Enserco Signs 2-Year Contract in Arctic
Enserco Energy Service Company Inc. announces that its Production Services Division, Bonus Well Servicing, has signed a strategic alliance with Polar Energy Services, a private corporation based in the North West Territories of Canada. Bonus and Polar intend to offer well servicing and related services in the Inuvialuit Settlement Region, which encompasses the Mackenzie River Delta in the Canadian Arctic.
This alliance has led to the deployment of a service rig and 40-person camp under two-year contracts with two international exploration and production companies, which is expected to generate approximately $8 million in revenue. "Northern Canada is beginning to grow in strategic importance in North America's oil and gas industry," said John Hokanson, President and CEO, Enserco Energy Service Company Inc. "We see this strategic alliance as a strong foundation for future growth in the region."
Enserco's Drilling Services Division, H&R Drilling has successfully launched both of its new, 5,500 metre (18,000 feet) depth capacity drilling rigs into commercial operations. Rig No. 16, which was completed in late July, has been deployed near Grande Cache, Alberta, while Rig No. 17, commissioned in late August, will commence operations in the southern Alberta foothills on a 3 well program in late September. Two new 10,500 foot depth capacity rigs, which will be commissioned over the next several weeks, will proceed immediately to drilling contracts. Rig No. 18 has been signed to a two-year, minimum 250-day/year contract, while Rig No. 19 which is expected to arrive in early October, is contracted until March 2002. Hokanson commented that "our fleet of 30 drilling rigs, including these four new arrivals, are continuing to command solid rates due to their rig-up, moving and drilling efficiencies versus the much older equipment in these deeper markets."
Enserco is also announcing the deferral of certain capital spending into 2002. Enserco's capital expenditure budget for 2001 is now anticipated to total $75 million reflecting the deferral of three rig-assist coiled tubing units and one 4,000 metre drilling rig into 2002. Delivery on the Company's first rig assist coiled tubing unit was taken in mid July. The unit has now been successfully field tested and is being marketed for commercial operations. "We are comfortable with our internal growth program to date, however, we believe it is prudent to defer these additional projects until a clearer view of industry activity levels becomes available."
Enserco is an integrated energy services company providing production and drilling services to the North American oil and gas industry. Through its subsidiaries, Bonus Well Servicing Partnership and H&R Drilling Limited Partnership, the Company operates over 200 service rigs and 30 drilling rigs representing one of the industry's largest and most modern fleets. Enserco is included on the TSE 300 Index, and trades under the symbol ERC.