Trinidad Drilling has agreed to build two new rigs for delivery into operations in 2011.
"Demand for high quality, modern equipment has continued to increase and contract terms have now moved to a point where it is attractive for us to build new equipment," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer. "The rigs we are adding to our fleet fit well with our strategy of deep, technically advanced equipment and we expect that they will remain competitive long after their initial contracts expire."
Rig No. 139 will be an 18,000 foot (5,500 meter) triple rig with 1,500 horsepower and equipped with Trinidad's industry-leading technology and automation. The rig is expected to cost approximately $18 million and be operational in the Eagle Ford Shale in Texas in the second half of the year. The rig is backed by a three-year, take-or-pay contract that guarantees 100% utilization throughout the duration of the contract.
Rig No. 57 will be an 18,000 foot (5,500 meter) triple rig with 1,500 horsepower and is being built to work in Steam Assisted Gravity Drainage (SAGD) applications in north-eastern Alberta. In addition to Trinidad's usual automation and technical advancements, this rig will include a system that provides improved fluid handling ability while drilling in a pad environment, and a new pipe handling system that removes the need for a crew member to be positioned in the derrick, increasing both the performance and the safety of the rig's operations. Trinidad expects that it will cost approximately $20 million to build the rig and that it will be operational towards the end of 2011. The rig is under a four-year, take-or-pay contract that guarantees a minimum of 1,200 days over a four year period which equates to an 82% average utilization over the term of the contract.
In addition to these two newly-announced rigs, Trinidad is currently building a natural gas powered rig for operations in the Horn River in north-eastern British Columbia. The Company expects that the construction of the three new rigs, the completion of the 2010 rig construction program and capital enhancements planned for a small number of existing rigs will total approximately $80 million of capital expenditures in 2011.
Following the completion of the rigs being constructed in 2011, Trinidad will have 122 drilling rigs with 62 rigs in the US, 57 rigs in Canada and 3 rigs in Mexico. In addition, Trinidad has 22 service rigs, 20 preset and coring rigs and five barge drilling rigs.
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