CanElson Announces Purchase of Three Drilling Rigs and Operational Update

Marketwired

CALGARY, ALBERTA--(Marketwired - July 22, 2013) - CanElson Drilling Inc. ("CanElson" or the "Company") (CDI.TO) announces that it has entered into an agreement to purchase an AC electric tele-double pad drilling rig, two single rigs, spare equipment as well as land and building located in Leduc, Alberta from Calmena Energy Services Inc. for total consideration of $15.0 million (the "Acquisition"). All of the rigs are fully crewed, currently contracted and two are currently operating in Alberta. The transaction is expected to close on July 24, 2013 with an effective date of July 19, 2013.

"With the addition of the rigs including retaining the dedicated and experienced field personnel, the Acquisition expands the Company's service offering to provide additional pad drilling services and horizontal oil drilling with new customers," said Randy Hawkings, President and CEO. "Additionally, historical financial performance of these rigs is less than 3 times EV to EBITDA, making the acquisition very accretive in keeping with the Company's strategy."

Second Quarter 2013 Operational Update

CanElson is also providing an update for operations in Canada and the United States during the second quarter of 2013. In Canada the number of operating days and utilization was lower with an extended spring break up period due to higher than normal precipitation levels and heavy snow pack. In the United States the number of operating days increased due to a higher average rig fleet size as well as certain of the North Dakota rig fleet operating through spring break up.

Results of operations for Canada and the United States during the second quarter are as follows:

    Canada   United States
    Three months ended June 30,   Three months ended June 30,
    2013 2012 % change   2013 2012 % change
Operating days (spud to rig release)   272 419 -35%   1,157 825 40%
                 
Average gross rig fleet size   22.0 21.0 5%   16.2 11.9 36%

Canadian Utilization and United States utilization averaged 13% (Q2 2012: 26%) and 79% (Q2 2012: 71%), respectively, for the second quarter of 2013.

About CanElson

CanElson operates contract drilling rigs in Canada, the US and Mexico for oil and natural gas exploration and development companies. CanElson also assembles new drilling rigs at a facility in Nisku, Alberta, operates contract oil and gas service rigs in Mexico, and operates a CNG transportation and related services business. CanGas is a Calgary-based CNG transport company and a North American leader in the development and utilization of containerized natural gas transport. More information on CanElson can be found on its website: www.canelsondrilling.com.

FORWARD-LOOKING INFORMATION

This press release contains certain statements or disclosures relating to CanElson that are based on the expectations of CanElson as well as assumptions made by and information currently available to CanElson which may constitute forward-looking information under applicable securities laws. In particular the statements pertaining to the expected closing date of the Acquisition and the expectation that the relationships with the operators of the drilling rigs being purchased will continue contain forward-looking information. Many factors could cause the performance or achievement by CanElson to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information. CanElson's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. CanElson disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Contact:
CanElson Drilling Inc.
Randy Hawkings
President and CEO
(403) 266-3922

CanElson Drilling Inc.
Robert Skilnick
Chief Financial Officer
(403) 266-3922
www.canelsondrilling.com

Rates

View Comments (0)