Ensign Energy To Buy Southern U.S. Drilling Assets For $510 Million

Ensign Energy Services Inc. (ESI.T) will boost its presence in the southern U.S. market through an agreement to acquire Rowan Cos.' (RDC) land-drilling division for US$510 million plus working capital.

The oilfield-services company said the purchase price is payable in cash and will be funded its existing working capital, available lines of credit and a new term facility of up to US$400 million.

The assets being acquired include 30 deeper capacity electric land- drilling rigs, all of which are equipped with top drives. The fleet is well suited for extended-reach drilling in the oil and natural gas resource plays of Texas, Louisiana, Alabama and Oklahoma, Ensign said.

Calgary-based Ensign said the assets will complement its existing U.S. operations in the Rocky Mountain region and California. The purchase will increase its global fleet to 340 marketed drilling rigs, including 115 drilling rigs in the U.S.

Ensign reported revenue of just over C$500 million in the first quarter.

-By Carolyn King, Dow Jones Newswires; 416-306-2100; [e-mail]