CALGARY, ALBERTA--(Marketwire - July 16, 2012) -
Increases Debt Capacity
Xtreme (TSX:XDC) has finalized an additional $10 million loan with HSBC Canada. The loan along with the existing facility increases the debt capacity of the company to $160 million. The additional financing will be used for general corporate purposes as well as to complete the remaining two XDR 500 drilling rigs that are in process and scheduled to deploy on three year term contracts in August and October.
At this time the company does not anticipate going forward with the previously announced debt instrument. After exploring the market, management determined that the combination of the existing credit facility and the new loan provides the liquidity needed at terms that are more favourable to the company.
In addition to the new build program the company upgraded another XDR 400 to an XDR 500 rig bringing the total XDR 500 rig count to eleven by October 2012. The modifications began in May and were completed in July. This was the third upgrade of an XDR 400 to a 500 and based on the success of the previous upgrades, the rig was contracted on a long term contract for the Bakken shale play in North Dakota. The company now has five XDR 500's working in the Bakken on long term commitments.
From the initial announcement in October 2010 to completion of the capital build program in October 2012 Xtreme will have added eight XDR 500 rigs on long term contract, converted three XDR 400 rigs to XDR 500 rigs and have built five XSR coiled tubing service units. This represents an increase of 81% as the fleet will consist of 11 XDR 500, 2 XDR 400, 4 XDR 300, 4 XDR 200 drilling rigs and 8 XSR coiled tubing units.
Amendment to Credit Facility
Xtreme executed on June 29, 2012 a second amending agreement to its credit agreement with its lenders. This amendment modifies the funded debt to EBITDA covenant ratios for the second, third and fourth quarters of 2012. The remaining terms of the credit agreement are substantially unchanged.
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.
Xtreme operates two service lines: Drilling Services (XDR) and Coiled Tubing 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.
This news release contains forward-looking statements. Although Xtreme believes expectations reflected in these statements are reasonable, readers should not place undue reliance on them because Xtreme can give no assurance they will prove to be correct. There are many factors that could cause these statements not to be correct, including risks and uncertainties inherent in the Company's business.