Akita Drilling buying U.S.-focused Xtreme Drilling in $209-million deal

CALGARY — Akita Drilling Ltd. is buying U.S.-focused rival Xtreme Drilling Corp. in a $209-million cash-and-shares deal designed to gain greater access to the more active U.S. oil and gas exploration market.

The Calgary-based companies say the resulting medium-sized drilling firm will have a total of 44 rigs in major resource basins in Canada and the United States.

Akita, which has been focused on drilling in Western and Northern Canada, announced in January it would make its initial entry into the U.S. market by moving a rig from Canada to Texas to take advantage of greater demand from oil and gas producers there.

It now has two of its 28 rigs in the U.S. All 16 of Xtreme’s rigs are working south of the border.

Xtreme shareholders are to receive 0.29 of an Akita non-voting share and 59 cents in cash for each share tendered, representing what Akita says is a 32 per cent premium over the 20-day volume weighted average price. Akita has agreed to assume $10 million of Xtreme’s debt.

Akita says the deal will provide greater financial capacity to build new drilling rigs. It says it expects to find $8 million per year in cost savings through synergies from the merger.

“The transaction is a continuation of Akita’s strategy of capitalizing on the improving fundamentals in the U.S. land drilling market,” Akita CEO Karl Ruud said.

The transaction is expected to be completed in the third quarter of 2018 and will require approval by a two-thirds majority vote by Xtreme’s shareholders.

Just Posted

RDC cancels championship-winning golf program due to tight finances

Short season, small number of student golfers were also considerations

Fire investigators comb through industrial fire wreckage looking for answers

Industrial building in north Red Deer was completely gutted in Wednesday morning fire

Time for a central Albertan in cabinet, says chamber of commerce

Central Alberta had no cabinet ministers in last government

Trump Russia probe finally delivers some answers

WASHINGTON — After nearly two years of waiting, America is getting some… Continue reading

WATCH video of Innisfail resident creating the world’s biggest caricature

Watch as Innisfail resident Dean Foster creates the world’s biggest caricature of… Continue reading

Notre Dame rector: “Computer glitch” possible fire culprit

PARIS — A “computer glitch” may have been behind the fast-spreading fire… Continue reading

Austria fears for three top climbers missing in Banff National Park

BERLIN — Austrian Chancellor Sebastian Kurz said Friday his thoughts are with… Continue reading

All eyes on the surging Greens as Prince Edward Island goes to the polls

After a brief provincial election campaign devoid of drama, voters on Prince… Continue reading

Lower price discounts to boost Q1 oil profits but uncertainty hangs over sector

CALGARY — Lower discounts on western Canadian oil prices have swollen producer… Continue reading

Local Sports: Hard training pays off for Red Deer runner Jared Howse

Jared Howse understands success doesn’t come easily. The 17-year-old has put together… Continue reading

CRA’s automatic benefit registrations give retirees reason to file on time

TORONTO — This is the time of year when procrastinators begin to… Continue reading

Study: Genetic test predicts middle-aged obesity risk

NEW YORK — Can a genetic test identify newborns at risk of… Continue reading

Downtown Red Deer Co-op Plaza Food store closing

Central Alberta Co-op is closing its downtown Red Deer Plaza food store… Continue reading

Most Read