Precision Drilling deploys more rigs as oil rebound takes hold
|National Post 09 Feb 2017 at 13:23|
Canadian rig contractor Precision Drilling Corp said on Thursday it expects to charge higher fees for its rigs if oil prices continue to recover.
Encouraged by oil prices recovering from a two-year slump, oil and gas companies are putting more rigs to work, especially in shale fields. U.S. crude prices averaged US$49.29 per barrel in the fourth quarter ended Dec. 31, up 16.9 per cent from a year earlier.
The company said it was able to increase pricing on the spot market for most of its fleet.
The company said customer sentiment improved as stabilized commodity prices and improving industry cash flows continued to drive demand for its services.
Today, Precision has 138 rigs drilling or moving; 48 in the U.S. and 90 in Canada, saidKevin Neveu, Precisions President and Chief Executive Officer.
The intentions by both OPEC and non-OPEC producers to implement production quotas should lead to improved market-balancing fundamentals. We expect this stabilized and improving oil price will lead to increased spending for resource development programs, which will be positive for Precisions activity levels and service pricing.
Precision said its operating cost per utilization day in Canada fell 4.7 per cent to $9.9 million in the latest quarter.
The company also said total operating costs fell 1.3 per cent, while its general and administrative expenses plunged 22.1 per cent.
Precision said it expected its 2017 capital spending to be $108 million, down nearly 47 percent from last year.
The companys net loss narrowed to $31 million from $271 million, a year earlier, when it recorded one-time charges of about $369 million.
The companys loss was 12 cents per share, lower than the average analysts estimate of 15 cents per share, according to Thomson Reuters I/B/E/S, .
Revenue fell 17.7 per cent to $283.9 million, the company said on Thursday, but beat estimates of $264.3 million.