Tuscany International Drilling Inc.
TSX : TID

Tuscany International Drilling Inc.

March 11, 2011 09:00 ET

Tuscany International Drilling Inc. Announces Key Management Additions and Changes, Discusses 2010 Year-End Financial Information and Provides Rig Deployment Update

CALGARY, ALBERTA--(Marketwire - March 11, 2011) -

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Tuscany International Drilling Inc. ("Tuscany" or the "Company") (TSX:TID) is pleased to announce the following key management additions and changes. These changes create a structure that will maximize operational and commercial performance from our existing fleet and facilitate future growth and expansion.

Management Additions and Changes

Kiel Clark, President South America – Mr. Clark was formerly Tuscany's Regional Vice President of Brazil. In his new role, Mr. Clark will be responsible for overseeing all operations in all areas of South America. Tuscany currently operates in Brazil, Colombia, Ecuador, Guyana and Peru. Mr. Clark has over 30 years of progressive experience with a number of international drilling companies and has held prior positions of Regional Vice President, General Manager, Area Manager, Operations Manager, Drilling Superintendent, Rig Manager, Toolpusher and Driller.

Andres Lozano, Vice President Business Development – Mr. Lozano will be responsible for optimizing current business operations and vetting future opportunities. Mr. Lozano has over 15 years of extensive experience in setting up and optimizing numerous drilling operations and country offices. Mr. Lozano holds a degree in Chemical Engineering and has held positions of President, Vice President Business Development, Vice President Contracts & Marketing, Director of Business Development, Area Manager, Operations Manager, Assistant Operations Manager, Operations Engineer and Associate Engineer.

Don Bertsch, President Colombia – Mr. Bertsch has been with the Company prior to rigs arriving in South America and headed up all operations for Tuscany during most of its start up period. With the expansion of Tuscany into additional jurisdictions, he will continue to oversee all operations in the Company's most active jurisdiction of Colombia. Mr. Bertsch has over 30 years of industry experience, the last fifteen of which were in South America. He has held numerous positions including Regional Manager and General Manager. 

Ted Secrist, General Manager Brazil – Mr. Secrist will work with Mr. Clark to manage Tuscany's operations in Brazil. Mr. Secrist began his career working on drilling rigs with a number of different drilling companies. After over 20 years working on drilling rigs, Mr. Secrist obtained his degree in Mechanical Engineering in 1994. Since obtaining his degree, Mr. Secrist has held the position of Area Manager, Project Manager, Drilling Superintendent, Operations Manager and District Engineer. 

Bolivar Villereal, General Manager Ecuador – Mr. Villereal has been with the Company since it began operations. He was previously the Company's Finance and Administration Manager in Ecuador. Mr. Villereal has over 30 years of experience working with international drilling companies. 

Jim Walker, Operations Manager Brazil – Mr. Walker has over 25 years of international business experience at the district, regional and corporate level for both start up and established service and manufacturing companies. He has held the position of President & Chief Operating Officer, Global Business Development Manager, Regional Operations Manager and General Manager.

Mike Heidt, Manager Equipment Manufacturing and Technical Services. Mr. Heidt has been with the Company since it began operations and has recently assumed this role. He is responsible for the Company's rig build programs and has extensive drilling and manufacturing experience. Mr. Heidt has over 20 years experience in the drilling industry, 16 of which have been international. He has held positions of Special Projects, Director of Drilling & Workover Operations, Operations Manager, Drilling Superintendent, Field Superintendent, Toolpusher, Rig Manager, Driller, Derrickman, Motorman and Floorman.

2010 Year-End Discussion

These additions and changes are very significant as the Company moves from start up to executing as an operating company. 2010 was a watershed year in getting Tuscany's initial fleet to South America. The year consisted of rig building, corporate structuring particularly in Brazil, transporting, shipping, clearing customs, customer inspections, in some cases, waiting for customer to commence operations and initial start up. As a result, Tuscany's financials for 2010 will reflect a start up year. Tuscany's revenue for 2010 is anticipated to be approximately US$19 million, with a resulting negative EBITDA of approximately US$8 million and negative cash flow of approximately US$10 million. Although the foregoing figures are based on management's assessment of its current financial data, they may be subject to change as a result of its completion of the year-end audit process. Last year, and in particular the fourth quarter of 2010, was when many of Tuscany's initial 17 rig fleet was deployed. The Company anticipates the first quarter of 2011 will be the first reporting period that the Company will be profitable as many of the rigs began generating income during this time. Tuscany looks forward to a further increase in profitability in the second quarter of 2011 as the entire fleet goes from start up to operating. 

Rig Deployment Update

All seventeen rigs of Tuscany's initial fleet are now in South America as the last two rigs destined for Brazil are now in country. Both of these Brazil rigs are under contracts for a four year term with a provision for an additional four years. The first rig is currently being flown to location and has been on the move rate since February 9, 2011. The second rig has now cleared customs and is anticipated to be on the move rate in mid March, 2011. 

The Company is also currently constructing two additional rigs to bring the total fleet to nineteen. The first, a 1500 horsepower drilling rig, is on schedule to be completed the end of March 2011. Tuscany has received a letter of intent from an existing client who has been using a similar rig during the past year to contract the rig. The letter of intent contemplates a long term multi-well contract as soon as the rig can be delivered to the field. The second rig is an 850 horsepower drilling rig complete with walking system designed to more efficiently drill numerous wells from the same pad. Originally this rig was designed as a 1000 horsepower but has since been changed to better replicate a similar rig being used by an existing client who has requested another rig. This rig is also on schedule for delivery in the latter part of the second quarter of this year.

Tuscany continues to expand its fleet of North American made newly built, state-of-the-art equipment for South America where demand for Tuscany's equipment exceeds expectation.

About Tuscany

Tuscany, a corporation headquartered in Calgary, Alberta, is engaged in the business of providing contract drilling and work‐over services along with equipment rentals to the oil and gas industry. The Company is currently focused on providing services to oil and natural gas operators in South America. Tuscany has operating centers in Colombia, Ecuador, Brazil and Peru.

READER ADVISORY

Statements in this press release contain forward-looking information, including financial projections and statements regarding rig deployment and construction. Readers are cautioned that assumptions used in the preparation of such information, such as assumptions made in light of Tuscany's experience, perception of historical trends, current industry conditions and expected future developments, may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Tuscany. These risks include, but are not limited to: the risks associated with the timely construction and deployment of drillings rigs, the successful negotiation of drilling contracts, the oil and gas industry generally, commodity prices and exchange rate changes, regulatory changes, successful exploitation and integration of technology, customer acceptance of technology, changes in drilling activity and general global economic, political and business conditions. Industry related risks could include, but are not limited to: operational risks, delays or changes in rig construction and deployment, plans, health and safety risks and the uncertainty of estimates and projections of costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Tuscany does not undertake any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Tuscany International Drilling Inc.
    Walter Dawson
    Chairman and CEO
    (403) 265-8258
    or
    Tuscany International Drilling Inc.
    Reg Greenslade
    President
    (403) 265-8258
    or
    Tuscany International Drilling Inc.
    Matt Moorman
    Executive VP Corporate Finance and Business development
    (403) 265-8258
    or
    Tuscany International Drilling Inc.
    Bruce Moyes
    CFO
    (403) 265-8258
    or
    Tuscany International Drilling Inc.
    100, 522-11th Avenue S.W.
    Calgary, Alberta
    (403) 265-8793 (FAX)
    www.tuscanydrilling.com