Xtreme Coil is responding to North American market demand for advanced technology drilling services with our Coil Over Top Drive® ("COTD®") rigs which have proven capability to perform with both conventional and coiled tubing drilling in a range of technically challenging projects.
New Contracts for Eight Rigs in the Rocky Mountain Region
Under the terms of recently executed contracts with two customers, Xtreme Coil will provide eight rigs to current and new projects in the United States oil and natural gas producing regions of Colorado and Wyoming.
A recently finalized contract with a large independent exploration and production ("E&P") company encompasses 7,450 rig days and involves renewal terms for three drilling rigs currently operating in the Denver-Julesburg Basin plus four additional rigs which we expect to deploy over the next six months to the Rocky Mountain region from the Chicontepec project in Mexico. We expect the first of the additional four drilling rigs to begin operations in June 2010.
The eighth rig, an XTC 200DT located in Wyoming and contracted to another large independent E&P company, commenced drilling in May under terms of a new multi-well project that includes both new and re-entry wells.
Xtreme Coil's three rigs operating in the Rocky Mountain region drilled more than 1.8 million feet during 2009. The record well to date with these three rigs is 52.5 hours from spudding of an 8,500 foot well to spudding of the next well. ("Spudding" or "spud" are drilling terms that describe the point at which the rig actually begins drilling a well. "Spud to spud" describes the time the rig begins to drill the initial well, through to the completion of drilling, followed by rig-out, rig move, rig-up and the start of drilling the next well.)
Middle East Operations
Xtreme Coil's newest rig model, the XTC 200DTR(PLUS), commenced pre-drilling operations for the deep re-entry project in Saudi Arabia and the first well is expected to spud following final testing of the integrated services package provided by a number of participating contractors. The second drilling rig committed to this project is in transit to Saudi Arabia and expected to arrive in late May. We expect the second rig will be ready to commence operations in 2010 third quarter.
During 2010, Xtreme Coil will continue to advance strategic opportunities for contracts that expand the Company's operations within, and beyond, North America.
At present, eight rigs remain in Mexico and, after scaling back drilling staff, our operations and technical team in Poza Rica continue to evaluate opportunities to place rigs in other regions of Mexico. The two drilling rigs that have returned from Mexico to the United States are now in south Texas where they are being prepared for redeployment to the Rocky Mountain region of the United States. Xtreme Coil anticipates redeploying two further rigs to the United States during 2010, which would leave six drilling rigs in Mexico.
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