Trinidad Drilling to drill geothermal well in Chile

Alexander Richter 19 Aug 2009

Trinidad Drilling, a Canadian rig contractor, has moved a drilling rig to Chile, where it will drill a geothermal well for Chilean-Italian JV ENG, a JV between Enep and Enel.

Reported by BN Americas, Canada-based “rig contractor Trinidad Drilling (TSX: TDG) has moved its 114 drilling rig to Chile in what the company hopes will be a first step into the South America.

At the end of 2Q09, the rig was moved to northern Chile where it will drill a geothermal well for Chilean-Italian JV ENG, Trinidad’s president and CEO Lyle Whitmarsh told a webcast. ENG is a JV between Chile’s state oil company Enap and Italian energy company Enel.

The well is “very high profile,” as it is located at nearly 16,000ft (4,877m) above sea level, and will likely take more than 250 days to drill, Whitmarsh said.

The rig is under contract for two years, with the possibility for extension.

The company is not looking to have a mere one-rig operation in the country, but rather hopes to expand its presence.

“I don’t think it’s any different from what we did in Mexico, or even the US for that matter. We like to get in with a foothold with 2-4 rigs. The idea would be to get that to a size where it’s efficient. We always talk about 6-8 rigs being the lowest level of rigs that you want,” executive VP and CFO Brent Conway told the webcast.

Conway said the company is looking to expand not only in Chile, but throughout the South American region by redeploying underutilized rigs from Canada.

Among other benefits provided by the region is the ability to operate throughout the entire year.

“They can work 365 [days per year], and the day rates and margins justify making the investment and moving the rigs, so it’s an opportunity we’re going to pursue,” Conway said.

Source: BN Americas