SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

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
SYS-CON Media announced today that Sematext launched a popular blog feed on DevOps Journal with over 6,000 story reads over the weekend. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting an...
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
ScriptRock makes GuardRail, a DevOps-ready platform for configuration monitoring. Realizing we were spending way too much time digging up, cataloguing, and tracking machine configurations, we began writing our own scripts and tools to handle what is normally an enormous chore. Then we took the concept a step further, giving it a beautiful interface and making it simple enough for our bosses to understand. We named it GuardRail after its function - to allow businesses to move fast and stay sa...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cloudian, Inc., is a Foster City, California - based software company specializing in cloud storage software. The main product is Cloudian, an Amazon S3-compliant cloud object storage platform, the bedrock of cloud computing systems, that enables c...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...