DIVERGENT Energy Services Announces Closure of a Non-Core U.S. Business Division
CALGARY, ALBERTA--(Marketwired - Jan. 22, 2016) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
DIVERGENT Energy Services Corp. ("Divergent" or the "Corporation") (TSX VENTURE:DVG) today announces a sharpened focus on advancing the commercialization of its second-generation Linear Electric Submersible Pump (the "Pump"), with the closure of a U.S. subsidiary involved in distributing electric submersible motors to the agriculture, light industrial, and mining industries. The Corporation's subsidiary, Karlington Artificial Lift, LLC ("Karlington"), was not core to Divergent's long-term vision to commercialize the Pump. In addition to streamlining its business, Divergent expects meaningful operating cost reductions anticipated at USD$350,000 in 2016.
Pursuant to the closure, Karlington has entered into a termination and general release agreement (the "Agreement") with its manager (the "Consultant") to terminate the November 1, 2014 consulting arrangement by mutual agreement. Pursuant to the terms of the Agreement, Karlington has agreed to transfer certain inventory of Karlington's to the Consultant and the Consultant has agreed to forfeit 1,000,000 shares in the capital of the Corporation that are registered in its name. A loss of USD$630,000 of inventory associated with Karlington will be accounted for in the 2015 financial statements of the Corporation, and the shares will be cancelled and returned to treasury.
The Corporation's U.S. business in Gillette Wyoming is unaffected by the Agreement and will continue to play a key role in the Corporation's growth and focus on its Pump business.
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, DIVERGENT Energy Services Corp. provides an array of artificial lift products and services that are used in the oil and gas industry, including its revolutionary Linear Electric Submersible Pump. Divergent's Pump is approaching commercialization and is targeted to replace traditional oil pumpjacks. Other Divergent products currently in use by its oil and gas industry customers include Electric Submersible Pumps and Electric Submersible Progressing Cavity Pumps.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
(Not for dissemination in the United States of America)
Source: Marketwired (Canada)
(January 22, 2016 - 9:00 AM EST)
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