By March 9, 2017 Read More →

Calgary-based Western Energy Services acquiring Savanna Energy


Western Energy to acquire Savanna Energy

Western is highly experienced in operating a large scale contract drilling and well servicing company

Western Energy Services Corp. is acquiring fellow Alberta services firm Savanna Energy Services Corp.on the basis of 0.85 of a common share of Western for each outstanding Savanna share, the companies announced Wednesday.

“This transaction, which has received the unanimous support of the special committee and the Savanna board, provides a compelling opportunity for Savanna and its shareholders. It creates a larger and more competitive company that remains centred on contract drilling and well servicing while offering enhanced exposure to the North American oil and gas industry recovery,” said Chris Strong, president and CEO for Savanna, in a press release.

“The combined company will own the second largest contract drilling fleet and well servicing fleet in Canada. Along with the combined company’s US operations and Savanna’s continuing operations in Australia, this is a broad platform from which to grow operations to meet customer demand.”

The consideration reflects a value of $2.30 per Savanna Share based on the volume weighted average trading price of Western Shares on the Toronto Stock Exchange  for the ten day period ended March 8, 2017 of $2.71, which represents a 14.5 per cent premium over Savanna’s volume weighted average trading price on the TSX for the same period of $2.01.

“We reached this agreement following a comprehensive process to review all available strategic alternatives for Savanna to maximize value for our shareholders. The Arrangement delivers a higher premium and much larger ownership for Savanna shareholders in the ongoing company than Total’s unsolicited offer. Equally as important, the combination represents true consolidation in drilling and well servicing in both companies’ core Canadian market with customer bases that largely complement rather than overlap each other, which is expected to provide certain benefits of consolidation within these sectors,” said Strong.

The board of directors of Savanna is recommending that its shareholders vote in favour of the deal at a meeting to be held in May 2017, in order to benefit from the value and opportunity of the pure play combination with Western.

The Savanna Board also recommends that shareholders reject, and not deposit their Savanna Shares to, the Total Offer. Any shares deposited to the Total Offer can be withdrawn by contacting D.F. King, the Information Agent retained by Savanna.


The Arrangement is expected to provide holders of Savanna Shares with the opportunity to own a material stake in a larger drilling company with:

  • The second largest contract drilling and second largest well servicing fleet in Canada;
  • A broader, more diverse, domestic and international drilling platform from which to grow operations to meet customer demand;
  • An expanded customer base with greater geographic exposure within key operating areas throughout North America and a leading position in the Australian onshore drilling and well servicing market;
  • Increased ability to strategically move equipment to meet customer demand and capture growth opportunities;
  • A stronger organization after integrating talent at the board, senior management and employee levels;
  • Significant operational synergies and efficiencies through combining operational facilities and reduced corporate and professional fees; and
  • Potentially enhanced shareholder liquidity, with reduced cost of capital and future access to capital to fund future growth and acquisition opportunities.

Ph: 432-978-5096 Website:

The Savanna Board considered a number of factors in recommending the Arrangement including:

  • The premium offered pursuant to the Arrangement;
  • The Arrangement is a better strategic opportunity, providing Savanna shareholders with the opportunity to own a material stake in a stronger company that remains focused on drilling and well servicing;
  • The Arrangement provides Savanna shareholders with enhanced exposure to a recovery in industry activity levels;
  • Western is highly experienced in operating a large scale contract drilling and well servicing company;
  • The Arrangement is the result of an active and thorough strategic alternatives process conducted by Savanna to maximize value for all of its shareholders;
  • Peters & Co. Limited and Cormark Securities Inc. have each provided fairness opinions in respect of the Arrangement;
  • There is less risk to completing the Arrangement as compared to the Total Offer;
  • The Arrangement requires Court approval and shareholders of Savanna will be granted rights of dissent;
  • Savanna’s directors and officers and certain other shareholders have agreed to vote in favour of the Arrangement; and
  • The Savanna Board has preserved the ability to respond to unsolicited superior proposals.

Posted in: Canada

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