China North East Petroleum reported that its oilfield services subsidiary, Song Yuan Tiancheng Drilling Engineering Co. Ltd. ("Tiancheng"), has signed a contract with PetroChina's Jilin ("PTR") branch to drill 30 new wells in PTR's MIN 52 oil field.
Drilling of the 30 wells is expected to commence in January 2010 with an expected completion date in June 2010. The value of this contract with PTR will depend on the drilling depth of each of the 30 wells drilled.
"We are pleased to sign this new drilling contract with PTR, which is our first since we acquired this business in September 2009," commented Mr. Hongjun Wang, President of China North East Petroleum. "This assignment to drill 30 new wells is a standard order from PTR and our other oilfield services customers. Most of Tiancheng's drilling contracts generally range between 20-40 installed oil wells. Tiancheng's drilling utilization rate is currently at capacity in the 2009 fourth quarter and we have existing drilling contracts that will carry over into 2010. We remain focused on maximizing Tiancheng's utilization rates as we head into the New Year and expect that our total number of drilling rigs along with the varied drilling depths of the rigs in our portfolio can lead to solid results in our services business next year. We are encouraged with our progress and are hopeful that we'll have additional drilling contracts to announce in the future."
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