UPDATE 1-Western Energy to buy well services provider IROC

Fri Feb 22, 2013 9:00am EST

* Cash-and-stock deal valued at about C$193.7 mln including debt

* IROC to get equivalent of C$3.10/share, a premium of 31 pct

Feb 22 (Reuters) - Western Energy Services Corp, owner of the sixth-largest fleet of drilling rigs in Canada, will buy IROC Energy Services Corp for about C$157 million ($154 million) to add rigs used in maintaining oil and gas wells.

IROC's 51 well-servicing rigs operate mainly in Western Canada's oil-rich shale fields, which is likely to benefit Western Energy as oil wells need more maintenance than gas wells.

Western Energy, which had 49 drilling rigs and seven newly built service rigs as of December, will also gain an entry into the oilfield equipment rental business.

"All of IROC well-servicing rigs are ideally suited for the continued demand for workover services as a result of the number of producing oil wells," Western Energy said in a statement on Friday.

The deal, valued at about C$193.7 million including debt, is Western Energy's second-largest acquisition.

The Calgary-based company will pay IROC an equivalent of C$3.10 per share in cash and stock, a premium of 31 percent to IROC's closing price on Thursday.

Western Energy, whose customers include Apache Corp, Imperial Oil Ltd and Husky Energy Inc, said IROC has agreed not to solicit or initiate talks regarding any rival bid. The deal is expected to close by April 30.

Raymond James advised Western Energy, while AltaCorp Capital Inc advised IROC.

Shares of Western Energy, which has a market capitalization of about C$473 million, closed at C$7.92 on Thursday on the Toronto Stock Exchange.

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