Canadian drillers plan to shift rigs to Permian Basin

By Patrick C. Miller | January 30, 2018

Two Canadian drilling companies have recently announced plans to increase their presence in the Permian Basin.

Akita Drilling Ltd. and Trinidad Drilling Ltd.—both based in Calgary, Alberta—will move rigs to the Permian Basin to meet increased demand. Akita will move its Rig 90 to Texas while Trinidad plans to move eight rigs to the Permian.

Akita said its U.S. subsidiary has contracted Rig 90 with a major U.S. operator in the Permian. The rig will be redeployed from western Canada’s natural gas basin where it’s expected to find more work opportunities. The rig is designed for deep-capacity, ultra-high specification drilling. 

Trinidad said that because of strong customer demand in the Permian Basin for high-specification, efficient equipment, it will redeploy idle assets from areas of weaker demand—including three rigs from Saudi Arabia. Trinidad also said it’s engaged in discussions with customers to sign one- or two-year contracts which include pricing steps that can increase with commodity prices.

“We are focused on optimizing the utilization and profitability of our existing equipment and improving our return on capital,” said Brent Conway, Trinidad president and CEO. “To date, the impact of the capital we spent upgrading rigs in 2017 is on track, or ahead of our initial profitability expectations. On average, day rates were higher than expected and have provided stronger margins and return on capital than originally forecast. By moving under-utilized rigs to the Permian Basin, we are able to continue to drive improved activity levels and better profitability.”

After arriving in the U.S., Trinidad’s Saudi Arabian rigs will need minor reconfiguration and are expected to begin work in the third quarter of 2018. The company’s rigs moving from Canada and within the U.S. will be upgraded to meet customer requirements and are anticipated to begin work in the Permian in early to mid-2018.