Xtreme Coil Drilling Corp.

Xtreme Coil Drilling Corp.

May 09, 2011 09:15 ET

Xtreme Coil Closes New Credit Agreement to Fund Growth

CALGARY, ALBERTA--(Marketwire - May 9, 2011) -Xtreme Coil Drilling Corp. ("Xtreme Coil" or the "Company") (TSX:XDC) announced today it has entered into an agreement ("Credit Agreement") with HSBC Bank Canada as lead arranger for a syndicate of financial institutions to provide a new $90 million credit facility for Xtreme Coil. The new credit facility consists of $15 million as a revolving operating loan facility to assist with financing general corporate and working capital requirements and $75 million as an extendible loan facility to refinance existing bank debt and to provide working capital for capital expenditures and potential acquisitions.

The Credit Agreement is secured by the Company's North American rig assets and is provided on a one-year annually renewable term. If not renewed, both facilities convert to a two-year non-revolving term loan.

"With the closing of this Credit Agreement, Xtreme Coil is now in a strengthened financial position to execute on our previously-announced expansion plans", commented Rod Uchytil, president and chief executive officer. He further noted, "Opportunities for growth remain robust, especially in developing and expanding resource plays, both for drilling and coiled tubing services work."

Operations Update

During the 2011 first quarter, Xtreme Coil mobilized one Coil Over Top Drive® ("COTD®") drilling rig to Texas from Colorado, upgraded it to an XDR 500 series and deployed it to operations in the Eagle Ford on March 1, 2011. The Company estimates approximately 1,050 operating days for 2011 first quarter resulting in greater than 70 percent utilization of the Company's rig fleet. On March 31, 2011, 13 rigs were working, including seven in the Rocky Mountain region of the United States, one in North Dakota, two in Texas, one in Mississippi and two in Saudi Arabia. The first of Xtreme Coil's two new-build XDR 500 drilling rigs is on schedule to be mobilized later in 2011 second quarter.

2011 First Quarter Results and Conference Call

The Company expects to announce 2011 first quarter financial and operating results after market close on Tuesday, June 7, 2011 with a follow-up conference call planned for Wednesday, June 8th at 9:00am MDT, 10:00am CT.

About Xtreme Coil

Xtreme Coil owns and operates a fleet of proprietary, dual-purpose deep capacity drilling rigs featuring the Company's patented COTD® designs. These rigs offer oil and gas companies outstanding performance and efficiency through leading-edge technology for both conventional and coil drilling. Currently, 14 rigs are located in the United States, with drilling operations in Colorado, North Dakota, Texas, Wyoming and Mississippi. Two deep coil service rigs are conducting re-entry horizontal drilling operations in Saudi Arabia. Xtreme Coil is expanding deep coil well servicing operations and has six units undergoing technical upgrades with expected deployment beginning during 2011 fourth quarter. Xtreme Coil's common shares trade on the Toronto Stock Exchange under the symbol "XDC."

Reader Advisory

This news release, or documents incorporated herein, contains forward-looking statements within the meaning of applicable securities laws ("FLS"). More particularly, this news release contains statements that may relate to financing, contracting, marketing, construction, modifications or upgrades, deployment, operation and utilization of drilling rigs in the Company's current and future fleet. Although Xtreme Coil believes expectations reflected in these FLS are reasonable, readers should not place undue reliance on them because Xtreme Coil can give no assurance they will prove to be correct. There are many factors that could cause FLS not to be correct, including risks and uncertainties inherent in the Company's business.

Readers may review a FLS discussion in more detail in the management's discussion and analysis and financial statements for the twelve months ended December 31, 2010 filed on www.sedar.com and on the Company's website www.xtremecoildrilling.com. Readers are cautioned financial outlook information contained in this news release is not appropriate for purposes other than for which it is disclosed here. Readers should not place undue importance on FLS and should not rely on this information as of any other date. Except as required pursuant to applicable securities laws, Xtreme Coil disclaims any intention, and assumes no obligation, to update publicly or revise FLS to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such FLS or otherwise.

Contact Information

  • Xtreme Coil Drilling Corp.
    Rod Uchytil
    President and Chief Executive Officer
    +1 403 262 9500
    +1 403 262 9522 (FAX)

    Xtreme Coil Drilling Corp.
    Dale W. Wilhelm
    Chief Financial Officer
    +1 403 262 9500
    +1 403 262 9522 (FAX)

    Xtreme Coil Drilling Corp.
    1402, 500 Fourth Avenue SW
    Calgary, Alberta T2P 2V6