Under the deal, Louisiana-based Golden West Drilling (GWD) is refurbishing two rigs for Pryme’s use that will have a working depth range of 3000-9500 feet (914-2895m).

The first rig is expected to be completed and available for use by the middle of next month, with the second rig to follow soon after.

Pryme chief executive Justin Pettett described the arrangement as an important development to help the company “avoid the problems caused by the worldwide rig shortage”.

“If our 3-D seismic shoot in central Louisiana’s Turner Bayou is successful, we hope to be drilling in the order of 30 Frio formation wells from March 2007 onwards,” he said.

“The GWD agreement means that one of these rigs can remain working as long as Frio drilling targets are made available on an uninterrupted basis.”

Subject to shareholder approval, the deal would see GWD to provide preferential drilling services to Pryme for the next five years.

Pryme said GWD was a newly formed Louisiana company, whose supervisory management had more than 100 years of combined drilling industry experience.