Wells Fargo Leads $150MM Xtreme Facility
Xtreme Drilling and Coil Services announced the company finalized on December 27, 2013 a new $150 million credit facility with a syndicate of banks led by Wells Fargo. The three-year term includes the ability to increase the line to $175 million should the company need the additional capacity. It is anticipated that the company’s 2014 capital budget will be funded entirely through operating cash-flow; however, the facility will provide additional liquidity as required.
Xtreme recently finalized its 2014 capital expenditure budget of planned expenditures of approximately $55 million. It includes $17.8 million for two new build extended reach XSR coiled tubing units and the purchase of long lead time items for two next-generation XSR coiled tubing units. Approximately $26.8 million will be utilized for sustaining expenditures and spare component capital and to upgrade three rigs for new contracts both domestically and internationally. The remaining $10.5 million is allocated to purchase the remaining 20% interest from the company’s Saudi Arabian joint venture partner. In addition the company anticipates approximately $2 million carry forward from Xtreme’s 2013 capital spend program.
Xtreme recently entered into a letter agreement for two XDR 300 drilling rigs on a multi-year drilling contract in an international market. Additional details will be disclosed upon final execution of the customer contract. The operation is expected to begin in the third quarter of 2014 and the modification expenses for the two rigs are included in the 2014 capital budget.
This agreement provides a long-term solution for these two 300 series rigs. The two rigs should complete their existing contracts in Colorado in February and then begin modifications and mobilization.
CEO Tom Wood commented, “In 2014 we want to continue the momentum we have started over the past 12 months at Xtreme. The market acceptance of both our tier 1 XDR drilling rig fleet and leading edge technology XSR 2 5/8″ coiled tubing fleet is very encouraging. In the XSR coiled tubing segment, the customer demand for our services in South Texas now consistently exceeds our capacity. In order to meet this market demand as quickly as possible, we will build two new units which we will deploy in the second half of 2014. In parallel, we are working on the engineering for a new-generation design of our proprietary 2 5/8″ AC electric coiled tubing units. We will begin purchasing long lead time items for this new design and our intent is to deploy an additional two units of the next generation XSR units in 2015.”
Xtreme Drilling and Coil Services designs, builds and operates a fleet of high-specification drilling rigs and coiled tubing well service units featuring proprietary technology.