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
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
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.
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...