CanElson Drilling Adds CanGas To Its Holdings

Bought company that provides containerized natural gas transport services in AB &SK used to capture & monetize raw natural gas.

CanElson Drilling Inc., Calgary, (Toronto: CDI) has closed the acquisition of privately held, Calgary-based CanGas Solutions Ltd. for approximately C$9.85 million in stock.

CanElson issued 2.05 million common shares for 100% of the shares of CanGas. CanElson shares were trading at C$4.80 at press time.

CanGas provides containerized natural gas transport services in Alberta and Saskatchewan. These services are used to capture and monetize raw natural gas that is being flared at oil wells not tied into gathering systems, and to transport processed natural gas for use as a fuel to displace diesel.

CanGas Solutions Inc., as the newly amalgamated company, is now a subsidiary of CanElson.

CanElson chief executive and president Randy Hawkings says, “The addition of the experienced CanGas team provides greater experience and industry knowledge to our in-house natural gas bi-fuel team and should allow us to further accelerate, as well as efficiently manage the compression and transport supply chain, within our existing initiatives in the areas of natural gas transport, flare gas conservation and bi-fuel conversions. CanGas is currently transporting raw natural gas from multiple wells enabling the production of oil that might otherwise be shut in. CanGas was also CanElson's technical partner in bi-fuel trials on mechanical rigs last summer, and they additionally supply technical expertise to a large-scale containerized natural gas transport project in Atlantic Canada.”

CanElson now expects to invest approximately $19 million of additional capital expenditures into CanGas to grow its natural gas transport and bi-fuel capabilities. The investment is expected to be focused on a combination of the purchase of additional equipment for rich gas transport and bi-fuel related equipment for the conversion of oilfield services equipment.