CALGARY, ALBERTA--(Marketwired - Jan. 13, 2014) - Savanna Energy Services Corp. (TSX:SVY) ("Savanna" or "the Company") is pleased to announce that it has entered into agreements to expand both its drilling and workover fleets. These new builds will further expand and deepen our North American drilling rig focus as well as expand our footprint in Australia. A portion of the long lead items we acquired previously will be utilized for the drilling rig. An additional $25 million of capital will be required for the new builds.
Savanna has agreed to a long-term contract to supply an Ultra Heavy Telescopic Double AC Drilling Rig with a three-year term to an existing customer. This drilling rig will be pad-capable, have a hook load of 440,000 lbs., be equipped with two- 1,600 horsepower pumps, a 1,200 horsepower drawworks and will be capable of drilling vertical wells to a depth in excess of 4,000 meters and long reach horizontals in excess of 5,500 meters. This will be the seventh rig with these capabilities and size in Savanna's North American fleet.
Savanna has contracted three new flush-by units for its workover fleet in Australia. A flush-by unit is a compact, self- contained unit designed for rapid deployment and safe operations which integrates features of a pressure truck and a small rod- rig, and is used for diagnosing, trouble-shooting and repairing coal seam gas wells. These contracts are in addition to five workover rig contracts awarded in 2013, all of which were awarded outside of the normal tendering process, and are expected to be delivered to Australia during the second and third quarters of 2014. Savanna's fifth drilling rig, delivered in the fourth quarter of 2013, commenced field operations in mid-December.
The latest contracts, combined with new equipment previously announced and under construction, will result in more than a 75% expansion of Savanna's fleet in Australia by the end of 2014. Savanna remains well positioned to continue generating increasing returns from this division during 2014 and beyond. Savanna is experiencing strong demand for its drilling, workover, trucking and rental equipment in Australia, and the Company remains optimistic about its future prospects in the region. There remain several active and pending tenders outstanding for additional equipment. Savanna will further update its capital program based on the results of these tenders, if, as, or when they are announced.
Savanna is a Canadian-based international drilling and oilfield services provider with operations in Canada, the United States and Australia. The Company provides state-of-the-art equipment and services directly, as well as through several strategic First Nations partnerships in Canada.
Cautionary Statement Regarding Forward-Looking Information and Statements
Certain statements and information contained in this press release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to the following: the management of costs in respect of the build and commissioning of drilling rigs and Australia flush-by units.
These statements are based on certain assumptions and analysis made by Savanna in light of its experience as well as other factors it believes are appropriate in the circumstances including, without limitation: the progress of Savanna's current and proposed capital projects and current customer advice on deployment for specific customer programs. However, whether actual results or events will conform to Savanna's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and events to differ materially from Savanna's expectations including, without limitation: fluctuations in the price and demand for oil and natural gas; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for well servicing and contract drilling; the effects of weather conditions on operations and facilities; the existence of competitive operating risks inherent in well servicing and contract drilling; general economic, market or business conditions; changes in laws or regulations, including taxation, environmental and currency regulations; the lack of availability of qualified personnel or management; the other risk factors set forth under the heading "Risks and Uncertainties" in Savanna's Annual Report and under the heading "Risk Factors" in Savanna's Annual Information Form; and other unforeseen conditions.
All of the forward-looking information and statements made in this press release are qualified by this cautionary statement and there can be no assurance that the actual results or events anticipated by Savanna will be realized or, even if substantially realized, that they will have the expected effects on Savanna or its business or operations. Except as may be required by law, Savanna assumes no obligation to update publicly any such forward looking information and statements, whether as a result of new information, future events, or otherwise.
Savanna is a Canadian-based drilling and oilfield services provider with operations in Canada, the United States and Australia, focused on providing fit for purpose equipment and technologies.