Precision Drilling reports Q1 profit and revenue down from year ago
![Precision Drilling logo Precision Drilling log. (image: Precision Drilling)](/content/dam/ctvnews/en/images/2022/4/28/precision-drilling-logo-1-5879768-1651147017834.jpg)
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
![](https://www.ctvnews.ca/polopoly_fs/1.6979388.1722030190!/httpImage/image.jpg_gen/derivatives/landscape_800/image.jpg)
Celine Dion delivers stirring comeback performance at Paris Olympics opening ceremony
Against the rainy Paris night sky, Celine Dion staged the comeback of her career with a powerful performance from the Eiffel Tower to open the Olympic Games.
Jasper wildfire: 'Several weeks' before residents can return, premier says
Premier Danielle Smith said Friday afternoon in Hinton while weather conditions are cooler, the Jasper fire is still considered out of control and that Jasper residents can expect to be away from their homes 'for several weeks.'
Missing 3-year-old boy found dead in creek in Mississauga: police
A three-year-old boy has been found dead a day after he went missing in a park in Mississauga, Peel police say.
Irish museum pulls Sinead O'Connor waxwork after just one day due to backlash
An Irish museum will withdraw a waxwork of singer-songwriter Sinéad O'Connor just one day after installing it, following a backlash from her family and the public, it told CNN in a statement on Friday.
Winnipeg senior's account overdrawn for $146,000 water bill
A Winnipeg senior is getting soaked with a six-figure water bill.
Turpel-Lafond won't sue CBC over Cree heritage report that took 'heavy toll': lawyer
The lawyer for a former judge whose claims to be Cree were questioned in a CBC investigation says his client is not considering legal action against the broadcaster after the Law Society of British Columbia this week backed her claims of Indigenous heritage.
Driver charged after flashing high beams at approaching police
Orillia OPP arrested and charged a driver with impaired driving after flashing their high beams.
Major Canadian bank experiences direct deposit outage on payday
Scotiabank says it has fixed a technical issue that impacted direct deposits on Friday morning.
Health Canada warns some naloxone kits contain false instructions
Health Canada is warning some take-home naloxone kits come with bad instructions that should be ignored in favour of the correct guidance.