InterOil Enlists High Arctic for Drilling Services in Papua New Guinea

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Researched by Industrial Info Resources Australia (Perth, Australia)--High Arctic Energy Services (HWO:TO) (Red Deer, Alberta) will provide drilling services to InterOil Corporation (NYSE:IOC) (Cairns, Australia) in Papua New Guinea, including a heli-portable drilling rig and an accommodation camp for 100 people.

The two-year contract includes an extension option for an additional year. The contract was announced on April 9.

High Arctic currently owns two heli-portable rigs, and offers support equipment, including crawler cranes, water pumps, vehicles, lighting towers, wheel loaders, forklifts, oilfield trucks, trailers and accommodation camps. High Arctic has experience working in Papua New Guinea and is a service provider to other remote areas worldwide.

The company recently committed to buy two four-year-old, heli-portable, AC self-erecting, 1500-HP triple-drilling rigs, plus associated ancillary equipment, and plans to upgrade both. The upgrades will be done at a yard in Port Moresby. The purchase and upgrades are estimated to cost $52 million.

The contract with InterOil will commence once the rig has been moved to the site. Planning is under way for the first well to be spudded in November. The second rig is expected to be available in 2015.

Finalization of the purchase agreement is expected in May and is subject to certain conditions. In June, the rigs will be transported to Papua New Guinea.

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