Stampede Drilling Announces Sale of Equipment

Executive Summary

• Stampede Drilling Inc. completed the sale of drilling equipment from its A/C triple rig for a total consideration of approximately $5.29 million (cash plus equipment).
• Proceeds will be used to reduce existing operating debt, with remaining flexibility to fund future strategic initiatives such as a potential normal course issuer bid, capital expenditures, and growth opportunities.
• The transaction recaptures roughly 25 % of the original purchase price paid for the August 2022 acquisition, strengthening the company’s balance sheet amid a weak oil‑price environment.

Key Details

• Purchase Price: ~​$5.29 million total; $5 million in cash and equipment valued at $290,000 transferred from Purchaser to Stampede.
• Asset Scope: Sale represents about 25 % of the value of the August 2022 acquisition (one A/C triple rig, five tele‑doubles, related assets).
• Retained Assets: Stampede kept nearly half of the key components of the A/C Triple for possible future sale or integration.
• Use of Proceeds:
• Primary: Reduce existing operating line / debt.
• Secondary: Provide flexibility to renew normal course issuer bid, fund capital expenditures to improve rig marketability, and pursue growth opportunities as market conditions improve.
• Strategic Rationale (CEO Comment): The sale improves debt position and financial flexibility; market conditions (declining oil prices, operator consolidation) reduced demand for the A/C Triple, making balance‑sheet strength a priority over further capital investment in the rig.
• Closing Conditions: Transaction closed after satisfaction of customary representations, warranties, covenants, and Purchaser’s successful debt financing.

Notable Quotes

“The completion of this transaction marks a significant milestone for Stampede, strengthening our debt position and enhancing our financial flexibility… we chose to prioritize our balance sheet strength and flexibility, positioning ourselves for future market recovery.” – Lyle Whitmarsh, President & CEO

Materiality Assessment: Material – Positive (significant cash inflow and debt reduction improve the company’s financial standing).