Savanna has received formal notification from its customer, a global integrated oilfield services company, regarding its 4 rig drilling contract in Chicontepec, Mexico. Savanna's customer has advised that it has received operator notification that the pace of drilling, and potentially the absolute number of wells to be drilled, under the contract pursuant to which Savanna's customer has been operating, has been reduced. The customer has advised Savanna that they will be releasing 2 of the drilling rigs upon completion of their current locations.
As a result of this reduction, the customer will demobilize the 2 released rigs, at their cost, to McAllen, Texas as soon as possible. The remaining 2 rigs will remain in service pursuant to the same terms as the original contract.
Savanna has initiated efforts to transfer the released rigs to other operating areas in North America, and anticipates that the rigs will be quickly redeployed. Given the depth capacity and efficiency of these 1200HP AC rigs, Savanna expects limited downtime on this equipment, however the rigs currently are uncommitted.
Savanna will continue to monitor expected activity levels in respect of the remaining 2 rigs in Mexico, and will assess their utilization, current and long term, with its customer on an ongoing basis. However, the operating situation in Mexico remains very unsettled.
This announcement has no impact on Savanna's current 2010 capital expansion program, nor any material affect on its ability to fund same.
Most Popular Articles
From the Career Center
Jobs that may interest you