CanElson signs five drilling rigs to long term contracts

November 05, 2014

CanElson signs five drilling rigs to long-term contracts

CALGARY, Alberta -- CanElson has signed five drilling rigs to long-term contracts with existing customers, including three previously disclosed and under construction and two additional new build mechanical heavy duty telescopic doubles.

CanElson's deployment of new rig builds is as follows:

Rig 49 (previously announced, Alternating Current Electric (AC) tele-double): committed to a long-term contract and expected to commence operations in British Columbia in fourth-quarter 2014.
Rig 103 (previously announced, AC triple): committed to a long-term contract and expected to commence operations in Texas in first-quarter 2015.
Rig 104 (previously announced, AC triple): committed to a long-term contract and expected to commence operations in Texas in third-quarter 2015.
Rig 47 (new announcement, tele-double): committed to a long-term contract and expected to commence operations in Texas in third-quarter 2015.
Rig 48 (new announcement, tele-double): committed to a long-term contract and expected to commence operations in Texas in fourth-quarter 2015.

All five contracts are long term in nature, and meet the company's economic thresholds. The four rigs which are to be deployed to the Permian basin of Texas will work year round. In order to accommodate specific customer and geographic requirements, Rig 103 and Rig 104 are now expected to commence operations in the first quarter of 2015 and the third quarter of 2015, respectively.

The total incremental capital required to deliver the two new build tele-double rigs is anticipated to be approximately $22 million. CanElson anticipates that it can fund the construction of the aforementioned drilling rigs, the remainder of its capital program which is not related to expansion, as well as the current quarterly dividend through cash flow and existing credit facilities.