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Savanna Energy agrees to cancel new build Australian contracts


Published Mar 4, 2015
Savanna Energy Services Corp.-3

In light of the significant uncertainty in respect of commodity pricing and activity levels for all of Savanna's services, Savanna and an Australian customer have mutually agreed to cancel construction of the 4 TDS drilling rigs previously contracted in Q4 2014, resulting in the reduction of $34.5 million from Savanna's 2015 capital budget and a further $25 million from its 2016 capital commitments.

In addition, the Company determined to consolidate a number of its field operating facilities. The $16 million aggregate net book value of the land and buildings associated with these locations were classified as held for sale at December 31, 2014. To date in 2015, total proceeds of $11.5 million were received for two of the properties and the remaining locations continue to be actively marketed.

Savanna will continue to evaluate its 2015 capital program in light of further changes to anticipated activity levels as 2015 unfolds.

Tags: Savanna Energy Services Corp.




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