Savanna Energy Services Corp.

Savanna Energy Services Corp.

October 21, 2014 18:40 ET

Savanna Energy Services Corp. Signs Contract to Build Four New Drilling Rigs

CALGARY, ALBERTA--(Marketwired - Oct. 21, 2014) - Savanna Energy Services Corp. (TSX:SVY) ("Savanna") is pleased to announce it has signed a contract to expand its drilling operations in Australia. Savanna will deploy four Top Drive Single ("TDS") drilling rigs to operate in Queensland for an existing customer to support their east coast LNG project. The new design TDS 2000 and TDS 3000 rigs are under multi-year take-or-pay contracts with the first rig expected to begin operations in Q1 2016. The capital cost of the four new TDS drilling rigs will be allocated to Savanna's 2015 and 2016 capital programs, and will aggregate $63.4 million.

"We see this latest contract award as further endorsement of the people, equipment and infrastructure we have introduced to Australia over the past 5 years," said Ken Mullen, Savanna's President and Chief Executive Officer. "We continue to experience strong utilization of our existing equipment, are very focused on delivering the additional equipment contracted over the past year, and see strong opportunities for additional business growth in Australia in the future. Australia remains a strong diversification platform for Savanna, with market forces distinct from those currently impacting North America."

Currently, Savanna has five drilling rigs and five workover rigs operating in Australia. Savanna is in the process of deploying four additional workover rigs and three flush-by units under long-term take-or-pay contracts. These new builds will be operational by Q1 2015 with the majority of the rigs in the field by year-end 2014.

The remainder of Savanna's current capital program is focused on new-build opportunities to increase the depth and capacity of its drilling fleet, expanding Savanna's offering of deep double and triple drilling rigs. Savanna remains on schedule to deploy one heavy double drilling rig for Canada in Q4 2014 and three VELOX triple drilling rigs for the U.S. in Q4 2014 and Q1 2015, all under long-term contracts.

Savanna is a leading North American and Australian contract drilling and oilfield services company providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading aboriginal relationships.

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 expectation of when the heavy double and the three VELOX triple drilling rigs are expected to be working in the field in North America and the delivery of 11 drilling and workover rigs for Australia.

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.

Contact Information

  • Savanna Energy Services Corp.
    Ken Mullen
    President and CEO
    (403) 503-9990

    Savanna Energy Services Corp.
    Dwayne LaMontagne
    Executive Vice-President and CDO
    (403) 503-9990