|By Marketwired .||
|June 12, 2014 04:16 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 06/12/14 -- Due to increasing demand, Xtreme Drilling and Coil Services (TSX: XDC) ("Xtreme" or the "Company") announces a $54 million capital expansion program that will increase the XSR coiled tubing fleet by an additional six units. These new units, along with the two XSR units currently under construction, will more than double the size of the company's technically advanced coiled tubing service fleet over the next 18 to 24 months. This expansion from four to twelve XSR Units in the USA will help Xtreme meet demand for its ultra-deep coiled tubing completion services in the Eagle Ford Shale while also initiating Xtreme's strategic plan to expand its extended-reach coiled tubing service offering into new areas. As part of the plan, the Company intends to deploy several of the new XSR units to other expanding shale horizontal markets.
Xtreme previously announced a capital budget of $62 million for 2014. This included two new-build XSR coiled tubing units, which remain on schedule to commence operations in the Eagle Ford in the fourth quarter of 2014. With today's announcement the capital budget for 2014 has been increased to $70 million. In addition, the currently anticipated 2015 and 2016 capital expenditures related to these new units are estimated to be $33 million and $13 million respectively.
The Company is expecting this growth can be funded exclusively through operating cash flow and does not anticipate the need to permanently increase debt levels. Currently, Xtreme has ample liquidity in the form of operating cash flow, cash on hand and over $30 million available on the Company's $150 million revolving credit facility.
"With Xtreme's record-setting reach and track record of outstanding service, we have quickly established ourselves as a leader in coiled tubing completions in the Eagle Ford," Chief Executive Officer Tom Wood said. "As the market for our deep-reach coiled tubing services continues to grow, the expansion of our XSR fleet represents the next exciting phase of growth for the Company. We are confident that our technology deployed in other horizontal plays will provide a powerful new tool for our customers as they push the expanding market to new lengths."
Xtreme currently operates four XSR units in the Eagle Ford, equipped with 2-5/8" coiled tubing and technologies such as AC 200,000 lb. injectors and proprietary PLC-based controls. They are the largest and highest-specification coiled tubing units in North America, offering superior reach, efficiency and improved well productivity for operators in the Eagle Ford. Xtreme's industry leading coil technology is also utilized in Saudi Arabia where the Company operates two additional XSR coiled tubing units on long term contracts that perform deep horizontal re-entry coiled tubing drilling.
This press release contains forwarding looking statements. More particularly, this press release contains statements concerning commencement of operations and the capital required to fund growth. 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.
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 Drilling operates two service lines: Drilling Services (XDR) and Coil Services (XSR) 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.