Alberta-based Petrowest Corp. (TMX:PRW) has entered an agreement to purchase the assets of Peejay Environmental Limited Partnership, including a lease for a landfill site located 108 km north of Fort St. John in northern B.C.
The agreement also includes the permit and environmental assessment certificate required for the landfill’s operation.
Petrowest is involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. The company’s primary operations are based around Grande Prairie, Alberta, and in northeastern B.C.
Petrowest will pay an initial $5 million to Peejay Environmental and subsequent earn-out payments on the first 625,000 tons of waste accepted at the landfill.
The landfill site is licensed to receive up to 4.5 million tons of contaminated waste.
Other assets to be acquired include a major building to receive waste and a series of site improvements required for operations. The landfill is expected to be operational within two months of the closing of the acquisition.
As part of the transaction, Petrowest has negotiated an agreement with the Doig River First Nation to ensure their continued support of the project and to give members of the First Nation the opportunity to participate in the economic opportunities associated with the landfill.
In addition, Petrowest has negotiated a master services agreement with a major Canadian oil and gas company operating in the region to receive their contaminated soil for the next five years, at a fixed rate for the first year.
Rick Quigley, Petrowest’s president and CEO, said, “We are extremely pleased to be able to expand our service offering to our clients in the area.
“The synergies between the landfill and Petrowest’s existing business make this an attractive transaction for us. We will be able to use existing equipment and skills at the landfill and we expect to be able to generate additional construction and transportation revenue in the loading and hauling of material to the site.”
Closing of the acquisition is subject to the transfer of the lease, permit and environmental assessment certificate into the name of Petrowest Environmental Services Limited Partnership, a limited partnership established by Petrowest to acquire the assets.
Closing is expected to take place by the end of July.
