Precision Drilling posts $75.9M loss in 2nd quarter despite better outlook

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Precision Drilling Corp. tripled its Canadian rig number successful the 2nd quarter, adjacent arsenic its nett nonaccomplishment surged to $75.9 cardinal due to the fact that of compensation charges.

The Calgary-based institution mislaid $5.71 per diluted share, compared with a nonaccomplishment of $3.56 per stock oregon $48.9 cardinal a twelvemonth earlier.

But Precision’s revenues for the 3 months ended June 30 accrued 6.1 per cent year-over-year to $201.4 cardinal from $189.8 million, owed to higher lipid and earthy state prices and an improved outlook for the Canadian vigor sector.

“We are astatine the opening stages of what’s emerging arsenic a beardown manufacture recovery,” said main enforcement Kevin Neveu successful a league telephone with analysts Thursday.

READ MORE: Oil manufacture inactive recovering 1 twelvemonth aft commodity’s historical freefall into antagonistic pricing territory 

Precision, which is the largest drilling rig contractor successful the country, presently has 52 operating drilling rigs successful Canada compared to 13 this clip past year, Neveu said. The existent rig number exceeds some 2019 and 2018 levels.

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Neveu said Precision has respective much rig activations planned done the 3rd 4th and expects its rig number to scope the precocious 50s arsenic the company’s customers hole for a busier 2022. Drilling rig utilization days accrued 199 per cent successful Canada successful the 2nd 4th of 2021 compared with the 2nd 4th of 2020

“Unusually, we expect Precision’s Q3 full drilling days volition transcend the Q1 wintertime drilling season. The lone different clip I’ve seen this hap was during the 2010 betterment pursuing the planetary economical recession,” Neveu said.

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In the U.S., drilling enactment for Precision averaged 39 rigs successful the 2nd quarter, an summation of 6 rigs from the archetypal 4th of 2021. Drilling rig utilization days accrued by 30 per cent successful the U.S., portion planetary drilling enactment decreased 21 per cent owed to the expiration of drilling contracts.

Precision believes the rebound successful Canadian lawsuit request truthful acold this twelvemonth is simply a “leading indicator” for akin improvements yet to travel connected the U.S. broadside of the border, Neveu said. He said vigor companies successful some countries person spent the past respective years operating wrong a capital-constrained and fiscally disciplined framework, and present should beryllium capable to embark connected drilling programs with lone a humble summation successful spending.

While Neveu said helium believes the outlook for the adjacent 12 months is exceptionally bright, peculiarly successful the Canadian market, labour shortages person emerged arsenic a important challenge. He said immoderate radical who near the good work manufacture during the COVID-19 pandemic are reluctant to return. In addition, fly-in, fly-out workers from different parts of the state are not easy capable to travel.

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“The takeaway is that the labour tightness is importantly impacting the work manufacture and providing a meaningful backdrop for complaint increases,” helium said.

Precision’s Canadian good work concern is up five-fold from past July, supported by commodity prices and the Canadian good abandonment program, the institution said.

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