That’s right, gas drainage.
Mitchell Services, which is doing the rounds with a $20.2 million capital raising to help pay for its acquisition of Tom Browne Drilling Services, wants to bring its gas drainage expertise to the CSG market.
“We’ll be using gas drainage rigs to drill for CSG,” Mitchell Services CEO Andrew Elf said.
“We want to find a better way with CSG,” he said.
“That would mean using the rigs we’ve got in our fleet to do what [Mitchell Services executive chairman] Nathan [Mitchell] did previously.
“He did it safely and met all the standards. The opportunity for us is to use these rigs and reduce client’s costs. We need to find like-minded clients interested in working with us on this basis.”
And it could be a good idea too, if it comes off.
So too is the raising to buy Tom Browne Drilling Services and the 29 rigs that will add to Mitchell Services’ 29-rig fleet. That will make it the largest player on the east coast, Elf reckons.
However, there is a danger with size in the drilling market and that is utilisation.
Fail to keep rig utilisation up and things can go bad for the business.
That is one of the problems besetting the embattled Boart Longyear at the moment.
The gas drainage idea aside, Mitchell has won about $30 million in contracts in recent times and received about 90 expressions of interest.
What is interesting about the latter point is that the bulk of those 90 expressions of interest started coming in through the second quarter. That means there could be a bit of a change in the weather and perhaps market sentiment is starting to turn.