By Adriano Marchese
Cathedral Energy Services Ltd. and Precision Drilling Corp. have formed a strategic marketing alliance after Cathedral acquired Precision’s drilling business, the two companies said Friday.
Oilfield-services company Cathedral bought the business for 6.4 million Canadian dollars ($5.1 million), which includes operating assets and personnel of Precision’s directional drilling business.
The purchase price was paid by the issuance of 13.4 million Cathedral shares to Precision, as well as 2 million warrants exercisable at a price of 60 Canadian cents a share.
Precision, a Canadian drilling rig contractor, also agreed to make an additional cash investment of C$3 million to support Cathedral’s growth and expansion.
As part of the agreement, the two companies have entered into a strategic marketing alliance which is expected to produce new U.S. and Canadian customer opportunities for Cathedral, as well as potential integrated service offerings, the companies said.
Precision was granted the right to nominate a member to Cathedral’s board of directors, and has appointed its chief technology officer, Shuja Goraya.
“[The strategic combination] further provides for a strong platform for growth into the future as we harness the combined strength of Precision’s brand, market presence, operational footprint, and Alpha suite of digital technologies with the proprietary technology, focused experience and expertise of Cathedral,” Cathedral President and Chief Executive Officer Tom Connors said.
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View more information: https://www.marketwatch.com/story/cathedral-energy-services-buys-precision-drilling-unit-for-c-6-4m-in-strategic-alliance-271627038943