Diversified Resources Closes on Acquisition of Northern Colorado Oilfield Service Companies
Littleton, CO, February 9, 2016 (Newswire.com) - Diversified Resources, (DDRI-OTCQB) announced today it has executed a share exchange agreement with Diversified Energy Services, Inc. Diversified Energy Services, Inc. was created to be the energy services side of Diversified Resources and is made up of multiple wholly owned services companies including Ultra Energy Solutions and Vinco Logistics, both based in Greeley, Colorado. The exchange agreement calls for the issuance of approximately 20 million shares of restricted common stock and the assumption of equipment debt. The agreement is effective February 1, 2016.
Diversified Energy Services will operate as a wholly owned subsidiary designed to conglomerate independent oilfield and construction service companies that provide unique “best in class” services. The acquired companies are not expected to experience any change in management, operations, policies or business practices. The Company hopes to experience cost savings of shared overhead along with the value add of combined employee benefits, insurance and financial resources.
The combined Diversified Entities will have approximately 130 employees and with gross revenue of over $20 million. Diversified Resources is in the process of setting up profit sharing stock option plans to give employees an opportunity to participate in an equity position in the company.
Paul Laird, CEO of Diversified Resources commented: “We are extremely excited to join the managements and employees of Diversified Energy Services with the base of explorationists here at Diversified as we move forward with our goal to build shareholder value. I believe the combination of these companies will assist us in the development of our oil and gas properties in Colorado and New Mexico and simultaneously increase our profitability in the oilfield service and construction business. We look forward to the advantages afforded a much larger company in both the capital markets, and in our plans to develop an exciting group of assets we have worked hard to acquire. This fine group of operators will go far in providing Diversified Resources a solid base of revenues and cash flow while ensuring we can lower our costs of development as we make our plans to start up our drilling and workover programs. In today’s cost-focused environment, it’s imperative that we monitor all our costs in the field and I can’t think of a better group to work with as we go forward.”
Eric Whitehead, CEO of Ultra states: “We are extremely pleased to be joining Diversified Resources. Last year we started a “drill at $20/ bbls” campaign and this is one manifestation of that effort. We feel partnering with Diversified allows us to jointly develop a drilling program that lives up to the claim that we can drill profitably at $20/ bbls or less. This merger allows us to continue to streamline our business by adding economies of scale to our overhead costs while not sacrificing the quality and safety of work performed. It also gives us a means to better help our employees have an equity position in the company they help build so they can share in the upside growth.”
DIVERSIFIED RESOURCES INC.
Diversified Resources, Inc. is a Colorado based independent oil and gas exploration and Production Company with operations in Colorado’s Denver-Julesberg and Raton Basins along with the San Juan Basin in New Mexico. The company’s near term focus is to identify and develop a balanced portfolio of low risk, high return drilling prospects that include both unconventional sites that target various oil shale horizons and low risk, conventional offsets to existing production.
DIVERSIFIED ENERGY SERVICES, INC
Diversified Energy Services is a group dedicated to becoming the one call solution to a full range of oil field service and construction needs including crane service and rigging, heavy haul and rig moving, well site construction and maintenance, pumping, materials handling and disposal, trucking services and equipment operation in the Denver Julesburg Basin and the Rockies. They bring decades of combined experience to the table and back up their claims with an impeccable record of safety of efficiency. The combined entity is designed to ensure customers the highest levels of service, experience, safety and productivity.
SAFE HARBOR
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release regarding our financial position, business strategy, and plans and objectives of management for future operations and industry conditions, are forward-looking statements. These forward-looking statements are based on current expectations and assumptions concerning future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.
CONTACTS
Paul Laird, President & CEO
303-797-5417
plaird@diversifiedresourcesinc.com
Roger May, Investor Relations
303-797-5417, 303-829-2888
rmay@diversifiedresourcesinc.com
Eric Whitehead, President & CEO
Diversified Energy Services, Inc.
970-616-0722
whitehead@ultra-es.com
