New Technology Magazine

CES Acquires Permian Drilling Fluids Company Venture Mud One

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 U.S. operations of CES' wholly owned subsidiary AES Drilling Fluids, LLC. Established in 1996, Venture Mud is a West Texas based private drilling fluids company that provides drilling fluid solutions for a number of leading oil and natural gas companies with a focus on the Permian Basin."We are acquiring an established Permian based drilling fluids company, with experienced management, great customers and excellent drilling fluids sales, technical and field personnel," said Tom Simons, president and CEO of CES. "We have been looking for an opportunity to grow our presence in the Permian which is the most active basin being drilled in North America with over 460 drilling rigs operating. We see many opportunities and synergies as we combine Venture Mud with our AES operations. We also see the Permian Basin as a growth area for our JACAM offerings." "We are excited to be joining CES, the leading independent drilling fluids company in North America," said Mike Gilbert, president of Venture Mud. "The combination of our team, our customer relationships and our expertise, together with AES' oil-based mud and horizontal drilling expertise will be a powerful partnership for growth."

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 U.S. market and provides a platform for growth in the Permian Basin. The Permian is the most active drilling market in the U.S. with approximately 460 operating drilling rigs. In addition the Permian continues to transition more activity towards horizontal drilling which increases the complexity of drilling operations and increases the requirement for advanced drilling fluid solutions.

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.
Bookmark and Share

techguide banner 080113-3

You are here: Home Daily News Drilling CES Acquires Permian Drilling Fluids Company Venture Mud One

Daily Oil Bulletin | JuneWarren-Nickle's Energy Group

Daily Oil Bulletin | JuneWarren-Nickle's Energy Group