Completion of disposal of Gib

RNS Number : 0975K

Hunting PLC

15 December 2008

 



For immediate release

15 December 2008

Hunting PLC

('Hunting' or 'the Company')

Completion of disposal of Gibson Energy

Hunting PLC (LSE:HTG), the international energy services company, is pleased to announce the completion ('Completion') on 12 December 2008 of the disposal of Gibson Energy Holdings Inc. ('Gibson') to Gibson Acquisition ULC (formerly named 1413281 Alberta ULC), ('the Purchaser') a company ultimately owned by the Riverstone/Carlyle Global Energy and Power Fund, an energy focused private equity fund managed by Riverstone Holdings LLC.

The total consideration for Gibson is CAN$1,258 million (approximately £617 million) of which CAN$1,158 million (approximately £568 million) was paid in cash on Completion. Under the original terms of the transaction as announced to shareholders on 6 August 2008, the total consideration was payable in cash on Completion. To assist the Purchaser with its financing, Hunting has agreed to defer payment of CAN$100 million (approximately £49 million) of the consideration through the receipt of a warrant (the 'Warrant') entitling Hunting to CAN$100 million Preferred Equity Shares ('Preferred Equity') in the parent company of the Purchaser on exercise of the Warrant. The Preferred Equity will carry an annual dividend which is cumulative and compounding at a rate of 12%. After two years the Preferred Equity automatically converts into a separate class of common shares. The value of the common shares will equal CAN$100 million plus the amount of any accrued but unpaid dividends on the Preferred Equity at the date of conversion. The Purchaser (or an affiliate of the Purchaser) may purchase the Warrant from Hunting for cash plus a sum equal to any cumulative dividends on the Preferred Equity from the date that the Warrant has been issued.

The total consideration for Gibson is subject to a deduction for estimated debt within Gibson of CAN$215 million (approximately £105 million) as at Completion and includes estimated net working capital in Gibson of CAN$158 million (approximately £77 million) at Completion. These estimates for debt and net working capital are subject to audit. 

Strategy and Use of Proceeds

As outlined on 6 August 2008, Hunting expects to use the proceeds from the disposal to invest in Hunting Energy Services, make earnings enhancing acquisitions and to eliminate net borrowings. 

The Board of Hunting has to date reviewed a number of acquisition opportunities and with the funds now in place will progress these discussions. Further announcements will be made when appropriate.

Board Change

The Company also announces that Terry Gomke, the President and Chief Executive of Gibson, steps down from the Board of Hunting with effect from 12 December 2008. The Board would like to thank Terry for all his work with Gibson over the years and extend their best wishes to him and his team as Gibson enters a new phase of its development.

Commenting on the Completion of the disposal, Dennis Proctor, Chief Executive of Hunting said:

'We are delighted to have completed the disposal of Gibson, in what has been a challenging time for global markets. With the proceeds of the transaction in place, I am confident that the Board will successfully conclude a number of acquisitions which will enable Hunting to continue its impressive growth.

We now turn to the future with a strong capital structure, poised to grow further as the energy sector continues to demand Hunting's excellent products and technologies.'

For further information please contact:

Hunting PLC Dennis Proctor, Chief Executive Peter Rose, Finance Director	Tel: [phone] [phone]
Close Brothers Corporate Finance Limited Andrew Cunningham Michelle Le Merre	Tel: [phone]
Simmons & Company International James Baker Spencer Rippstein	Tel:  [phone]
RBS Hoare Govett Limited Andrew Foster  Tom Perry	Tel: [phone]
Buchanan Communications Ben Willey Richard Darby Chris McMahon Catherine Breen	Tel: [phone] [phone] [phone] [phone] [phone]

Notes to Editors:

About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a fully listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has principal operations in Canada, China, France, Holland, Hong Kong, Singapore, United Arab Emirates and the United States of America.

About Hunting Energy Services

Hunting Energy Services is a global provider of upstream oil and gas equipment. Sales and service operations are located in the major oil centres of the world including 20 company owned facilities and a network of more than 60 licensed partners. The division has approximately 1,500 employees under four business platforms: well construction, well completion, exploration and production and Hunting Energy France, a provider of petrochemical equipment.

Information on Gibson Acquisition ULC (formerly 1413281 Alberta ULC) 

Gibson Acquisition ULC is a company formed for the purposes of the acquisition of Gibson and ultimately owned by the Riverstone/Carlyle Global Energy and Power Funds, a group of energy focused private equity funds managed by Riverstone. Riverstone is a New York-based energy and power focused private equity firm founded in 2000 with approximately US$16 billion under management. Riverstone conducts buyout and growth capital investments in the midstream, upstream, power, oilfield services and renewable sectors of the energy industry. To date, the firm has committed more than US$10.8 billion to 58 investments across these five sectors.

 

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