CALGARY, ALBERTA--(Marketwired - Oct. 30, 2013) - Xtreme Drilling and Coil Services (TSX:XDC) is pleased to provide a third quarter operations update along with an announcement of the date for the Third Quarter 2013 earnings release and conference call.
Third Quarter Update
For the third quarter of 2013 Xtreme had 2,062 total operating days which resulted in a utilization rate of 83% for the fleet of 21 XDR drilling rigs and 7 XSR coiled tubing units.
The Drilling Segment achieved utilization of 89% on 1,724 operating days. This is comprised of a 91% utilization rate for the 18 rig US XDR fleet and 78% for the three rig Canadian XDR fleet. For the quarter, the Coil Services Segment achieved utilization of 61% on 338 operating days. This is comprised of a 99% utilization rate for the two XSR units in Saudi Arabia and a 42% utilization rate for the four available XSR units in the US. The Company actively marketed only three of the four available US XSR units for the quarter and averaged 17.1 operating days per month on each unit.
While operating days increased during the quarter, extensive rain and flooding in the core operating area of Colorado led to an increase in downtime due to flooded locations, poor road conditions, permitting issues and water related equipment failure. With 55% of the XDR fleet operating in Colorado the impact in September was meaningful as operating days decreased by 29, or 6% from the previous month. Most of the issues and expenses occurred in the third quarter and it is not anticipated that material additional expenses will be incurred in the fourth quarter. In addition, the Company had increased repair and maintenance expenses in the third quarter related to the re-activation of a rig that had been idle in Wyoming for almost two years.
Coil Services had a strong quarter as operating days increased by 41% from the second quarter in the US XSR division. The performance in the quarter was strong enough to merit activating the fourth and final XSR unit in South Texas. It is anticipated that operations will begin in early December on this unit. Customer demand remains strong in the fourth quarter as current bookings indicate strong activity in a historically slower period.
In Saudi Arabia, the Company executed a six month renewal on one of the XSR units at quarter end while the second unit remains on a three year contract. Operating margins increased based on the improved pricing that took effect with the new contracts during the third quarter. The Company continues to negotiate the purchase of the 20% interest of the joint venture partner in Saudi and anticipates finalizing the transaction during the fourth quarter.
Tom Wood, CEO of Xtreme, commented on third quarter activity "We are pleased with our performance this quarter in spite of some very difficult operating conditions for the drilling business. In Colorado we had issues related to significant rainfall and flooding. This will impact operating margins for the quarter. However, all of the issues are now behind us and we are focused on a strong finish to 2013. Our fourth ultra-deep XSR coiled tubing unit is set to deploy with continued strong acceptance in the Eagle Ford. We were encouraged as operating revenue per day increased again in our US XSR business. We are commanding a significant premium over conventional units thanks to the high efficiency, performance and value add our technology bring to our clients. This is in the face of several competitors discontinuing operations in South Texas. The adaptation of our world class technology continues to set the standard for long reach coiled tubing operations."
At quarter end 19 XDR rigs were working with another on stand-by payment and five XSR rigs were operating, three in the US and two in Saudi Arabia.
Third Quarter Results and Conference Call
The Company expects to announce 2013 third quarter financial and operating results after market close on Tuesday, November 5, 2013 with a follow‐up conference call planned for Wednesday, November 6 at 9:00am MST, 10:00am 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, or click on the webcast link below.
+1 866-226-1798 (North America Toll‐Free) or +1 416‐340-2220 (Alternate)
Webcast link: http://www.gowebcasting.com/4945
An audio replay of the call will be available until Tuesday, November 13, 2013. To access the replay, call +1 800‐408‐3053 or +1 905‐694‐9451 and enter pass code 4828220.
This press release contains forwarding looking statements. More particularly, this press release contains statements concerning commencement of operations. 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.
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 and Saudi Arabia. For more information about the Company, please visit www.xtremecoil.com.