompasses many different producing formations within several sub-basins. Venture Mud was established in 1996 and provides drilling fluid solutions for a number of leading oil, natural gas and unconventional natural gas developers.