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CALGARY, AB, May 5, 2025 /CNW/ - STAMPEDE DRILLING INC. ("Stampede", or the "Corporation") (TSXV: SDI) is pleased to announce that it has entered into a drilling equipment purchase agreement (the "Agreement") with a private company (the "Purchaser") providing for the sale (the "Transaction") of certain drilling components (the "Equipment") from an A/C triple drilling rig (the "Triple") previously acquired by Stampede in August, 2022. Total consideration to be paid is $5 million in cash, plus the transfer to Stampede of certain drilling equipment valued at approximately $290,000 (collectively, the "Purchase Price").
Stampede Drilling Inc. Logo (CNW Group/Stampede Drilling Inc.)
Stampede has retained key components of the Triple for future sale or internal deployment to minimize future capital expenditures.
Lyle Whitmarsh, President and Chief Executive Officer of Stampede, commented: "In today's market conditions, this is a very positive transaction for Stampede and will substantially increase free cash flow. Cash on hand provides us with optionality such as upgrading equipment, paying down debt or continuing purchases under our normal course issuer bid. This is a proactive shift to monetize components of the Triple without incurring significant capital expenditures, which improves our overall return on investment on the August, 2022 transaction compared with entering into take-or-pay contracts for the Triple which, based on current industry conditions, are unlikely to be on terms which meet our financial objectives."
The Agreement contains customary covenants, representations and warranties of and from each of the Purchaser and the Corporation, and various conditions precedent, including that each party obtain all necessary consents from its lenders and other secured parties, and that the Purchaser successfully completes a debt financing with its bank to enable it to pay the cash portion of the Purchase Price. Unless all such conditions are satisfied or waived by the party for whose benefit such conditions exist, the Transaction will not proceed. In connection with the Transaction, Stampede and the Purchaser have also agreed to indemnify one another in certain circumstances.
The Agreement may be terminated prior to the closing of the Transaction in certain circumstances, including by either the Corporation or the Purchaser if the Transaction is not consummated on or before November 30, 2025. If the Agreement is terminated, the Corporation will be entitled to retain, at no cost to it, any upgrades or other improvements that the Purchaser makes to the Equipment prior to the date of termination.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this News Release constitute forward-looking statements or forward-looking information (collectively, "forward-looking information"). Forward-looking information relates to future events or the Corporation's future performance. All information other than statements of historical fact is forward-looking information. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "could", "should", "believe", "predict", and "forecast" are intended to identify forward-looking information.
This News Release contains forward-looking information pertaining to, among other things: the Transaction, including the terms thereof; the expected closing date and the anticipated benefits to the Corporation; and the expected sources of funding for the Transaction, among others.
Forward-looking information is based on certain assumptions that the Corporation has made in respect thereof as at the date of this News Release regarding, among other things: the ability of Stampede and the Purchaser to satisfy the conditions to closing of the Transaction in a timely manner and substantially on the terms thereof; the Purchaser's ability to successfully complete its bank financing; and that there are no unforeseen events preventing the performance of the Agreement and matters ancillary thereto.
While Stampede believes the expectations and material factors and assumptions reflected in the forward-looking information are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. Forward-looking information is not a guarantee of future performance and actual results or events could differ materially from the expectations of the Corporation expressed in or implied by such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information is subject to a number of known and unknown risks and uncertainties including, but not limited to: the condition of the global economy, including international tariffs, trade, inflation, the ongoing conflict in Ukraine and other geopolitical risks; the condition of the crude oil and natural gas industry and related commodity prices; other commodity prices and the potential impact on the Corporation and the industry in which the Corporation operates, including levels of exploration and development activities; the ability of Stampede and the Purchaser to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and certain other risks and uncertainties.
This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause actual results to differ materially from those predicted, forecasted, or projected. Statements, including forward-looking information, are made as of the date of this News Release and the Corporation does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The forward-looking information contained in this News Release is expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
