Feb 15 2011
Colorado-based Connors Drilling and sister company, Sanderson Drilling of Western Australia, today announced they have purchased the assets of the Surface Diamond Division of Swick Mining Services (ASX: symbol SWK) of Australia.
The acquisition of assets, including equipment, trained operations staff and existing drilling contracts in Australia, will provide added resources to help both companies meet increased demand for exploration drilling services. The transaction closed last Friday, Feb. 11, in Perth, Australia. The total transaction value is $17 million.
"The mining and mineral industry is experiencing record demand for exploration drilling services and Sanderson and Connors view this acquisition as a prime opportunity to continue our growth," said Steve Swallow, managing director, Sanderson Drilling. "This acquisition supports our need for additional resources while maintaining our commitment to lead the industry in safety excellence, productivity, innovation, value and professionalism."
Sanderson Drilling and Connors Drilling, both wholly owned subsidiaries of Tarn Drilling Company, are leading drilling contractors within their respective markets through exemplary safety records, quality of work and organic growth strategies. This acquisition infuses additional new or nearly new equipment and operational expertise to support continued growth while maintaining stringent safety and operational specifications for the growing client bases of both companies.
"Completion of this acquisition furthers our vision of becoming a leading provider of drilling solutions in key markets across the globe," explained Kyle Rhoderick, president of Connors Drilling and CEO of Tarn Drilling Company. "This acquisition of assets, employees and booked business represents the single largest bite of organic growth the organization has undertaken to date. It affords us the unique opportunity to immediately begin operating on existing contracts in Australia and, in the U.S., immediately take on additional incremental projects and generate revenues in the current year versus the alternative of ordering new gear and facing long lead times from capital equipment suppliers."
Included in the assets are four KWL 1600 multipurpose drill rigs, compressor/booster packages for surface reverse circulation drilling, five LF-90D crawler mounted drills, associated support equipment (trucks and spare parts), the existing complement of employees that operate and support the KWL 1600 rigs, and existing contracts in Australia where the KWL 1600 rigs are currently operating. All of the LF-90D crawler rigs will be allocated to Connors Drilling for work in North America where the more compact, crawler style drills are favored for low ground pressure access to drill locations in sensitive environments.
Through the acquisition, Sanderson will immediately assume the revenue from the ongoing contracts formerly held by Swick, including work with Barrick Gold. It also provides highly skilled crews that are experts in the field and safety conscious – the backbone of success for both Sanderson Drilling and Connors Drilling. The added fleet size at Sanderson Drilling will allow the company to support additional exclusive drilling contracts in Australia with large mining companies.