Xtreme Drilling and Coil Services

October 11, 2011 08:00 ET

Xtreme Operations Update

CALGARY, ALBERTA--(Marketwire - Oct. 11, 2011) - Xtreme Drilling and Coil Services ("Xtreme") (TSX:XDC) provides an update regarding ongoing operations including commencement of coiled tubing services, rigs under construction and other corporate activities.

Operations Update

For 2011 third quarter, Xtreme estimates approximately 1,135 total operating days. During the third quarter, one new build XDR 500 rig commenced operations in North Dakota, an existing XDR 500 rig was being repositioned to North Dakota from Texas and one XDR 200 rig was stacked following completion of operations in Mississippi. The operating days contributed by these rigs during the period depended on timing in terms of completion of commitments and commencement of new operations.

At the end of the third quarter, Xtreme had 11 XDR rigs and one XSR rig operating in the United States ("US") and two XSR rigs operating in Saudi Arabia. Three XDR 200 rigs are presently stacked and not under contract. Further, we received notification from our customer regarding release of one XDR 200 rig following completion of the contracted workscope. Rig release is anticipated to occur during the month of November. Xtreme continues to evaluate other opportunities to deploy the XDR 200 rigs.

Xtreme's XDR 200 to XSR 200 conversion was completed during the 2011 second quarter and this rig was mobilized to North Dakota where it commenced operations in late August, initiating our Coil Services business division in the US. To date, this rig has performed two horizontal clean-out projects achieving greater than 14,000 feet with 2-5/8" coiled tubing in both cases. The first well had a tortuous well path and the coiled tubing reached lock-up at 15,540 feet which was the approximate depth predicted by the simulation program. During the second well, we experienced a programmable logic control ("PLC") issue which resulted in concluding the job before its completion. The PLC issue is now resolved and we are preparing the rig for its next project. We remain confident the XSR rigs are equipped with technology which differentiates their capabilities from that of our competitors.

Rigs Under Construction

Currently, Xtreme has under construction six XDR 500 rigs and five XSR 200 rigs. Completion of the first of these six XDR 500 rigs is still anticipated for October when it will be mobilized to its initial location. Two of the remaining five XDR 500 rigs are on schedule with completion anticipated during 2012 first quarter and delivery of the final three XDR 500 rigs expected during the 2012 second, third and fourth quarters. Thus, at the end of 2011 third quarter, the XDR rigs under construction for term contracts remain on schedule, on budget and expect to meet previously announced commitments.

Five XSR 200 rigs are being modified for use in Xtreme's Coil Services business. These trailerized rigs are being customized to provide deep coil servicing, projects which typically operate under call-out contracts. The XSR main rig structures are being constructed in Alberta and six twin-pumping units are being manufactured in Texas. Completion of the first XSR rig is still expected in October, following which it will be mobilized to North Dakota for final commissioning with pumps prior to commencing operations. We currently anticipate completing the construction of the remaining four XSR 200 rigs and pumping units before 2011 year-end. To date, we have incurred certain over-expenditures related to the XSR rig-build program, largely based on efforts to maintain delivery schedules. The additional expenditures are not anticipated to be material and will likely be less than five percent of the original estimated cost to construct the rig equipment.

2011 Third Quarter Results Release Date

Xtreme intends to release operating and financial results for the three and nine months ended September 30, 2011 after the markets close on Thursday, November 10, 2011. Xtreme's management expects to conduct a conference call to discuss 2011 third quarter results on Friday, November 11, 2011 and will announce call-in details later.

Reader Advisory

This news release 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 assets in the Company's current and future fleet. Although Xtreme believes expectations reflected in these FLS 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 FLS not to be correct, including risks and uncertainties inherent in Xtreme'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 and the six months ended June 30, 2011 filed on www.sedar.com and on Xtreme's website. 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 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.

About Xtreme

Xtreme Coil Drilling Corp. ("XDC" on the Toronto Stock Exchange) and its subsidiaries operate under the brand name Xtreme Drilling and Coil Services. Xtreme owns and operates a fleet of proprietary, dual-purpose deep capacity drilling rigs and coiled tubing well servicing units featuring the Company's patented COTD® designs. Xtreme offers oil and natural gas producers outstanding performance and efficiency through leading-edge technology. Currently, we are drilling under contracts in Colorado, North Dakota, Texas and Wyoming. Two deep coil service rigs are conducting re-entry horizontal drilling operations under a joint venture in Saudi Arabia and one is based in North Dakota to provide ultra-deep horizontal well post fracture cleanouts. For more information about the company, please visit www.xtremecoil.com.

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.
    #770, 340 - 12th Avenue SW
    Calgary, Alberta T2R 1L5