Business
Major Drilling Announces Purchase of African Drilling Operation
Major Drilling Announces Purchase of African Drilling Operation.
About this update from Major Drilling Group International Inc.
[{"type":"text","content":"\n\n\n\nMONCTON, NB, Dec. 1 /CNW Telbec/ - Major Drilling Group International\nInc. (TSX: MDI) is pleased to announce that, through its wholly owned\nsubsidiaries, it has signed agreements to purchase the drilling operations of\nthe Longstaff group in southern Africa. These include the operations of\nRaldril (Pty) Limited in South Africa, RA Longstaff (Botswana) (Pty) Ltd in\nBotswana, and R.A. Longstaff Namibia (Pty) Limited in Namibia.\n\n\nThese businesses operate in regions where Major Drilling does not\ncurrently have a presence. Through this purchase Major Drilling will acquire\n55 conventional drill rigs, together with related support equipment,\ninventory, and contracts. It is anticipated that these assets will give Major\nDrilling the immediate physical capacity to expand further throughout other\nparts of southern Africa, considered to be an area of continuing growth in the\nindustry.\n\n\nIn addition to purchasing the drilling assets, Major Drilling is\nretaining the operations' management teams, as well as the other employees,\nincluding a large number of experienced drillers.\n\n\nThe purchase price for the transaction is US$12.5 million, subject to\ncustomary working capital post closing adjustments.\n\n\n\"We are very pleased to welcome these new operations into the Major\ngroup. Not only does this acquisition provide us with assets, experienced\ndrillers and existing contracts in southern Africa, but it will also\nfacilitate our expansion into other countries in the region,\" said Francis\nMcGuire, President and CEO of Major Drilling Group International Inc. \"The\nformer owners had chosen to operate the majority of this fleet on a single\nshift basis, which will produce revenues for calendar 2006 of approximately \nUS$14 million. It is Major's intention to significantly increase the\nutilization of these rigs over the next two years as we expand the labor\nforce. As such we hope to double current revenues over that time frame.\"\n\n\nThe transaction is expected to close in December, 2006.\n\n\nBased in Moncton, New Brunswick, Major Drilling Group International Inc.\nis one of the world's largest metals and minerals contract drilling service\ncompanies. To support its customers' mining operations and mineral exploration\nactivities, Major Drilling maintains operations in Canada, the United States,\nSouth and Cent...