TTS Signs $91.3M Land Rig Contract

Through its subsidiary Sense EDM AS (TTS) in Kristiansand, TTS Marine ASA’s Drilling Equipment division has entered into a contract with Ability Drilling ASA (Ability) for delivery of land rigs worth approximately $91.3 million.

This new agreement with Ability concerns delivery of five onshore drilling rigs, the first with delivery in August 2009 and the last in April 2010. The land rig concept is based on offshore technology as far as control, automation, environment and security concerns, and thus represents high-end technology for land rigs.

TTS has previously signed contracts with Ability for delivery of 4 onshore drilling rigs and two work-over rigs. In total TTS have nine onshore rigs and two work-over rigs in order, with at total contract value of approximately $201 million.

Ability and TTS have agreed upon some modifications of the drilling rig concept adapted to the operations of Ability. The companies have also agreed upon new delivery dates. The first rig will in March be disassembled and moved to final site for testing before going into operation.

In connection with announcement of the results per Q3, TTS Marine ASA informed that Sense EDM’s result was weak due to use of considerable recourses to further developing the company’s land rig concept. This will contribute to approximately zero EBIDA in Q4 for Sense EDM AS.

The new agreement with Abilty is strengthening the commercialization of the land rig concept further. The market potential for new contracts is promising.