Precision Drilling reports 3rd quarter revenue gains thanks to U.S. activity rebound

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Robust demand in U.S. drilling markets helped Precision Drilling Corp. put up third-quarter income good points on Thursday regardless of a a lot slower restoration in Canadian exercise.

Drilling rig utilization days within the quarter in contrast with a yr in the past elevated 25 per cent within the U.S. and 7 per cent in Canada, the Calgary-based firm reported.

Aggressive circumstances in a key Alberta-B.C. border oilfield improved within the quarter partially as a result of a few of these rigs have been moved to higher markets within the U.S., mentioned Precision CEO Kevin Neveu on a convention name.

“The surplus rig provide within the Deep Basin has diminished as we estimate that the business has mobilized roughly 20 rigs from Canada to the USA, together with one Canadian Tremendous Triple we redeployed to Pennsylvania,” he mentioned.

Precision mentioned it expects demand for rigs in Canada this winter to be just like the muted demand of final winter regardless of pipeline constraints which have been blamed for elevated value reductions for Canadian gentle and heavy crude oil and pure gasoline versus American benchmarks.

“Early indications counsel a pointy ramp-up in early January and whereas remaining budgets is probably not set, we anticipate Q1 actions ought to mirror final winter,” Neveu mentioned.

READ MORE: Little hope seen for Canadian oilpatch exercise progress as steep value reductions proceed

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In the meantime, in the USA, Precision at the moment has 80 rigs working, “together with seven rigs that haven’t labored since 2015,” Neveu reported, including it’s Precision’s highest U.S. utilization quantity because the 2014 oilpatch downturn started.

In a report, analysts with Tudor Pickering Holt & Co. mentioned Precision’s adjusted earnings missed their expectations however they had been inspired by its announcement that it expects to attain the higher finish of debt discount targets this yr.

The corporate reported income within the third quarter of $382 million, up 21.6 per cent from $314 million, primarily as a result of larger exercise and better common day charges in its U.S. contract drilling enterprise.

Precision reported a lack of $31 million or 10 cents per share within the third quarter in contrast with a lack of $26 million or 9 cents within the year-earlier interval.

Earlier this month, Precision Drilling introduced a pleasant deal to accumulate Trinidad Drilling Ltd. that it valued at roughly $1 billion, together with the idea of about $477 million in debt.

Precision’s shares closed at $three.25, down 13 cents or three.85 per cent in Thursday buying and selling on the Toronto Inventory Trade.

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