China North East Petroleum Adds New Deep-Well Rig to Fleet

China North East Petroleum announced that its oilfield services subsidiary, Song Yuan Tiancheng Drilling Engineering Co. Ltd. ("Tiancheng") has ordered a 4,000 meter drilling rig to add to its operational fleet.

This new rig will be delivered this month and is expected to be fully operational by January 2010. Once the drilling rig is delivered, Tiancheng will have eight operational drilling rigs, including two with a drilling depth of 4,000 meters, three that can drill up to 3,000 meters and three with the ability to drill up to 2,000 meters.

Hongjun Wang, President of China North East Petroleum commented, "We believe the addition of a new deep well drilling rig is the right strategic move for our business at this time. PetroChina has recently decided to expand its oil refinery in the northern province of Jilin and their refining capacity is expected to increase to 10 million metric tons per year, or approximately 200,000 barrels a day, up from 7 million tons annually. PetroChina is a major customer of ours and we believe that a second deep-well rig in our fleet could allow us to drill deeper into the Jilin oilfield on their behalf, potentially benefiting both our drilling services and oil production segments."