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Akita Drilling anxious to see Mackenzie Valley gas pipeline project get go-ahead Drilling contractor working in northern Canada says pipeline would generate Arctic activity, faces expiration of Northwest Territories drilling contracts starting in 2004 Gary Park Petroleum News Calgary Correspondent
Calgary-based Akita Drilling Ltd., the trailblazer in fostering business relationships with Canada’s northern aboriginal corporations, is hungry for a start-work decision on a Mackenzie Valley gas pipeline.
It said the slow pace of development in the Mackenzie Delta lopped nearly 20 percent off its 2002 profits and slashed its overall rig utilization rate for the year to 46.8 percent, from 56.9 percent in 2001.
“A positive natural gas pipeline announcement for the Mackenzie Valley would provide a meaningful catalyst to accelerate northern drilling and provide significant opportunities for the company’s northern rigs,” Akita said in a prepared statement.
Although Akita, which has a drilling fleet of 36 rigs, beat the industry’s average 2002 utilization rate of 39.2 percent, it is on edge as contracts for its northern rigs are due to start expiring in 2004.
The fleet includes purpose-built Arctic rigs designed to drill to depths of about 16,500 feet. Local relationships emphasized To position itself for a potential explosion of Arctic activity, Akita has invested significant time over many years building trust with aboriginal communities and establishing partnerships with local operators.
One of the joint ventures, Akita/Equtak Drilling Ltd., involved the launch in mid-2001 of an C$18-million, state-of-the-art Arctic rig in a deal with Inuvialuit Development Corp. IDC is the business arm of the Inuvialuit Regional Corp., which is counting heavily on oil and gas exploration of an area covered by a land claim settled in 1984 with the Canadian government.
Akita also is a partner in Akita/Sahcho Drilling Ltd. and Akita/Sahtu Drilling Ltd., in the Fort Liard and Normal Wells regions, respectively, of the Northwest Territories.
Positive outlook for 2003 While awaiting a breakthrough in the Mackenzie Delta, Akita is taking a positive view of 2003, with oil prices remaining strong and North American gas prices benefiting from a lack of capacity to replace inventories of gas for stored winter use. Akita said the high commodity prices are prompting most of its customers to consider expanded drilling programs for 2003.
The company's profits for 2002 slipped to C$14.35 million from C$17.9 million, but cash flow made a slight gain to C$27.46 million from C$26.96 million.
The industry-wide slowdown for 2002 saw gross capital spending shrink to C$5.83 million from C$70.46 million.
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