Calgary-based Precision Drilling said Thursday its revenue and net earnings rose in the first quarter of this year.
In a news release announcing its quarterly results, the company said revenue of $434 million was an increase of eight per cent compared with the first quarter of 2018 and net earnings of $25 million or $0.08 per diluted share compares to a net loss of $18 million or negative $0.06 per diluted share in the first quarter of 2018.
The company also sold Mexico-based drilling assets for proceeds of US$48 million, resulting in a gain on sale of US$24 million and US$4 million impairment reversal. It also sold its water treatment business.
“We recently divested several non-core assets and business lines as we continue to narrow strategic focus towards our High Performance, High Value land drilling segment. Announced asset sales proceeds totalled $77 million and will be used to fund our capital expenditures plan, allowing us to utilize cash on hand and funds from operations to accelerate our debt repayment initiatives with negligible EBITDA impact,” said Precision president and CEO Kevin Neveu in a statement.
“By the end of May, Precision will have reduced debt levels by approximately $84 million including US$50 million of announced 2021 notes redemptions and completed open market repurchases of US$13 million of later maturity debt. We are confident in our ability to meet or exceed the high end of our targeted annual debt reduction range of $100 million to $150 million and our longer-term range of $400 million to $600 million by the end of 2021.”
He said the company’s activity for the quarter increased 23 per cent in the U.S. from the prior year, compared with eight per cent for the industry. Its current active rig count of 80 rigs has remained steady from the end of 2018, despite slightly declining industry activity levels.
“In the Canadian market, takeaway capacity constraints and wide differentials experienced by our customers in the fourth quarter resulted in Precision’s activity declining 33 per cent year-over-year, a trend that will likely carry through into the second quarter,” said Neveu.
– Mario Toneguzzi for Calgary’s Business
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