Central Alberta Well Services Corp. (TSXV: CWC), which maintains its operational headquarters in Red Deer, has bulked up its operations with a major purchase from Trinidad Drilling Ltd. (TSX: TDG).
Trinidad announced on Thursday that it has agreed to sell its well-servicing rigs and related equipment to Central Alberta Well Services for $38 million in cash.
The company said in a release that the deal involves 22 service rigs and is expected to close on June 15.
Lyle Whitmarsh, Trinidad’s president and CEO, said the sale reflects his company’s increasing focus on the drilling side of its operations. It has more than 120 drilling rigs across North America.
“As well servicing has become a less significant part of our overall business, we needed to invest capital to grow this division or to narrow our focus more tightly towards contract drilling,” said Whitmarsh.
“Our decision to sell our well-servicing assets reflects our strategy to focus on the deep, modern contract drilling market where returns are generally stronger and where we see opportunities for future growth.”
Central Alberta Well Services provides a range of oilfield services, including the provision of service rigs, coil tubing, snubbing, nitrogen and well testing.
Its corporate office is in Calgary, and it has operational offices across Alberta and in Saskatchewan.
In trading on the TSX Venture Exchange on Thursday, shares in Central Alberta Well Services closed at 60 cents, up five cents.