CALGARY (CP) -- justify>The Peak Energy Services Trust has acquired Competition Wireline Services Ltd. for up to C$38.5 million and raised its distributions to unitholders.
The Calgary oil and gas services company [TSX:PES.UN] said late Sunday it had acquired Competition Wireline for C$32.5 million in cash and units plus a maximum earn-out payment of C$6 million payable in a year.
The deal is slated to close at the end of the month and will be financed by C$26 million in cash and issuing C$6.5 million Peak trust units, Peak said.
''Competition represents an excellent opportunity for Peak to further diversify its operations by adding a significant new product offering to its production services segment,'' the energy services operator said in a statement.
''In addition to adding a significant immediate cash flow stream to the trust, this acquisition enables Peak to execute on its longer term plans to balance out its drilling and production services segments on a revenue basis as it is projected to bring this ratio into the 55-45 per cent range in favour of drilling services compared to the current ratio of 75-25 per cent.''
Competition, formed in 1997 by its current owners, is based in Fox Creek, Alta. and has about 80 employees. The small company provides services to oil and natural gas producers to help maintain and optimize production from existing oil and natural gas wells in Alberta and British Columbia.
For 2004, Competition generated revenue of C$20.7 million.
In another development Sunday, Peak said the deal will give the trust significant additional cash flow, enabling it to raise monthly distributions to unitholders to C8.5 cents a unit from eight cents.
Peak Energy is a diversified energy services trust providing oilfield equipment and related services to the energy industry in western Canada.
(c) The Canadian Press 2005