Tesco Completes First Well Under Casing Drilling Contract

Tesco Corporation is pleased to announce that the purpose-built "Rig Alpha" has successfully completed its first well in the South Texas Lobo field. The first of three to be delivered under this contract, the rig demonstrated the substantial advantages of Tesco's Casing Drilling(TM) process. As they are seldom required to trip pipe, these purpose-built rigs are substantially smaller and equipped with approximately half the horsepower found on a conventional rig of equivalent depth capability. In addition, requiring only one third of the truckloads compared to its drill-pipe equivalent, the rig move was achieved in less than half the time required for a conventional rig move; this time is expected to improve substantially as the local trucking companies become more familiar with the new rig design. The move-cost savings are in addition to the drilling-cost savings that the operator expects to achieve with the Casing Drilling(TM) process.

Tesco is also pleased to announce that it has been contracted by a major independent operator to apply Casing Drilling(TM) technology to continuous coring operations. The client plans to drill a series of stratigraphic wells in a northeastern Alberta heavy oil deposit. The advantage of applying the Casing Drilling(TM) wireline deployment system is that it accelerates core retrieval and eliminates the risk of unscheduled events associated with the conventional process. Driller's Technology Corporation (DLR) will provide a Tesco-built Casing Drilling(TM) rig to ensure the operator enjoys the full advantage of this application of the technology.

Tesco has also been in discussion with operators who are interested in using its patented Casing Drilling(TM) process for continuous coring in coalbed methane and methane hydrate projects. We have noted that these two largely untapped hydrocarbon sources appear to be receiving a high profile around the world. Large deposits have been identified in both North America and in the Far East.