Calfrac Announces Acquisition of Assets of Mission Well Services, LLC

CALGARY, Sept. 6, 2013 /CNW/ - Calfrac Well Services Ltd. ("Calfrac") (TSX-CFW) and Mission Well Services, LLC ("Mission") are pleased to announce that they have entered into a definitive agreement (the "Agreement") pursuant to which Calfrac has agreed to acquire all of the operating assets of Mission (the "Assets"), a privately-held hydraulic fracturing and coiled tubing services provider focused in the Eagle Ford shale region of Texas (the "Acquisition").  Under the terms of the Agreement, Calfrac's total purchase price will be approximately US$147 million, which includes approximately US$7 million of working capital associated with the ongoing operations of the business.

The Acquisition will preempt a portion of Calfrac's 2014 capital expenditure program, which is expected to include similar equipment. The purchase price is approximately equal to the net book value of the Assets and represents a discount to replacement value. Calfrac will acquire approximately 157,500 of conventional pumping horsepower, along with high-rate blenders, related sand-handling and auxiliary equipment, three deep capacity coiled tubing units with related fluid and nitrogen pumping units and a modern district facility in San Antonio, Texas. 

As part of the Acquisition, Calfrac will gain a foothold in the Texas market with the addition of locations in Houston, San Antonio and Fairfield. Calfrac is assuming certain commitments with key suppliers of Mission and will be offering employment to a significant portion of Mission's employee base in order to continue to serve Mission's customers following the completion of the Acquisition. Calfrac intends to transfer a portion of the Assets to other active operating areas in the United States, and Calfrac's geographic diversification will allow it the flexibility to redeploy other assets as opportunities arise.

Doug Ramsay, Chief Executive Officer of Calfrac, stated "The acquisition of the operating assets of Mission is consistent with Calfrac's strategy of disciplined expansion through attractive acquisitions at good valuation metrics and through organic growth opportunities. Mission provides a platform for Calfrac to enter the Eagle Ford shale region and to assess opportunities in other basins in Texas, while adding high quality fracturing and coiled tubing equipment to other Calfrac operating areas."

Charlie Leykum, Chairman of Mission and Founder of CSL Capital Management, LLC, stated "We think the transaction is an exciting development for our team at Mission and it is the culmination of three years of hard work, from inception as a greenfield development to a thriving, multi-district pressure pumping company. We look forward to introducing Calfrac to our customers and vendors in the Eagle Ford and surrounding markets."

Calfrac will fund the Acquisition through its existing credit facilities which provide ample flexibility to finance the transaction. Maintaining a strong balance sheet remains a core principle of Calfrac, which has enabled it to proactively pursue acquisition opportunities such as Mission.

Subsequent to the Acquisition, Calfrac will have approximately 1,182,500 of conventional pumping horsepower, placing it among the world's largest and most capable fracturing companies.

The Agreement contains customary terms and conditions for a transaction of this nature, including a prohibition upon Mission from participating in any discussion concerning any other similar transaction for the sale of the assets or the business of Mission. The Acquisition is expected to close in early October 2013.

Peters & Co. Limited and RBC Capital Markets are acting as joint financial advisors to Calfrac.

Calfrac's common shares are publicly traded on the Toronto Stock Exchange under the trading symbol "CFW".  Calfrac provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada, the United States, Russia, Mexico, Colombia and Argentina.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities, or a solicitation of proxies, in any jurisdiction, including but not limited to, the United States. The common shares of Calfrac have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws.  The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information concerning completion and timing of the Acquisition; the assessment of Calfrac following the Acquisition including its available pumping horsepower; strategic benefits; value creation; and the deployment of equipment. These forward-looking statements and information are based on certain key expectations and assumptions made by Calfrac. Although Calfrac believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Calfrac cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, component parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive.

There are also risks inherent in the nature of the Acquisition, including failure to realize anticipated synergies or cost savings; risks regarding the integration of the relevant operating assets; and incorrect assessments of the value of such operating assets. This press release also contains forward-looking statements and information concerning the anticipated completion of the Acquisition and the anticipated timing for completion of the Acquisition. Calfrac has included these anticipated times in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to receive regulatory and other third party approvals and the time necessary to satisfy the conditions to closing of the Acquisition. These dates may change for a number of reasons, including the inability to secure necessary regulatory or other third party approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the transaction. As a result of the foregoing, readers should not place undue reliance on the forward-looking statement and information concerning these times.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other risk factors that could affect Calfrac's operations or financial results are included in Calfrac's annual information form and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Calfrac does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE: Calfrac Well Services Ltd.

Douglas R. Ramsay
Chief Executive Officer
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Tom J. Medvedic
Senior Vice President, Corporate Development and Interim Chief Financial Officer
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