VERNAL, Utah – (BUSINESS WIRE) – Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or the “Company”), an innovator and manufacturer of drilling tool technology, today announced sale-leaseback agreements for its facilities in. known Spring, Utah. The transaction is subject to customary due diligence and the company expects to close before year end.
Under the terms of the transaction, SDP will sell its facilities for $ 4.5 million while entering into a 15-year lease. After fees, the company is expected to generate approximately $ 4.2 million in revenue, of which $ 2.5 million will be used to repay the outstanding mortgage. The lease terms apply to monthly payments that are $ 17,000 less than the current mortgage debt service.
Chris Cashion, Chief Financial Officer, commented, “This transaction was an excellent opportunity for us to monetize our Vernal property given current market conditions. The proceeds will allow us to fully pay off our mortgage and improve liquidity with additional cash of approximately $ 1.7 million. The additional cash strengthens our balance sheet and gives us the flexibility to continue expanding internationally and tap additional sources of income. The Drill-N-Ream®, our unique, patented well conditioning tool, is becoming increasingly popular in international markets and continues to attract new customers in the U.S. We believe this is a good sign for our future and will further strengthen these opportunities Oil and gas industry is starting to improve. ”
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, state-of-the-art drilling tool technology company providing cost-effective solutions that increase production efficiency for the oil and gas drilling industry. The company develops, produces, repairs and sells drilling tools. SDP drilling solutions include the patented Drill-N-Ream® well conditioning tool and the patented Strider ™ oscillation system technology. In addition, SDP is a manufacturer and processor of PDC drill bits (polycrystalline diamond compact) for a leading oil field service company. SDP operates a state-of-the-art drilling tool manufacturing facility where it manufactures its solutions for the drilling industry as well as custom products. The company’s growth strategy is to leverage its expertise in drilling tool technology and innovative precision machining to expand its product offering and solutions for the oil and gas industry.
More information about the company can be found at: www.sdpi.com.
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This press release contains forward-looking statements and information that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, except for historical facts, in this press release including, without limitation, the continuing impact of COVID-19 on the business, the company’s strategy, future operations, success in developing future tools, and the company’s effectiveness in developing future tools Execution of its business strategy and plans, financial condition, estimated revenues and losses, projected costs, prospects, plans and goals of management, and the ability to outperform are forward-looking statements. The use of the words “could”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “may”, “continue”, “predict”, “potentially”, “project”, “predict” “”, “Should” or “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements reflect the company’s beliefs and expectations and are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include the duration of the COVID-19 pandemic and the associated effects on the oil and natural gas industry, the effectiveness of the expansion successes in the Middle East, the options available for the market channels in North America, the postponement of the commercialization of the Strider technology, the company’s business strategy success and growth prospects; the market success of the company’s specialized tools, the effectiveness of its sales efforts, cash flow and liquidity; Financial projections and actual operating results; Amount, type and time of capital expenditure; the availability and terms of capital; Competition and government regulations; and general economic conditions. These and other factors could adversely affect the results and financial effects of the company’s plans described herein. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
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