Precision Drilling Expands International Operations

Precision Drilling Corp. is strengthening international operations with a new contract to provide well services in Yemen and an expansion of drilling activities in Mexico.

Precision signed a letter of intent with Nexen Inc. to provide completion services for 220 wells at Nexen's prolific oil production operation in Yemen, Precision chief executive Hank Swartout said. Swartout did not reveal the value of the contract, saying the two companies would issue a joint statement when details are finalized. "That's a very good contract for us because it's for three years," he said.

The company is also sending two additional rigs to Mexico to drill about 60 wells for Pemex on top of last year's $270 million contract for 240 wells in the Burgos natural gas field in the northeastern part of the country. The company currently operates five rigs there. In addition, Precision, which is ahead of schedule with its Mexican drilling, will soon begin talks with Pemex to expand the original contract by about 150 wells, he said. "With the addition of two rigs, which are not part of the contract -- it's virtually a 'contract B' with an extension and a 'contract A' with an extension -- we're solid in Mexico for years to come," he said.

The company has a target to generate half its revenues from international operations by 2005, up from about 30 percent today. With 225 drilling rigs at home, it currently provides as much as 40 percent of oil field services in Canada, a market share it believes has reached its peak, executives said.


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