Xtreme Drilling and Coil Services
TSX : XDC

Xtreme Drilling and Coil Services

January 12, 2015 17:42 ET

Xtreme Drilling and Coil Services Announces Capital Budget and Fourth Quarter Operations Update and Conference Call Details

CALGARY, ALBERTA--(Marketwired - Jan. 12, 2015) - Xtreme Drilling and Coil Services ("Xtreme", the "Company") (TSX:XDC) is pleased to provide an update to its anticipated 2015 capital budget as well as fourth quarter operations, along with an announcement of the date for the Q4 2014 earnings release and conference call.

Capital Budget Update

Based on current market conditions, Xtreme has made the decision to build only one more of the six planned new XSR units scheduled for delivery in 2015 and 2016. This unit will be delivered in April 2015, and in addition to two units that were delivered in November and January, will bring the total United States XSR coiled tubing fleet to seven units. Based upon market conditions, the Company has the option to continue the build program at a later time.

With the reduction in new build XSR units, the anticipated 2015 capital budget will decrease from $60 million USD to $23 million USD. This spend level is inclusive of maintenance capital for both the XDR drilling fleet and XSR coil services segment as well as the remaining capital on the XSR build program.

Fourth Quarter Update

For the fourth quarter of 2014, Xtreme had total operating days of 2,053 which resulted in a utilization rate of 83% for the fleet of 21 XDR drilling rigs and 8 XSR coiled tubing units.

The Drilling Segment achieved utilization of 85% on 1,645 operating days. This was comprised of an 85% utilization rate for the 16 rig United States XDR fleet as well as a 74% utilization rate for the three rig Canadian XDR fleet and 100% utilization for the two rig India operation. Overall, the US XDR rigs had 1,256 operating days as compared to 1,423 in the third quarter. The Company's three Canadian drilling rigs operated for 206 days in the fourth quarter which was a decrease from 268 days in the third quarter of 2014. In India the two XDR 300 rigs totaled 184 operating days for the period.

For the third quarter, the Coil Services Segment achieved utilization of 76% on 408 operating days. This was comprised of a 98% utilization rate for the two XSR units in Saudi Arabia and an 80% utilization rate for the five actively marketed US XSR units. Inclusive in the total XSR utilization is one additional unit that is marketed internationally but not currently working. The US division had a total of 227 operating days which was 30 more operating days than the third quarter. In early December the first of three new build XSR units was deployed to the field and operated for 16 days. The second unit should deploy to the field in the second half of January, with the third unit commencing operation in early April.

At quarter end 18 XDR rigs were earning revenue (14 in the United States, two in Canada and two in India) and seven XSR units were operating, five in the US and two in Saudi Arabia.

Xtreme anticipates that activity will decrease during the first quarter of 2015. It is likely that at least one U.S. XDR rig, which is completing a one year term contract, will not return to work. In addition, three XDR rigs, which finish multi-year term contracts in the United States, will renew on a well to well basis at rates substantially below the previous contract. The Company is proactively managing costs through this downturn in activity levels. Recent reductions in operations support and administrative personnel, along with the announced decrease in capital spending, are initial actions taken by the Company to operate within generated cash flow for 2015.

Fourth Quarter 2014 Results and Conference Call

The Company expects to announce fourth quarter 2014 financial and operating results after market close on Thursday, March 12, 2015 with a follow‐up conference call planned for Friday, March 13, 2015 at 10:00 am MDT, 11:00 am CT. Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, Chief Financial Officer, and will answer questions from analysts and investors.

To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone.
+1 800-355-4959 (North America Toll‐Free) or +1 416-340-2216 (Alternate)
Webcast Link: http://www.gowebcasting.com/6197
An audio replay of the call will be available until Friday, March 20, 2015. To access the replay, call +1 800‐408‐3053 or +1 905‐694‐9451 and enter pass code 2268273.

Reader Advisory

This press release contains forwarding looking statements. More particularly, this press release contains statements concerning commencement of operations and anticipated capital spending. Although the Company believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because the Company can give no assurance that 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 press release are made as of the date hereof and the Company undertakes no obligations 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.

About Xtreme

Xtreme Drilling and Coil Services Corp. ("XDC" on the Toronto Stock Exchange) designs, builds, and operates a fleet of high specification drilling rigs and coiled tubing well service units featuring leading-edge proprietary technology including AC high capacity coil injectors, deep re-entry drilling capability, modular transportation systems and continuous integration of in-house advances in methodologies.

Currently Xtreme operates two service lines: Drilling Services (XDR) and Coil Services (XSR) under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States, India and Saudi Arabia. For more information about the Company, please visit www.xtremecoil.com.

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