Loyz buys two rigs

US exploration: Loyz and Rex have purchased two rigs for use in the US

Loyz Energy’s indirectly held subsidiary, Loyz Rex Drilling Services, has entered an agreement with JT Oil Consultancy to purchase two drilling units for use in the US.

Loyz Rex will purchase the two rigs for a combined consideration of just over $26 million, with an initial $1.8 million deposit to be paid to JT Oil within seven days of signing the agreement, with an additional $2 million to be paid by 20 December and the remaining $22.2 million by 5 February next year.

Loyz said the deal would be funded by a combination of bank financing and internal resources, adding the amount of financing is yet to be determined.

The deal is conditional on JT Oil winterising both rigs and delivering them to the US.

Loyz is purchasing the rigs to meet the terms of the participation and exploration agreement in entered into with Rex Oil & Gas and Norway’s Fram Exploration over the possible acquisition of stake in Fram’s US assets.

Under the agreement the trio will participate in the drilling of 80 onshore wells in the US with Loyz and Rex earning a combined 40% share of the net revenue interest from each producing well.

The agreement also required Loyz and Rex to provide two rigs for the project and jointly manage, supervise and execute the drilling operations under a turnkey drilling contract.

User

Become an Upstream member!

Membership includes a subscription to our weekly newspaper providing in-depth news from the energy industry, plus full-access to this site and its archives. Still not convinced? Try our free trial.

Already a member?

Login