VLI and REI have been in talks for the past year over the agreement.

REI and VLI formed a short-lived joint venture – Valley USA – about 10 years ago and since then both companies have undergone significant changes.

VLI has grown significantly over the past few years and diversified beyond directional drilling services including drill, diesel equipment, and conveyor system manufacturing and sales. VLI is the dominant provider of directional drilling equipment and services outside the US, including China, Russia and eastern Europe.

REI has been in operation for more than 25 years and has also grown significantly. REI has continued to add drills to its fleet and has also entered the diamond drilling market. The company also provides downhole directional and other drilling products through recently formed Drilling Products.

Together, VLI and REI offer 25 long hole directional drills for hire, complete turnkey long hole directional drill packages and training for all drilling conditions.

Collectively, the two hold experience in a wide variety of drilling conditions and project objectives, and can help design, implement and complete directional and diamond drilling projects.

The deal was structured so that each company will be able to share intellectual property, equipment, technical resources and financial resources.

Management and operational activities will remain basically unchanged.

Both companies said the deal was made to diversify, expand, improve competitive opportunity, and address changing market conditions.