Ensign awarded eight new rig contracts

Ensign Energy Services says it has been awarded significant new drilling contracts in the United States, Canada, and the Middle East.

In Canada, the company has secured new 2-year contracts for three ADR-1500 HP Super-Spec drilling rigs.

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In the Permian Basin, Ensign has been successful in contracting an additional three ADR-1500 Super-Spec type rigs, each on 1-year term contract.

In Bahrain, the company has been awarded two 3-year initial term contracts for its ADR-2000 HP Super-Spec rigs, one of which is owned 100 per cent by Ensign, and one of which is owned 60 percent by Ensign through its joint venture, Trinidad Drilling International Luxembourg S.a.r.l.

These drilling rigs are among the largest and most technologically advanced land drilling rigs in the world, Ensign says.

The new awards in Canada reflect a stronger demand for available rigs as operators move units to more active regions in the United States, GMP FirstEnergy analyst Ian Gillies wrote in a research note on Friday.

“Ensign is witnessing the WSCB deeper capacity rig market tighten due to industry-wide rig transfers to the U.S. The company’s new Canadian contracts are reflective of these improved dynamics,” Gillies said.

“Previously, we had highlighted the possibility that Canadian high-spec rig demand could tighten following the transfer of 15-20 Canadian rigs from a number of drillers to the U.S. We expect that some of these gains will be offset by limited activity in other rig classes.”

Ensign said the cost to prepare and mobilize the rigs required to fulfill the new contractual obligations will not require any increase to its previously announced $102 million net capital expenditure budget for 2019. 

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