2010-07-13-2010-07-13

To acquire high-pressure valve manufacturer with year-end 2009 revenues of $18.5 million.

Houston-based oilfield services company Allis-Chalmers Energy Inc. (NYSE: ALY) plans to acquire Conroe, Texas-based American Well Control Inc. for approximately $17.2 million in cash and 1 million shares of Allis-Chalmers common stock.

American Well Control provides services for and manufactures premium high-pressure valves used in hydraulic fracturing in unconventional gas shale plays. For year-end 2009, American Well Control generated revenues of approximately $18.5 million and estimated EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $4.1 million. As of May 31, revenues were $9.5 million and unaudited EBITDA was $2.9 million.

Allis-Chalmers chairman and chief executive Micki Hidayatallah says, "We believe American Well Control has the best frac valve product in the market. American Well Control has built a reputation for a quality product with superior service to its customers. With an existing strong position for the frac valve product in the Haynesville shale, American Well Control intends to increase its presence in the Marcellus, Eagle Ford and Bakken shale markets by establishing service and repair facilities side by side with Allis-Chalmers' existing locations. The acquisition of American Well Control increases Allis-Chalmers' presence in the active, onshore, nonconventional gas markets."

Hidayatallah also welcomed the addition of Richard Mitchell and Mark Albert as part of the company's management team.

Allis-Chalmers provides oilfield drilling services and equipment to domestic oil and gas E&Ps primarily in Texas, Louisiana, New Mexico, Oklahoma, Arkansas and offshore in the Gulf of Mexico. Additionally, the company has international services in Argentina, Brazil and Mexico.