Looking to expand its oil and natural gas field services operations in Western Canada while gaining a foothold in Alaska, Calgary-based Total Energy Services Inc. has agreed to acquire the drilling services, rental and transportation business currently operated by DC Energy Services Inc. for C$44.5 million (US$42 million), the company said Tuesday.

Privately owned DC Energy is active throughout western and northern Canada and Alaska through seven primary locations and several satellite locations, employing about 135 people. The assets to be acquired are complementary to Total Energy’s existing equipment fleet and include approximately 3,600 pieces of rental equipment, 20 heavy trucks and 59 trailers, together with all inventories and other assets (excluding only land and buildings) used in connection with DC Energy’s business. Total Energy said it will offer employment to “substantially all” of DC Energy’s employees.

Through its operating subsidiary, Total Energy currently owns and operates approximately 4,500 pieces of rental equipment, 74 heavy trucks and 131 trailers. As such, the acquisition represents an approximate 80% increase to Total Energy’s rental equipment fleet and a 27% increase to its heavy truck fleet.

Of the purchase price, C$32 million (US$30.2 million) is to be paid in cash at closing, with C$12.5 million (US$11.8 million) to be paid through the issuance of convertible unsecured debentures of Total Energy. The deal is expected to close on Jan. 15 with an effective date of Jan. 1.

When completed, Total Energy said the acquisition is expected to significantly increase its presence in the drilling, completions and production rentals market in Western Canada. The acquisition will add two branch locations (Drayton Valley and Red Deer), increasing the number of branches to 19.

Total Energy and its subsidiaries are involved in two core business sectors. The company’s drilling and completion services segment consists of contract drilling (Chinook Drilling) and the rental and transportation of equipment used in the drilling, completion, and production of oil and gas wells. The production services segment consists of the fabrication, sale, rental and servicing of new and used natural gas compression equipment.

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