|By Marketwired .||
|January 20, 2014 04:42 PM EST||
CALGARY, ALBERTA -- (Marketwired) -- 01/20/14 -- Xtreme Drilling and Coil Services (TSX:XDC) ("Xtreme" or the "Company") recently finalized its 2014 capital expenditure budget of planned expenditures of approximately $55.0 million. It includes $17.8 million for two new build extended reach XSR coiled tubing units and the purchase of long lead time items for two next generation XSR coiled tubing units. Approximately $26.8 million will be utilized for sustaining expenditures and spare component capital and to upgrade three rigs for new contracts both domestically and internationally. The remaining $10.5 million is allocated to purchase the remaining 20% interest from the Company's Saudi Arabian joint venture partner. In addition the Company anticipates approximately $2.0 million carry forward from Xtreme's 2013 capital spend program.
Chief Executive Officer, Tom Wood, commented, "In 2014 we want to continue the momentum we have started over the past twelve months at Xtreme. The market acceptance of both our tier 1 XDR drilling rig fleet and leading edge technology XSR 2 5/8" coiled tubing fleet is very encouraging. In the XSR coiled tubing segment, the customer demand for our services in South Texas now consistently exceeds our capacity. In order to meet this market demand as quickly as possible, we will build two new units which we will deploy in the second half of 2014. In parallel, we are working on the engineering for a new generation design of our proprietary 2 5/8" AC electric coiled tubing units. We will begin purchasing long lead time items for this new design and our intent is to deploy an additional two units of the next generation XSR units in 2015."
On December 27, 2013 the Company finalized a new $150.0 million credit facility with a syndicate of banks led by Wells Fargo. The new arrangement is three years in term and includes the ability to increase the line to $175.0 million should the Company need the additional capacity. It is anticipated that the 2014 capital budget will be funded entirely through operating cash flow; however, this facility will provide additional liquidity as required.
Xtreme recently entered into a letter agreement for two XDR 300 drilling rigs on a multi-year drilling contract in an international market. Additional details will be disclosed upon final execution of the customer contract. The operation is expected to begin in the third quarter of 2014 and the modification expenses for the two rigs are included in the 2014 capital budget.
This agreement provides a long term solution for these two 300 series rigs as they are optimal for the contracted market based on our AC technology and fast moving capabilities. The two rigs should complete their existing contracts in Colorado in February and then begin modifications and mobilization.
This press release contains forward-looking statements. More particularly, this press release contains statements concerning commencement of operations. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
About Xtreme Drilling and Coil Services
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.
Currently Xtreme operates two service lines: Drilling Services and Coil Services 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.