Essential Energy Services Announces Acquisition Of Coil Tubing

(RTTNews) - Essential Energy Services Ltd. (ESN.TO) said it has entered into a definitive agreement with Precision Drilling Corp. (PD.TO) to sell and purchase certain assets.

Under the Transaction, Essential will sell its service rig business to Precision in a transaction valued at approximately C$28 million. Precision will pay for the Service Rig Business with the transfer of its coil tubing and pumping assets and cash proceeds of C$12 million.

The Transaction is subject to customary terms and conditions, including due diligence, and is scheduled to close on December 16, 2016.

There will be no transfer of employees as the Coil Well Service Assets have been parked since the first quarter of 2016.

Upon completion of the Transaction, the $12 million cash proceeds will be applied to debt, significantly reducing debt outstanding. On December 12, 2016, Essential's debt outstanding, net of cash, was $20 million.