Welcome!

News Feed Item

CanElson Announces A New Drilling Rig Commitment, A First Nations Partnership and Strong Performance in the Fourth Quarter

CALGARY, ALBERTA -- (Marketwire) -- 01/07/13 -- CanElson Drilling Inc. ("CanElson" or the "Company") (TSX:CDI) today provided an update on recent activities, including a new drilling rig commitment, a First Nations partnership agreement and strong performance compared with the Canadian and US oil services industry in the fourth quarter of 2012. CanElson also announced an update on progress with its bi-fuel drilling rigs initiative.

"We continue to expand our footprint in our core areas of operation," said Randy Hawkings, President and CEO. "Our recent activities demonstrate our ability to deploy and operate our drilling rigs at industry leading levels of efficiency while finding unique ways to work with other groups for our mutual benefit."

New Texas Drilling Rig

CanElson has entered into a two-year commitment and will receive a cash advance for a new drilling rig with a customer in the Permian Basin of West Texas. The new contract was obtained in part due to CanElson's commitment and approach to health and safety. The new rig (Rig #36) is expected to cost approximately $8 million. It will be assembled at CanElson's facility in Nisku, Alberta and is scheduled for delivery in March 2013.

As previously disclosed, CanElson is also assembling Rig #35 at Nisku under a long term contract with a West Texas producer. Rig #35 is scheduled for delivery in January 2013. When Rig #35 and Rig #36 are both deployed, CanElson will have 12 rigs in West Texas, double the number it had at end of January 2012, significantly strengthening the Company's position in the most active drilling basin in North America.

The Company's previously announced capital budget included provision for $4.5 million of long lead items for Rig #36. CanElson will now order long lead items for another new rig (Rig #37). Pending a signed contract, construction of Rig #37 is possible in Q2, 2013. CanElson continues to require commitments from operators prior to full assembly of additional rigs. As a result, CanElson will expand its previously announced capital program by approximately $8.0 million to complete rig #36 and purchase the long lead items for Rig #37.

First Nations Partnership

Through negotiations with File Hills Qu'Appelle Tribal Council ("FHQTC"), CanElson entered into a partnership with FHQTC Developments Limited Partnership. Each of CanElson and FHQTC Developments Limited Partnership own a 50% interest in a limited partnership that owns one existing CanElson drilling rig. CanElson will continue to operate the drilling rig as the General Partner.

CanElson believes this partnership will provide it with an opportunity to gain further access to an expanded labour force while also providing FHQTC with an opportunity to participate in the economic upside of the oil and gas drilling business in Saskatchewan. CanElson will pursue similar opportunities with other First Nations in situations where all parties involved can benefit.

"This partnership is an excellent business, training and employment opportunity for our community members," said Edmund Bellegarde, President of FHQTC.

During the past three years, CanElson has established various forms of partnership relationships and training initiatives to better support growth in all the countries in which it does business. It is CanElson's belief that it can execute a growth strategy that provides top decile returns in a socially responsible fashion.

Fourth Quarter 2012 Operational Update

CanElson is also providing an update for operations in Canada and the US during the fourth quarter of 2012. In both geographic areas, CanElson has outperformed the industry as a whole amid subdued markets.

In Canada, CanElson achieved utilization rates that were 1.5 times better than current industry estimates for the fourth quarter. In the United States, CanElson has seen a 38% increase in operating days for the fourth quarter, relative to the same period in 2011, even though the US industry has seen an approximate 12% decline in the land drilling rig count year over year.

Results of operations for Canada and the United States during the fourth quarter are as follows:


                                 Canada              United States          
                              Three months ended         Three months ended 
                                     December 31,               December 31,
                          2012     2011 % change     2012     2011 % change 
                      ------------------------------------------------------
Operating days (spud                                                        
 to rig release)         1,300    1,436       -9%   1,068      772       38%
                                                                            
Average gross rig                                                           
 fleet size               22.3     20.3       10%    13.9     10.0       39%
----------------------------------------------------------------------------

Mexican Operations

The customer of CanElson's Mexico joint venture has signed its production sharing contract with PEMEX. Through its Mexico Joint Venture, CanElson expects that this new contract should provide it with an opportunity to expand the service offering and increase exposure to performance-related contract terms in 2013 and beyond.

Bi-Fuel Drilling Rigs Progress

CanElson's subsidiary CanGas Solutions continues to advance previously announced bi-fuel (natural gas and diesel fuel) drilling rig initiatives in Alberta and Saskatchewan. The objective of these initiatives is to displace as much diesel fuel as possible with lower-cost natural gas on CanElson drilling rigs, for the benefit of both CanElson and its contract-drilling customers.

In the fourth quarter of 2012 CanGas began delivery of compressed natural gas (CNG) by truck transport to fuel two bi-fuel CanElson drilling rigs in Alberta. The rigs are operated by CanElson under long-term contract to an oil and gas producer. CanGas is also delivering CNG by truck transport to several of CanElson's rigs in Saskatchewan. Conversion of CanElson's Saskatchewan fleet is ongoing. CanElson is using temporary gas compression facilities as a supply source while a permanent facility is developed under a previously disclosed agreement. The permanent facility is scheduled to become operational in 2013.

About CanElson

CanElson operates contract drilling rigs in Canada, the US and Mexico for oil and natural gas exploration and development companies. CanElson also assembles new drilling rigs at a facility in Nisku, Alberta, operates contract oil and gas service rigs in Mexico, and operates a CNG transportation and related services business. CanGas is a Calgary-based CNG transport company and a North American leader in the development and utilization of containerized natural gas transport. More information on CanElson can be found on its website: www.canelsondrilling.com.

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to CanElson that are based on the expectations of CanElson as well as assumptions made by and information currently available to CanElson which may constitute forward-looking information under applicable securities laws. In particular, statements pertaining to receipt of a cash advance; the expected cost to construct rig #36; the expected location and timing of deployment of new rig build #35 and #36; the expected timing for assembly of Rig #37; the expectation that the partnership with FHQTC will provide an opportunity to gain further access to an expanded labour force while providing FHQTC an opportunity to participate in the economic benefits of a drilling rig business; the expectation that CanElson can execute a growth strategy that provides top decile returns in a socially responsible fashion; the expectation that CanElson should have an opportunity to expand its services in Mexico; and the timing for the permanent compression facility in Saskatchewan to become operational in, contain forward looking information or achievements that may be expressed or implied by such forward looking information. Many factors could cause the performance or achievement by CanElson to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking information. CanElson's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. CanElson disclaims any intention or obligation to publicly update or revise any forward looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Contacts:
CanElson Drilling Inc.
Randy Hawkings
President and CEO
(403) 266-3922

CanElson Drilling Inc.
Robert Skilnick
Chief Financial Officer
(403) 266-3922

CanElson Drilling Inc.
700, 808 - 4th Avenue SW
Calgary, Alberta T2P 3E8
www.canelsondrilling.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.