OilVoice - CanElson Drilling Provides Update on Mexico Operations

CanElson Drilling Provides Update on Mexico Operations

Tuesday, July 20, 2010

CanElson Drilling Inc. announces today that its Mexican joint venture company, Diavaz CanElson de Mexico, S.A. de C.V. ("DCM"), has signed a one year contract and commenced operation of the second service rig for DS Servicios Petroleros, S.A. de C.V. ("DS") in the Ebano-Panuco-Cacalilao fields of the Misantla-Tampico basin of Mexico. The second service rig, along with the first service rig already operating in the region, will assist in the optimization of drilling and operation services provided by DCM to DS by doing primary completions which were previously performed by the drilling rigs. This should benefit the performance of the drilling rigs which currently operate under performance based contracts. DCM provides the management and expertise for the operation of two subcontracted drilling rigs and the two service rigs operating in the region. The two subcontracted drilling rigs have contracts that presently extend to the end of November 2010.

As previously announced, CanElson has a 50% ownership interest in DCM, with D&S Petroleum Services, S.A. de C.V. (a wholly owned subsidiary of Grupo Diavaz, S.A. de C.V.) holding the other 50% ownership interest. The business of DCM is the subcontracting, purchase and operation of drilling and service rigs in Mexico.

"With the commencement of the second service rig operation in Mexico, CanElson continues to capitalize on further opportunities in Mexico through its unique joint venture with Grupo Diavaz", stated Randy Hawkings, President of CanElson.