Dillco Fluid Services Enters Plan Of Merger and Reorganization Agreement With Aspen Exploration
Merged Company to Provide Well-Site Services to Domestic Oil and Gas Industry; Company to Operate as ENSERVCO
Under terms of the agreement, Aspen will acquire all outstanding shares of privately held Dillco through the issuance of 14,519,244 shares of Aspen common stock to Dillco's shareholders. Upon completion of the transaction, the holders of Aspen common stock will own approximately one third of the combined company, while Dillco shareholders will own the remaining two thirds. Closing of the transaction, which is expected to take place on or before July 31, 2010, is subject to completion of a fairness opinion, completion of due diligence and final approval of the merger by Aspen's board of directors, among other conditions.
Following completion of the proposed transaction, Aspen expects to do business under the trade name "ENSERVCO." Aspen will be 100% owner of Hugoton, Kan.-based Dillco Fluid Services, Inc. and indirectly (through Dillco) 100% owner of Colorado Springs, Colo.-based Heat Waves Hot Oil Service.
Both Dillco and Heat Waves are longtime providers of well-site services to the onshore oil and gas industry. The businesses, which collectively operate an extensive fleet of modern oilfield trucks and equipment, provide hot oiling, frac heating, acidizing, water hauling and well-site construction services to customers throughout the Rocky Mountain region and central United States. In addition, Heat Waves has established a growing presence in the Northeast United States, where customers are operating in the prolific Marcellus Shale. The Company also has plans to begin operations in the Bakken Formation, and is establishing a facility in North Dakota to do so. Customers range from small independents to many of the largest diversified energy companies in the United States.
Mike Herman, Chairman and CEO of Dillco, said, "This planned merger represents a critical step in the advancement of our business plan. As a publicly traded company, we believe we will have additional financial and operational flexibility that will allow us to accelerate certain strategic initiatives. We have enjoyed working with the Aspen board of directors in pursuing this transaction. Their professionalism and knowledge of the energy industry has been very valuable."
R.V. Bailey, CEO of Aspen, said, "Our board of directors has been actively reviewing a range of business alternatives since the divestiture of our California natural gas assets in June of last year. We believe Dillco's current operations and growth plans in the oilfield services industry represent a compelling opportunity for our stockholders. We look forward to moving forward with this proposed merger."
Further information will be made available in additional filings with the Securities and Exchange Commission and in news releases as appropriate. There also is more information in a June 24, 2010, Securities Exchange Commission filing by Aspen on Form 8K.
Cautionary Note Regarding Forward-Looking Statements
This news release contains information that is "forward-looking" in that it describes events and conditions, which Dillco Fluid Service, Inc. ("Dillco") and Aspen Exploration Corporation ("Aspen") reasonably expect to occur in the future. Expectations for the future performance of the business of Dillco and Aspen (including, without limitation the possibility of completing the transaction between Dillco and Aspen, any benefits that may accrue to Aspen or Dillco shareholders from such a transaction, and the possibility that Dillco may commence operations in the Bakken, among other forward-looking statements) are dependent upon a number of factors, and there can be no assurance that Dillco or Aspen will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond Dillco's or Aspen's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in Aspen's annual report on Form 10-K, as well as the risk that the merger may not occur, and if it does, the combined companies may not operate efficiently. It is important that each person reviewing this release understand the significant risks attendant to the operations of Dillco and Aspen. Dillco and Aspen disclaim any obligation to update any forward-looking statement made herein.
