Strad Energy Divests Production Services Division To Group Led By Employees

Acquired production services division providing mechanical services, electrical and instrumentation services, & packaging services for oil & gas industry.

Strad Energy Services Ltd., Calgary, (Toronto: SDY) has closed the sale of its production services division to buyers led by employees of the company for C$17.4 million in cash, notes and assumed debt.

The deal includes C$13.1 million in cash, C$3 million in promissory notes and C$1.3 million in the assumption of long-term debt. The sale was comprised of two separate transactions.

The production services division provides mechanical services, electrical and instrumentation services, and packaging services for the oil and gas industry.

Strad president Andy Pernal says, “With the sale, Strad's employee count will be reduced by 270 people and operations will be streamlined. Demand for Strad drilling solutions in both Canada and the U.S. continues to be very robust, particularly from large oil and gas producers. We are also pleased that the sale was made to employees of the company who have worked hard over the past years to build a very solid operation, particularly given the division's exposure to natural gas commodity prices.”

Strad will use the proceeds to support the company's $72-million capex program previously announced for 2012.

Raymond James Ltd. was financial advisor to Strad.