China North Lands Contract To Drill 100 Wells In Inner Mongolia
Song Yuan Tiancheng Drilling Engineering (Tiancheng), the oil services arm of China North East Petroleum Holdings (AMEX: NEP), has signed a contract with Beijing Junlun Runzhong Technology (JLRZ) to drill 100 new wells in JLRZ’s oilfield in Inner Mongolia. The value of the contract will depend on the drilling depth of the wells drilled.
Drilling of the wells is expected to start this month and be
completed by September 2011. Tiancheng will allocate two rigs to Inner
Mongolia with each rig drilling 50 wells each.
The contract is the sixth drilling contract Tiancheng has
received since being acquired by China North in 2009. For the first
eight months of 2010, Tiancheng has helped China North double the number
of wells drilled to 142.
China North East Petroleum Holdings is an oil company that
engages in crude oil production in Northern China. The company currently
operates four oilfields in Northern China. The company also has an
agreement to sell crude oil produced by PetroChina in China. In fiscal
2009, the company suffered a loss of $22 million on revenues of $65
million.
Since the announcement, China North’s share price has rallied 11% to trade at $5.22 as of 2:30 pm ET.
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