2011-03-09-2011-03-04

To acquire the drilling fluids and engineering services unit with operations in Australia, New Zealand and India.

Newpark Resources Inc., The Woodlands, Texas, (NYSE: NR) plans to acquire the drilling fluids and engineering services unit of Australia-based Rheochem Plc for approximately A$23.8 million (approximately US$24 million).

Rheochem provides drilling fluids and engineering services to the oil and gas exploration and geothermal industries with operations in Australia, New Zealand and India.

In the most recently completed fiscal year ended June 30, 2010, Rheochem's drilling fluid services segment generated revenues of A$20.3 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of A$3.6 million. For the year ended June 30, 2009, revenues were A$34.2 million and EBITDA was A$6.1 million. Fiscal first half results for the six months ended Dec. 31, 2010, were negatively affected by severe weather in Australia. Unaudited revenues and EBITDA of the drilling fluids segment for this six month period, as reported by Rheochem, were A$10.2 million and A$1.1 million, respectively.

Additional consideration may be payable based on financial results of the acquired business over a one-year earnout period, up to a maximum total consideration of A$45 million. Newpark expects to fund the acquisition price, including any earnout payment, with cash on hand.

"This acquisition is consistent with our strategic plan to expand our drilling fluids business globally, providing us with a footprint in the growing Asia Pacific markets," says Paul Howes, Newpark president and chief executive. "We are also acquiring the Rheochem brand name, which is recognized in the Far East, and we will continue to operate under that name."

The deal is expected to close in the second quarter of 2011.