Doing business with PemexHere's some results from another Canadian company, Trinidad drilling (TDG), doing business with Pemex. Based on TDG's experience with Pemex, it seems that Mexico is a great place for oil service companies to do business if you have the right technology. BTW, TDG's SP has more than triple since March tanks in part to their new lucrative contracts with Pemex.
WEE's future in Mexico looks exciting!!!
Chicontepec development will continue - Trinidad Drilling - Mexico
Published: Wednesday, November 11, 2009 10:00 (GMT -0400)https://www.bnamericas.com/news/oilandgas/Chicontepec_development_will_continue_-_Trinidad_Drilling_CEO
Development of Mexico's Chicontepec field will continue but at a more measured pace, according to Calgary-based Trinidad Drilling's (TSX: TDG) CEO Lyle Whitmarsh.
Chicontepec has come under fire as production has failed to increase despite massive investment. Mexico's state oil company Pemex has said it aims for Chicontepec to offset declining Cantarell field output.
Pemex's search for new equipment and completion techniques may provide further opportunities for Trinidad, Whitmarsh said in a webcast. Chicontepec holds 39% of total prospective hydrocarbons reserves in the country, or 17.7Bboe.
"Chicontepec is a strategic project for Pemex. It is a field with huge technological and geological complexity to exploit it in an efficient way," the state oil giant's CEO Juan Suárez said previously.
Whitmarsh added Trinidad has seven rigs in Mexico that are "contracted at 100% utilization for 18 months with a possible extension."
"To date Trinidad has reported very strong margins in Mexico and we expect this to continue."
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From TDG Q3 2009 report:
"Over the past twelve months, Trinidad has expanded its US and International Drilling segment by 16 rigs, through the delivery of nine rigs built in its rig construction program and the redeployment of seven existing under-utilized rigs from its Canadian operations into Mexico. These rigs are all backed by long-term, take-or-pay contracts and generate strong gross margins. The majority of this segment’s revenue is now being driven by deeper rigs under long-term contracts that tend to work at higher margins. The Company’s gross margins have also been positively impacted by reduced operating expenses."
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"Trinidad expanded its Mexican operations in the third quarter of 2009, delivering three of the four rigs the Company had previously agreed to move into the country. The remaining rig has recently completed the minor enhancements needed to operate in the Mexican climate and in the specific drilling environment and is now in Mexico. The four existing, under-utilized rigs were redeployed from Trinidad’s Canadian operations with take-or-pay contracts for an initial term of 18 months, with a further 18-month extension option, at a utilization rate of 100%. Trinidad’s operations in Mexico have been performing well and the Company’s ability to grow its fleet in this area reflects the quality of its equipment and experience of its crews. All seven of Trinidad’s rigs in Mexico are operating in the Chicontepec region in central eastern Mexico. Activity in this area has increased sharply over the past 12 months with a large number of rigs moving into the area. Petr”leos Mexicanos (Pemex), the Mexican national oil company, has recently been undergoing a review of their operations in the region, looking to incorporate some of the knowledge gained from its previous drilling programs into its future development plans. Trinidad believes that activity will continue in the area, although at a more measured pace. The Company is also of the opinion that Pemex is recognizing the benefits of high-quality equipment and the gains in performance and efficiency it can provide, a trend that positions Trinidad’s high-performing fleet well for future opportunities in the area and elsewhere in Mexico."
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"High quality equipment and the gains in performance and efficiency it can provide"... sounds like Powerwave to me!