CanElson Drilling Inc.
TSX : CDI

CanElson Drilling Inc.

November 04, 2014 23:27 ET

CanElson Signs Five Drilling Rigs to Long-Term Contracts, Including Two Additional New Builds

CALGARY, ALBERTA--(Marketwired - Nov. 4, 2014) - CanElson Drilling Inc. (TSX:CDI) announced today that it has signed five drilling rigs to long-term contracts, including three previously disclosed and under construction, as well as two new builds.

"We continue to expand our footprint in our core areas of operation" said Randy Hawkings, President and CEO. "Our focus remains on providing lower overall well costs to our customers by being measurably more efficient in the drilling process and we believe that these contracts are a reflection of our customers trust in us to deliver long term cost savings."

FUTURE NEW BUILD STATUS

CanElson has signed five drilling rigs to long-term contracts with existing customers, including three previously under construction and two additional new build mechanical heavy duty telescopic doubles ("tele-doubles"). Continued demand for the Company's drilling rigs is based on our strategy to demonstrate efficiency in the drilling process by minimizing non-productive time, to maximize performance while drilling, and to flexibly integrate related equipment, services and contract types into the drilling solution.

CanElson's deployment of new rig builds is as follows:

  • Rig #49 (previously announced, Alternating Current Electric (AC) tele-double): Committed to a long term contract and expected to commence operations in British Columbia in Q4 2014.
  • Rig #103 (previously announced, AC triple): Committed to a long term contract and expected to commence operations in Texas in Q1 2015.
  • Rig #104 (previously announced, AC triple): Committed to a long term contract and expected to commence operations in Texas in Q3 2015.
  • Rig #47 (new announcement, tele-double): Committed to a long term contract and expected to commence operations in Texas in Q3 2015.
  • Rig #48 (new announcement, tele-double): Committed to a long term contract and expected to commence operations in Texas in Q4 2015.

All five contracts are long term in nature, and meet the Company's economic thresholds. The four rigs which are to be deployed to the Permian Basin of Texas will work year round. In order to accommodate specific customer and geographic requirements, Rig #103 and Rig #104 are now expected to commence operations in Q1 2015 and Q3 2015, respectively. The total incremental capital required to deliver the two new build tele-double rigs is anticipated to be approximately $22 million. CanElson anticipates that it can fund the construction of the aforementioned drilling rigs, the remainder of its capital program which is not related to expansion, as well as the current quarterly dividend through cash flow and existing credit facilities.

THIRD QUARTER RESULTS

CanElson will report its third quarter and nine month ended 2014 results on November 6, 2014, at approximately 5:30 a.m. Mountain Time (7:30 a.m. Eastern Time). Full financial statements will be available on the Company's website (www.canelsondrilling.com) shortly thereafter.

ABOUT CANELSON

The primary business of CanElson (TSX:CDI) is operating land-based contract drilling rigs in Canada and the US for oil and natural gas exploration and development companies. The Corporation also has a 50% ownership interest in a joint venture, Diavaz CanElson de Mexico, S.A. de C.V., whose primary business is operating land-based contract drilling and service rigs in Mexico. CanElson also provides compressed natural gas and raw gas transportation services through its wholly owned subsidiary, CanGas Solutions Inc.

FORWARD LOOKING INFORMATION

This press release contains forward-looking information pertaining to: incremental capital to construct Rig #47 and Rig #48, and CanElson`s expected timing of deliveries for its new build drilling rigs. This forward-looking information involves material assumptions and known and unknown risks and uncertainties, including the risks set out under "Risks and Uncertainties", certain of which are beyond CanElson's control. CanElson's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the other risks, the material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits CanElson will derive therefrom. The forward-looking information is made as at the date of this press release and CanElson does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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