MATRRIX to acquire Stampede Drilling from SaskWorks

Photo of author

By Ted Liu

MATRRIX Energy Technologies Inc. (TSX-V: MXX) has agreed to acquire all of the issued and outstanding shares of Stampede Drilling Ltd., a portfolio company of SaskWorks Venture Fund Inc.

SaskWorks Venture Fund currently holds 20.77% of Class “A” common shares at a cost of $3.74 million.

Under the terms of a pre-acquisition agreement, MATRRIX has agreed to make an offer to acquire all of Stampede’s outstanding Class “A” common shares and Class “B” common shares for total consideration of approximately $7 million, plus the assumption of debt of approximately $2 million, consisting of the issuance of common shares of MATRRIX for a total purchase price of approximately $9 million. Holders of Stampede shares will receive 1.25448 MATRRIX shares for each Class A share and 1.25448 MATRRIX shares for each Class B share.

Founded in 2011 Estevan, Saskatchewan based Stampede Drilling Ltd is a private corporation which owns 3 heavy telescopic double drilling rigs in the Weyburn/Estevan area of southeast Saskatchewan. The management team and field staff are local residents of the Weyburn/Estevan area and have over 60 years of drilling experience in the southeast Saskatchewan oil and gas services industry.

MATRRIX will acquire 3 fully crewed, modern, heavy telescopic double rigs currently enjoying profitability and high utilization. It is expected that key employees and management of Stampede will be retained and continue with MATRRIX, forming a strong operational nucleus for its southeast Saskatchewan contract drilling business.

With the previously announced acquisition of 3 drilling rigs from Vortex Drilling Ltd., MATRRIX enters the contract drilling business with 6 modern telescopic double drilling rigs, all manufactured since 2011, with proven mind and management in place. With favorable acquisition costs for the Stampede rig business and the 3 drilling rigs from Vortex, MATRRIX believes the transactions will add meaningfully to financial results and its base of horizontal and directional drilling services and technology in the Western Canadian Sedimentary Basin (WCSB).

MATTRIX intends to operate its 6-rig southeast Saskatchewan contract drilling business under the Stampede Drilling banner, leveraging from the excellent reputation of management and field crews associated with Stampede in the region.

MATRRIX President and CEO Richard Ryan stated; “Since announcing our intended entry into the contract drilling business in March of this year, we’ve been fortunate to attract very high quality drilling rig talent to our organization, beginning with the return of Elson McDougald to our board of directors in August. With Lyle Whitmarsh as our rig division president, and now Jackie White and Bill Devins of Stampede Drilling, I couldn’t be more pleased with our positioning as a solid new entrant to the drilling rig industry in the WCSB.”

Lightyear Capital Inc. acted as financial advisor to MATRRIX on the acquisition.

Concurrent with the acquisition of Stampede, MATRRIX has engaged Lightyear as its agent to complete a private placement of MATRRIX shares on a best efforts basis at $0.31 per share for gross proceeds of approximately $7 million.The proceeds of the Private Placement will be used to for repayment of debt, capital expansion and working capital.

photo credit: Stampede Drilling