On Friday July 15, 2011, Magnum Hunter Resources Corp (NYSE:MHR) and subsidiaries, a Houston, Texas based independent, unearthing and Production Company concerned with the development and production of oil and natural gas, announced the acquisition of two new 2011 Schramm T200XD trailer mounted hydraulic drilling rigs with a rated vertical working depth capacity of 9,000 feet by its Appalachian Basin Division.
Investment of approximately $5.8 million is involved in the purchase, which is being financed by the company with the assistance of a secured commercial bank term loan.
The two new Schramm Rigs will be joining the existing Alpha Hunter Drilling LLC. The drilling rig fleet is already comprised of three Schramm T130 rigs.
Mr. Kirk Trosclair, Senior Vice President of Equipment Services for Triad Hunter LLC acknowledged that the addition of the two new Schramm Rigs will contribute to increase the efficiency of Alpha Hunter Drilling’s capacity in providing the best rated, secured and cost effective contract drilling services to its Appalachian based customers. Owing to the ever increasing demand of the oilfield service equipments in the market, the purchase is extremely beneficial to the Triad Hunter, as it provides it with an internal source for oilfield service equipment, supplies and drilling rigs available to draw upon and utilize as per the requirement. Thus the acquisition with its all-embracing benefits seems lucrative for both the Company’s internal needs as well as the third parties.
All the existing drilling rigs of Alpha Hunter are under term contracts with third parties operating in the Pennsylvania and northwestern West Virginia Marcellus Shale region. Early last year, the Triad Energy was over taken by the Magnum Hunter, due to bankruptcy. The existing drilling rig fleets of the Alpha Hunter have been primarily used to drill the vertical top hole sections for Marcellus Shale wells for third parties and for Triad Hunter LLC.
The newly acquired Schramm Rigs are well equipped with automatic pipe handling systems, having exclusive mobility. They inherit the ability to perform the directional drilling operations in unconventional resource shales in this region along with drilling the surface holes. Their respective ability of utilizing pad drilling and minimizing surface locations will prove to be cost effective and efficient in the mountainous terrain of Appalachia.
Shares of MHR surged 6% to $7.27.
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