Xtreme Coil Drilling Corp.
TSX : XDC

Xtreme Coil Drilling Corp.

February 07, 2011 09:15 ET

Xtreme Coil Operations Update

CALGARY, ALBERTA--(Marketwire - Feb. 7, 2011) - Xtreme Coil Drilling Corp. (TSX:XDC) ("Xtreme Coil", the "Company") provides an update with respect to new customizations of current rigs and ongoing operations. Xtreme Coil continues to diversify into North American resource plays in response to oil and gas drilling market shifts which are providing additional opportunities for corporate innovation and growth.

Another XTC 500 Committed to Liquids Rich Shale Play

After introducing the first XTC 500 series rig in August 2010, Xtreme Coil is now preparing a third XTC 500 by upgrading an XTC 400 redeployed from the United States ("US") Rocky Mountain region. We expect this XTC 500 will be ready to commence operations in 2011 first quarter under a new long-term contract for a major US independent energy company. This is Xtreme Coil's initial entry into the Eagle Ford shale in South Texas, a liquids-rich shale play known for longer, deeper horizontal wells.

Coil Servicing Market Entry

Horizontal shale wells, with multiple stage fracture treatments, are leading the growth in drilling activity in North America. Xtreme Coil is currently customizing an XTC 200 DT rig to perform coiled tubing services in unconventional oil and gas projects. These projects have increased the demand for coiled tubing services to clean out wells following fracture treatment. In some producing regions, the use of coiled tubing rigs or snubbing units is being mandated for safer clean-out operations on horizontal shale wells (reference: Pennsylvania Department of Environmental Protection Bureau of Oil and Gas Management letter to Operators dated July 12, 2010.).

The XTC 200 DT will include a 200,000 lb AC ("alternating current") electric injector with capability of running 2-5/8 inch coiled tubing to depths of more than 20,000 feet. This capability will re-define what is meant by "deep coil servicing". The customized rig is an iteration of our re-entry series rig design which has achieved several new records in our Middle East operations. The design will provide our customers with the capacity to clean out longer horizontal sections on their wells and to use larger diameter coiled tubing which can surpass the reach of the coiled tubing units now in use in a number of projects.

We expect to complete the initial rig customization during 2011 second quarter. Xtreme Coil has transferred to Texas the three XTC 200 series rigs that had been stacked in Mexico. Similar modifications to a second XTC 200 rig to prepare it for coil well servicing are also planned with completion anticipated by late in 2011 second quarter.

Estimated 2010 Fourth Quarter Operating Days

Xtreme Coil estimates approximately 1,050 operating days for 2010 fourth quarter resulting in greater than 70 percent utilization of the Company's rig fleet. As at December 31, 2010, twelve Coil Over Top Drive(R) ("COTD(R)") rigs were working, including eight in the Rocky Mountain region of the United States, one in North Dakota, one in Texas and two in Saudi Arabia.

The Company expects to announce the 2011 capital expenditures forecast following the Board of Directors' meeting scheduled for March.

About Xtreme

Xtreme Coil develops and applies leading-edge patented and patent-related technology and designs to build, transport, and operate new Coil Over Top Drive(R) drilling rigs. In addition to contracts negotiated in several regions of the United States (Colorado, North Dakota, Texas and Wyoming), in Saudi Arabia and in Mexico, Xtreme Coil markets proprietary, dual-purpose drilling rigs to existing customers and to potential customers in other international operating regions. Xtreme Coil drills with conventional drill pipe and larger coil to reach hydrocarbons in deeper horizons and is customizing rigs to perform deep coil well services. Xtreme Coil's common shares trade on the Toronto Stock Exchange ("TSX") under the symbol "XDC".

Reader Advisory

This news release contains forward-looking statements. More particularly, this news release contains statements about new operations, rig designs, customizations and expected future operations as well as estimates of operating days and rig utilization. Although Xtreme Coil believes the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Xtreme Coil can give no assurance they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this news release are made as of the date hereof and Xtreme Coil undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • Xtreme Coil Drilling Corp.
    Rod Uchytil
    President and Chief Executive Officer
    403 262 9500
    403 262 9522 (FAX)
    ir@xtremecoil.com
    www.xtremecoil.com
    or
    Xtreme Coil Drilling Corp.
    1402, 500 Fourth Avenue SW
    Calgary, Alberta T2P 2V6