Savanna Inks $63.4M Rig Supply Deal for Australia's East Coast LNG Project

Savanna Energy Services Corp. (Savanna) announced Tuesday that it has signed a contract to expand its drilling operations in Australia. Savanna will deploy four Top Drive Single (TDS) drilling rigs to operate in Queensland for an existing customer to support their east coast LNG (liquefied natural gas) project. The new design TDS 2000 and TDS 3000 rigs are under multi-year take-or-pay contracts with the first rig expected to begin operations in 1Q 2016. The capital cost of the four new TDS drilling rigs will be allocated to Savanna’s 2015 and 2016 capital programs, and will aggregate $63.4 million.

“We see this latest contract award as further endorsement of the people, equipment and infrastructure we have introduced to Australia over the past 5 years,” said Ken Mullen, Savanna’s president and CEO. “We continue to experience strong utilization of our existing equipment, are very focused on delivering the additional equipment contracted over the past year, and see strong opportunities for additional business growth in Australia in the future. Australia remains a strong diversification platform for Savanna, with market forces distinct from those currently impacting North America.”

Currently, Savanna has five drilling rigs and five workover rigs operating in Australia. Savanna is in the process of deploying four additional workover rigs and three flush-by units under long-term take-or-pay contracts. These new builds will be operational by 1Q 2015 with the majority of the rigs in the field by year-end 2014.

The remainder of Savanna’s current capital program is focused on new-build opportunities to increase the depth and capacity of its drilling fleet, expanding Savanna’s offering of deep double and triple drilling rigs. Savanna remains on schedule to deploy one heavy double drilling rig for Canada in 4Q 2014 and three VELOX triple drilling rigs for the U.S. in 4Q 2014 and 1Q 2015, all under long-term contracts.

Savanna is a leading North American and Australian contract drilling and oilfield services company providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading aboriginal relationships.

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