Precision Drilling reports Q1 profit and revenue down from year ago
The completion of the Trans Mountain pipeline expansion is leading to a boom in demand for drilling services, said Precision Drilling chief executive Kevin Neveu.
The contract driller is seeing demand exceed its expectations, he said on an earnings call Thursday, as the expansion of the crude oil pipeline to the West Coast approaches a May 1 start of commercial operations.
“Do we see customer interest increasing in anticipation of the Trans Mountain start up? The answer is resoundingly yes.”
The company has 48 rigs currently operating where last year it had 38, and expects demand to continue. It also expects a boost to well servicing contracts.
“We see this momentum continuing throughout the summer and exceeding our prior view on Canadian rig demand,” said Neveu.
The growth is helping offset a retreat in the U.S., where activity is more muted by weak natural gas prices and operator consolidation, he said.
The company reported 38 active drilling rigs in the U.S. for its first quarter compared with 60 for the first quarter of 2023.
In Canada, Precision averaged 73 active drilling rigs for the quarter, compared with 69 a year earlier.
The decline in U.S. activity helped lead its first-quarter profit to come in at $36.5 million, down from $95.8 million a year ago.
The company says the profit amounted to $2.53 per diluted share for the quarter ended March 31, down from $5.57 per diluted share the same time last year.
Revenue totalled $527.8 million, down from $558.6 million in the first quarter of 2023.
The company is focused on cost reductions, paying down debt and returning profits to shareholders, said Neveu.
Precision is also investing in automated rig technology that could mean future rises in demand won't lead as much to booms in employment.
The system has several more months ahead of field hardening before it's commercially ready, but so far it's working better than expected, said Neveu.
“We'll eliminate human work from the red zone on the drill rig floor and in the mast, while ensuring our customers safe, consistent, predictable and highly efficient rig floor performance.”
This report by The Canadian Press was first published April 25, 2024.
CTVNews.ca Top Stories
Trump confronts repeated boos during raucous Libertarian convention speech
Donald Trump was booed repeatedly while addressing Saturday night’s Libertarian Party National Convention.
This type of screen time has the worst effect on kids: experts
According to some experts, there is one type of screen time that is continuously excessive, and it's having a severe effect on our children.
Family of toddler found dead at small-town Ont. daycare no closer to answers after year of investigation
A year has passed since two-year-old Vienna Irwin was found on the property of a home-based daycare in small-town Ontario, but her family says they are no closer to answers of what happened that day.
Grayson Murray, two-time PGA Tour winner, dead at 30
Two-time PGA Tour winner Grayson Murray died Saturday morning at age 30, one day after he withdrew from the Charles Schwab Cup Challenge at Colonial.
Humboldt Broncos crash victims and families react to decision to deport truck driver
The family of one of the victims of the Humboldt Broncos bus crash in 2018 says they are 'thankful' for a decision by a Calgary immigration board to deport the driver of the truck involved.
Fatal plane crash reported near Squamish, B.C.
The Transportation Safety Board of Canada has confirmed it is working with local Mounties and the BC Coroners Service after a plane crash near Squamish, B.C. Friday night.
'God forgives but we don’t': Loud outburst from stabbing victim’s family during sentencing hearing
An emotional outburst in a London, Ont. courtroom Friday disrupted the sentencing hearing of a woman who pleaded guilty for her part in the death of 29-year-old Mohammed Abdallah.
Three dead after vehicle plunged down a 100-foot embankment in Shediac, N.B.
Three people have died after a vehicle veered off the road in Shediac N.B., Friday morning.
Appeal denied for Edmonton soldier accused of trying to kill her 3 children
An Edmonton woman found guilty of trying to kill her three children has been denied an appeal.