(Canadian dollars except as indicated)
This news release contains "forward-looking information and
statements" within the meaning of applicable securities laws. For a
full disclosure of the forward-looking information and statements
and the risks to which they are subject, see the "Cautionary
Statement Regarding Forward-Looking Information and Statements"
later in this news release.
Precision Drilling Corporation ("Precision" or the
"Corporation") (TSX:PD) (NYSE:PDS) reported net earnings of $18
million or $0.06 per diluted share for the three months ended June
30, 2012 compared to net earnings of $16 million or $0.06 per
diluted share for the second quarter of 2011.
Revenue for the second quarter of 2012 was $382 million and
earnings before finance charges, income taxes, depreciation,
amortization and foreign exchange ("EBITDA") totalled $97 million
compared to $345 million and $93 million, respectively, during the
comparable period in 2011. Second quarter 2012 revenue and EBITDA
were lower than the first quarter of 2012 due to the seasonality of
oilfield service activity in Canada known as "spring break-up".
This is a time in Canada where heavy equipment movement is
restricted due to road bans and normally occurs in March to June of
each year. Spring break-up was extended this year due to
significant rainfall in western Canada.
In the Contract Drilling Services segment, average drilling rig
revenue per day increased by US$1,065 to US$23,145 in Precision's
United States operations and by $2,188 to $20,649 in the Canadian
operations in the second quarter of 2012 over the comparable
quarter in 2011. Average revenue per day in the second quarter of
2012 decreased over the first quarter by US$80 and $442 in the
United States and Canadian operations, respectively. The rate
decreases from the first quarter in the United States and Canada
are primarily the result of declines in the spot market rate, while
in Canada the drop is also due to winter related revenue received
in the first quarter.
For the six months ended June 30, 2012, Precision reported net
earnings of $129 million or $0.45 per diluted share compared to net
earnings of $82 million or $0.28 per diluted share for the same
period of 2011. Revenue for the first half of 2012 was $1,022
million compared to $871 million for the corresponding period of
2011. EBITDA totalled $343 million for the first half of 2012
compared to $279 million in the first half of 2011. The
year-over-year improvement resulted from higher pricing in the
Contract Drilling Services and Completion and Production Services
segments partially offset by lower drilling activity levels.
Activity for Precision, as measured by drilling utilization days,
decreased 2% in Canada and remained flat in the United States for
the first six months of the year compared with the same period in
2011.
Precision is updating its 2012 capital expenditure plan and
announcing five additional new build Super Series drilling rigs for
Precision's North American operations backed by long-term
contracts. Precision has reduced its adjusted 2012 capital
expenditure plan from $975 million to $875 million. The reduction
in the plan has occurred in accordance with normal budgetary
procedures and reflects lower than originally forecasted industry
activity levels for 2012.
Kevin Neveu, Precision's President and Chief Executive Officer,
stated: "Despite softening customer demand and a prolonged Canadian
spring break-up this was Precision's strongest second quarter for
EBITDA in the history of the company. Precision's fleet of Super
Series drilling rigs, supported by a strong base of long-term
contracts operating across most North American unconventional
basins partially offset the headwinds in the market. The demand for
Super Series rigs remains encouraging as we continue to see
customers willing to commit to long-term contracts for new build
rigs. Today's announcement of five additional new build Super
Series rigs supports our view that these are the rigs our customers
desire and should continue to deliver superior utilization and
returns even in periods of lower activity."
"Precision remains mindful of the volatile and weakened oil
prices and depressed natural gas prices, the reduction in our
customers' cash flow and the potential impact that has on our
business. In response, Precision has reduced total capital spending
in 2012 to $875 million, down approximately $270 million from our
original 2012 budget of $1.14 billion. While we have eliminated
many discretionary projects and reduced maintenance capital
commensurate with expected activity levels, we continue to invest
in the new build Super Series Rigs which are all supported by
long-term customer contracts."
"Despite commodity price softness in the quarter, Precision was
able to maintain pricing gains achieved over the past several
quarters in the United States market. Precision's average dayrates
were supported by sustained demand for Tier 1 assets and new build
Super Series rigs entering our active fleet. For lower tier assets
we expect the pricing pressure experienced in the quarter to
continue if commodity price weakness and market uncertainty
persists. Precision's average active rig count in the United States
was down seven rigs from the first quarter of 2012 and five rigs
over the same period in 2011. Precision's active rig count in the
United States is currently 93 and we expect it to increase over the
coming weeks as rigs that have recently moved from the Northeast
begin to spud wells for customers and contracted new build rigs
enter our active fleet."
"Customer demand in Canada during the second quarter was higher
than activity levels indicate with operations hampered by weather
as an exceptionally wet June delayed the summer ramp up.
Additionally, we believe lower commodity prices have caused some
customers to reduce their capital spending budgets and this may
continue to impact activity levels throughout the second half of
the year. Precision's current active rig count in Canada of 82,
compares to 98 at this time last year. In Canada, Precision
averaged 44 rigs operating during the second quarter of 2012, down
from 46 rigs during the second quarter of 2011. Precision expects
to have approximately 110 rigs working once the ground dries
sufficiently to facilitate the movement of rigs."
"In Precision's international operations I am pleased to report
that we now have eight rigs running including three in Saudi Arabia
and five in Mexico. Current activity levels are up from three rigs
at the end of the first quarter. With continued international
customer interest, bid activity remains high for Precision and we
expect further progress in the second half of the year."
"Precision's Completion and Production Services segment
continues to perform well. Due to spring break-up, Precision's
service rig fleet worked 46% fewer hours during the second quarter
of 2012 as compared to the first quarter of 2012, and 9% more hours
than the second quarter of 2011. Oil related work continued to be
where the vast majority of the service rig hours were achieved
during the second quarter of 2012. The segment generated EBITDA of
$9 million during the second quarter of 2012, up 9% from last
year."
"While there is a high degree of short-term market uncertainty,
we are confident in the long-term growth prospects for oil and
natural gas development and Precision's ability to continue to
safely deliver our High Performance, High Value services to our
customers", concluded Mr. Neveu.
SELECT FINANCIAL AND OPERATING INFORMATION
Three months ended June 30,
(Stated in thousands of Canadian
dollars, except per share amounts) 2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 381,966 $ 345,325 10.6
EBITDA(1) 97,192 92,566 5.0
Net earnings 18,261 16,403 11.3
Cash provided by operations 275,346 176,312 56.2
Funds provided by operations (1) 62,373 70,766 (11.9)
Capital spending:
Expansion capital expenditures 158,876 61,943 156.5
Upgrade capital expenditures 29,962 27,336 9.6
Maintenance and infrastructure
capital expenditures 32,236 24,615 31.0
Proceeds on sale (3,730) (3,349) 11.4
----------------------------------------------------------------------------
Net capital spending 217,344 110,545 96.6
Business acquisitions (net of cash
acquired) 25 34 (26.5)
Net earnings - per share:
Basic 0.07 0.06 16.7
Diluted 0.06 0.06 -
Contract drilling rig fleet 352 360 (2.2)
Drilling rig utilization days:
Canada 4,005 4,200 (4.6)
United States 8,827 9,316 (5.2)
International 398 173 130.1
Service rig fleet 211 220 (4.1)
Service rig operating hours 50,560 46,533 8.7
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
Six months ended June 30,
(Stated in thousands of Canadian
dollars, except per share amounts) 2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 1,022,032 $ 870,675 17.4
EBITDA(1) 342,766 278,977 22.9
Net earnings 129,342 81,963 57.8
Cash provided by operations 437,786 293,634 49.1
Funds provided by operations (1) 310,112 263,103 17.9
Capital spending:
Expansion capital expenditures 295,348 97,516 202.9
Upgrade capital expenditures 84,221 48,114 75.0
Maintenance and infrastructure
capital expenditures 63,188 33,064 91.1
Proceeds on sale (8,809) (4,084) 115.7
----------------------------------------------------------------------------
Net capital spending 433,948 174,610 148.5
Business acquisitions (net of cash
acquired) 25 33,177 (99.9)
Net earnings - per share:
Basic 0.47 0.30 56.7
Diluted 0.45 0.28 60.7
Contract drilling rig fleet 352 360 (2.2)
Drilling rig utilization days:
Canada 16,375 16,742 (2.2)
United States 18,278 18,337 (0.3)
International 583 353 65.2
Service rig fleet 211 220 (4.1)
Service rig operating hours 144,602 142,681 1.3
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
FINANCIAL POSITION AND RATIOS
(Stated in thousands of
Canadian dollars, except
ratios) June 30, 2012 December 31, 2011
----------------------------------------------------------------------------
Working capital $ 446,820 $ 610,429
Long-term debt(1) $ 1,242,993 $ 1,239,616
Total long-term financial
liabilities $ 1,267,091 $ 1,267,040
Total assets $ 4,481,139 $ 4,427,874
Long-term debt to long-term
debt plus equity ratio(1) 0.35 0.37
----------------------------------------------------------------------------
(1) Net of unamortized debt issue costs.
Revenue in the second quarter of 2012 was $37 million higher
than the prior year period. The increase was mainly due to a
year-over-year increase in rates partially offset by slightly lower
drilling utilization days in both Canada and the United States.
Revenue in Precision's Contract Drilling Services segment increased
by 11% while revenue increased 10% in the Completion and Production
Services segment in the second quarter of 2012 compared to the
prior year.
EBITDA margin (EBITDA as a percentage of revenue) was 25% for
the second quarter of 2012 compared to 27% for the same period in
2011. The decrease in EBITDA margin for the quarter was primarily
attributable to lower utilizations and higher costs offset
partially by higher average dayrates in both Canada and the United
States. Higher operating costs in the quarter were the result of
start-up costs internationally, increased maintenance costs in the
United States and costs associated with directional drilling in
Canada in a period of seasonally low activity. Precision's term
contract position with customers, a highly variable operating cost
structure and economies achieved through vertical integration of
the supply chain continue to support EBITDA margins.
In the Contract Drilling Services segment, Precision currently
owns 353 contract drilling rigs, including 198 in Canada, 147 in
the United States and eight rigs in international locations and the
capacity to run concurrently 81 directional drilling jobs.
Precision's Completion and Production Services segment includes 190
service rigs, 19 snubbing units, two coil tubing units, 106
wastewater treatment units, 66 drilling and base camps and a broad
mix of rental equipment.
During the quarter, an average of 44 drilling rigs worked in
Canada, 97 worked in the United States and four worked
internationally totalling an average of 145 rigs. This compares
with an average of 150 rigs in the second quarter a year ago.
Oil and natural gas prices were lower during the second quarter
of 2012 compared with the year ago period. For the second quarter
of 2012, West Texas Intermediate crude oil averaged US$93.43 per
barrel, 9% lower when compared to US$102.55 per barrel in the same
period in 2011. AECO natural gas spot prices averaged $1.90 per
MMBtu, 51% lower than the second quarter 2011 average of $3.88 per
MMBtu. In the United States, Henry Hub natural gas spot prices
averaged US$2.28 per MMBtu in the second quarter of 2012, a
decrease of 48% over the second quarter 2011 average of US$4.35 per
MMBtu.
Summary for the three months ended June 30, 2012:
-- Operating earnings were $31 million and 8% of revenue, compared to $40
million and 12% of revenue in the second quarter of 2011. Operating
earnings were negatively impacted by start-up costs internationally,
costs associated with directional drilling in Canada in a period of
seasonally low activity and the decrease in activity and in Precision's
United States and Canadian drilling operations. In general, activity in
Canada was down from the prior year due to unusually wet weather in the
western Canada sedimentary basin. In addition, Precision recorded
depreciation on certain Tier 3 rigs based on four years straight-line
amortization which resulted in approximately $8 million of additional
depreciation expense over what would have been booked using the units of
production method.
-- General and administrative expenses were $25 million, a decrease of $5
million from the second quarter of 2011, primarily because incentive
compensation costs tied to the price of Precision's common shares
decreased over the comparable quarter partially offset by incremental
costs associated with growth in international and directional drilling
activity.
-- Finance charges were $22 million, an increase of $6 million from the
second quarter of 2011 due to an increase in the long-term debt balance
partially offset by $1 million in debt amendment fees in 2011.
-- Capital expenditures for the purchase of property, plant and equipment
were $221 million in the second quarter, an increase of $107 million
over the same period in 2011. Capital spending for the second quarter of
2012 included $159 million for expansion capital, $30 million for
upgrade capital and $32 million for the maintenance of existing assets
and infrastructure.
-- Average revenue per utilization day for contract drilling rigs increased
in the second quarter of 2012 to US$23,145 from the prior year second
quarter of US$22,080 in the United States and increased in Canada to
$20,649 in the second quarter of 2012 from $18,461 for the second
quarter of 2011. The increase in revenue rates for the second quarter in
Canada reflects the stronger industry rates for Tier 1 and 2 rigs
carried over from the winter drilling season while in the United States
the improvement in the average rate was due to a greater proportion of
new build rigs working. In the United States, for the second quarter of
2012, 72% of Precision's working rigs were working under term contracts
compared to 80% in the 2011 comparative period. Turnkey revenue for the
second quarter of 2012 was US$15 million compared with US$21 million in
2011. Within Precision's Completion and Production Services segment,
average hourly rates for service rigs were $728 in the second quarter of
2012 compared to $643 in the second quarter of 2011.
-- Average operating costs per utilization day for drilling rigs increased
in the second quarter of 2012 to US$14,548 from the prior year second
quarter of US$13,110 in the United States and increased in Canada to
$12,799 in the second quarter of 2012 from $11,897. The cost increase in
the United States was primarily due to a labour rate increase that
became effective in December 2011 and higher repairs and maintenance
costs. The cost increase in Canada was primarily due to a labour rate
increase that became effective in the fourth quarter of 2011. Within
Precision's Completion and Production Services segment, average hourly
operating costs for service rigs increased to $610 in the second quarter
of 2012 as compared to $560 in the second quarter of 2011 primarily due
to a labour rate increase and higher fuel costs. Typically labour rate
increases are recovered in dayrate increases.
-- Precision realized revenue from directional services of $23 million in
the second quarter of 2012 compared with $13 million in the prior year.
-- Funds provided by operations in the second quarter of 2012 were $62
million, a decrease of $9 million from the prior year comparative
quarter of $71 million.
Summary for the six months ended June 30, 2012:
-- Revenue for the first half of 2012 was $1,022 million, an increase of
17% from the 2011 period.
-- Operating earnings were $201 million, an increase of $38 million or 23%
from 2011. Operating earnings were 20% of revenue in 2012 compared to
19% in 2011.
-- General and administrative costs were $63 million, a decrease of $2
million over the first half of 2011 primarily as a result of the
decrease in incentive compensation costs tied to the performance of
Precision's common shares in 2012 partially offset by incremental costs
associated with the growth in international and directional activity.
-- Finance charges were $44 million, a decrease of $15 million from the
first half of 2011 due to the 2011 charge of $27 million for the make-
whole premium from refinancing a previously outstanding debt partially
offset by higher interest costs from an increased debt balance.
-- Funds provided by operations in the first half of 2012 were $310
million, an increase of $47 million from the prior year comparative
period of $263 million.
-- Capital expenditures for the purchase of property, plant and equipment
were $443 million in the first half of 2012, an increase of $264 million
over the same period in 2011. Capital spending for 2012 to date included
$296 million for expansion capital, $84 million for upgrade capital and
$63 million for the maintenance of existing assets and infrastructure.
OUTLOOK
Precision has a strong portfolio of long-term customer contracts
that provides a base level of activity and revenue. Precision has
an average of 122 rigs committed under term contracts for the third
quarter of 2012, an average of 113 rigs contracted for the fourth
quarter of 2012 and 92 for the first quarter of 2013. In Canada,
term contracted rigs normally generate 250 utilization days per rig
year due to the seasonal nature of well access, whereas in the
United States and international they usually generate 365
utilization days per rig year in most regions.
Capital expenditures are expected to be approximately $875
million for 2012, of which $443 million was expended during the
first half of 2012. The expected 2012 total includes $132 million
for sustaining and infrastructure expenditures and is based upon
currently anticipated activity levels for 2012. Additionally, $613
million is slated for expansion capital and includes the cost to
complete the drilling rigs from the 2011 new build rig program and
the new build rigs for 2012. The total capital expenditures also
include an estimated $130 million to upgrade approximately 14 rigs
in 2012 and to purchase long lead time items for the Corporation's
capital inventory. These long lead time items include top drives,
masts and engines, that can be used for North American or
international new build rig opportunities and rig tier upgrades.
Precision expects that the $875 million will be split $751 million
for the Contract Drilling segment and $124 million for the
Completion and Production Services segment. An additional $44
million of committed expansion capital is expected to carry forward
to 2013.
Demand remains solid for existing Tier 1 Super Series rigs for
both Canada and the United States and customers continue to show
interest in contracting new build Super Series rigs. Precision
believes it will have opportunities to contract additional new
build and upgraded rigs in the second half of 2012, although the
number of contracts is likely to be significantly lower than the 42
rigs contracted during 2011. According to industry sources, as at
July 20, 2012, the United States active land drilling rig count was
flat with the prior year period while the Canadian drilling rig
count had decreased about 13%.
Natural gas production in the United States has remained strong
despite reduced drilling activity. United States natural gas
storage levels as at July 13, 2012 are 17% above the five-year
average and 19% above storage levels of a year ago. This also
strongly influences Canadian activity since Canada has historically
exported a significant portion of its natural gas production to the
United States. The increase in oil and liquids rich natural gas
drilling in areas like the Permian Basin, Bakken and Eagle Ford has
been strong and the U.S. oil rig count as at July 20, 2012 is 39%
higher than it was a year ago. On average, Precision has more
equipment working in oil related plays than at any time in its
history with approximately 80% of Precision's active rig count
drilling for oil targets.
With high storage levels, consistent production and the view
that North America has an oversupply of natural gas, gas prices
have remained at very low levels. To date, customer changes in
natural gas drilling plans are reflected in a decline in the rig
count targeting dry gas plays. If low natural gas prices continue,
Precision and the North American drilling industry could see
continued weak demand for natural gas drilling.
SEGMENTED FINANCIAL RESULTS
Precision's operations are reported in two segments; the
Contract Drilling Services segment includes the drilling rig,
directional drilling, oilfield supply and manufacturing divisions;
and the Completion and Production Services segment includes the
service rig, snubbing, coiled tubing, rental, camp and catering and
wastewater treatment divisions.
Three months ended June 30, Six months ended June 30,
(Stated in
thousands of
Canadian
dollars) 2012 2011 % Change 2012 2011 % Change
----------------------------------------------------------------------------
Revenue:
Contract
Drilling
Services $332,181 $298,482 11.3 $ 863,247 $724,509 19.1
Completion and
Production
Services 52,263 47,578 9.8 163,348 151,807 7.6
Inter-segment
eliminations (2,478) (735) 237.1 (4,563) (5,641) (19.1)
----------------------------------------------------------------------------
$381,966 $345,325 10.6 $1,022,032 $870,675 17.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EBITDA(1)
Contract
Drilling
Services $103,476 $104,169 (0.7) $ 331,032 $276,719 19.6
Completion and
Production
Services 8,985 8,233 9.1 48,189 42,684 12.9
Corporate and
other (15,269) (19,836) (23.0) (36,455) (40,426) (9.8)
----------------------------------------------------------------------------
$ 97,192 $ 92,566 5.0 $ 342,766 $278,977 22.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES
Three months ended June 30,
(Stated in thousands of
Canadian dollars,
except where noted) 2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 332,181 $ 298,482 11.3
Expenses:
Operating 222,059 187,379 18.5
General and
administrative 6,646 6,934 (4.2)
----------------------------------------------------------------------------
EBITDA (1) 103,476 104,169 (0.7)
Depreciation 58,672 45,946 27.7
----------------------------------------------------------------------------
Operating earnings(1) $ 44,804 $ 58,223 (23.0)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings as a
percentage of revenue 13.5% 19.5%
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in
Canada $ 20,649 $ 18,461 11.9
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in the
United States(2) US$ 23,145 US$ 22,080 4.8
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Includes revenue from idle but contracted rig days and lump sum payouts.
Six months ended June 30,
(Stated in thousands of
Canadian dollars,
except where noted) 2012 2011 % Change
---------------------------------------------------------------------------
Revenue $ 863,247 $ 724,509 19.1
Expenses:
Operating 513,193 431,078 19.0
General and
administrative 19,022 16,712 13.8
---------------------------------------------------------------------------
EBITDA (1) 331,032 276,719 19.6
Depreciation 126,007 100,473 25.4
---------------------------------------------------------------------------
Operating earnings(1) $ 205,025 $ 176,246 16.3
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Operating earnings as a
percentage of revenue 23.8% 24.3%
---------------------------------------------------------------------------
Drilling rig revenue per
utilization day in
Canada $ 20,983 $ 17,981 16.7
---------------------------------------------------------------------------
Drilling rig revenue per
utilization day in the
United States(2) US$ 23,186 US$ 21,451 8.1
---------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Includes revenue from idle but contracted rig days and lump sum
payouts.
Three months ended June 30,
Canadian onshore
drilling statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs
(end of period) 197 817 202 800
Drilling rig operating
days (spud to release) 3,580 15,129 3,780 15,884
Drilling rig operating
day utilization 20% 20% 21% 22%
Number of wells drilled 403 1,314 396 1,426
Average days per well 8.9 11.5 9.5 11.1
Number of metres
drilled (000s) 688 2,750 622 2,754
Average metres per well 1,708 2,093 1,570 1,931
Average metres per day 192 182 165 173
----------------------------------------------------------------------------
Six months ended June 30,
Canadian onshore
drilling statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs
(end of period) 197 817 202 800
Drilling rig operating
days (spud to release) 14,622 63,250 14,906 63,345
Drilling rig operating
day utilization 42% 43% 41% 44%
Number of wells drilled 1,275 4,333 1,487 5,033
Average days per well 11.5 14.6 10.0 12.6
Number of metres
drilled (000s) 2,307 9,160 2,342 9,265
Average metres per well 1,809 2,114 1,575 1,841
Average metres per day 158 145 157 146
----------------------------------------------------------------------------
(1) Canadian operations only.
(2) Canadian Association of Oilwell Drilling Contractors ("CAODC") and
Precision - excludes non-CAODC rigs and non-reporting CAODC members.
United States onshore
drilling statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Average number of active
land rigs for quarters
ended:
March 31 104 1,947 100 1,695
June 30 97 1,924 102 1,803
----------------------------------------------------------------------------
Year to date average 100 1,935 101 1,749
----------------------------------------------------------------------------
(1) United States lower 48 land operations only.
(2) Baker Hughes rig counts.
Contract Drilling Services segment revenue for the second
quarter of 2012 increased by 11% to $332 million and EBITDA
decreased by 1% to $103 million compared to the same period in
2011. The increase in revenue was due to higher average rates per
day for both Canada and the United States partially offset by lower
activity. The decrease in EBITDA in a period of increased revenue
was the result of start-up costs internationally, lower margin in
the United States as a result of increased maintenance costs and
costs associated with directional drilling in Canada in a period of
seasonally low activity.
Activity in North America was centered on oil and liquids rich
natural gas related drilling activity. In the second quarter,
drilling rig revenue per utilization day over the prior year was up
12% in Canada and 5% in the United States as a result of increased
rates for rigs working on well-to-well contracts and new rig
builds. During the quarter, 44% of Precision's utilization days in
Canada were generated from rigs under term contract compared with
33% in 2011 while in the United States 72% of utilization days were
generated from rigs under term contract as compared to 80% in the
prior year period. At the end of the quarter, Precision had 69
drilling rigs working under term contracts in the United States and
54 in Canada.
Drilling rig utilization days in Canada (drilling days plus move
days) during the second quarter of 2012 were 4,005, a decrease of
5% compared to 4,200 in 2011 due to the unseasonably wet spring.
Drilling rig utilization days for Precision in the United States
were 5% lower than the same quarter of 2011 due to a reduction in
natural gas targeted drilling. On average, Precision had four rigs
working internationally as the Saudi Arabia based business ramped
up and Precision mobilized three additional rigs into Mexico.
Contract Drilling Services segment operating costs were 67% of
revenue for the quarter which is four percentage points higher than
the prior year period. Higher operating costs in the quarter were
the result of start-up costs internationally, increased maintenance
costs in the United States and costs associated with directional
drilling in Canada in a period of seasonally low activity. In
addition, crew wage increases in Canada and the United States in
October contributed to the year-over-year increase.
Quarterly depreciation in the Contract Drilling Services segment
increased 28% from the prior year. As discussed in Management's
Discussion and Analysis for the year ended December 31, 2011,
Precision changed its depreciation policy on certain Tier 3 rigs
from the unit of production method to straight-line over four years
resulting in approximately $8 million in additional depreciation in
the quarter. Additional increases in depreciation are the result of
an increased asset base and new business lines. With the exception
of certain Tier 3 equipment and directional drilling equipment,
contract drilling operations use the unit of production method of
calculating depreciation.
SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES
Three months ended June 30,
(Stated in thousands of Canadian
dollars, except where noted) 2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 52,263 $ 47,578 9.8
Expenses:
Operating 39,932 35,930 11.1
General and administrative 3,346 3,415 (2.0)
----------------------------------------------------------------------------
EBITDA(1) 8,985 8,233 9.1
Depreciation 6,101 5,083 20.0
----------------------------------------------------------------------------
Operating earnings(1) $ 2,884 $ 3,150 (8.4)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings as a percentage of
revenue 5.5% 6.6%
----------------------------------------------------------------------------
Well servicing statistics:
Number of service rigs (end of period) 211 220 (4.1)
Service rig operating hours 50,560 46,533 8.7
Service rig operating hour utilization 26% 23%
Service rig revenue per operating hour$ 728 $ 643 13.2
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
Six months ended June 30,
(Stated in thousands of Canadian
dollars, except where noted) 2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 163,348 $ 151,807 7.6
Expenses:
Operating 107,469 101,462 5.9
General and administrative 7,690 7,661 0.4
----------------------------------------------------------------------------
EBITDA(1) 48,189 42,684 12.9
Depreciation 14,135 12,154 16.3
----------------------------------------------------------------------------
Operating earnings(1) $ 34,054 $ 30,530 11.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings as a percentage of
revenue 20.8% 20.1%
----------------------------------------------------------------------------
Well servicing statistics:
Number of service rigs (end of period) 211 220 (4.1)
Service rig operating hours 144,602 142,681 1.3
Service rig operating hour utilization 39% 36%
Service rig revenue per operating hour$ 751 $ 695 8.1
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
Completion and Production Services segment revenue for the
second quarter increased by 10% from the second quarter of 2011 to
$52 million and EBITDA increased by 9% to $9 million. The increase
in revenue and EBITDA is attributed to an increase in service rig
rates, oil well production activity and service line growth,
partially offset by lower results from rental and camp and catering
operations.
Well servicing and snubbing activity increased 9% from the prior
year period, with the fleet generating 50,560 operating hours in
the second quarter of 2012 compared with 46,533 hours in the prior
year quarter for utilization of 26% and 23%, respectively. The
increase was a result of higher service rig activity performing
workover and production work on oil wells, the start-up of new coil
tubing service rigs and expansion of services into the northern
United States. Approximately 98% of the second quarter service rig
activity was oil related. New well completions were 30% lower than
the prior year quarter and accounted for 4% of service rig
operating hours in the second quarter compared to 6% in the same
quarter in 2011. Precision's rental division benefitted from new
equipment additions in the quarter, but utilization for some
equipment decreased in conjunction with lower drilling and
completion activity in the industry.
Average service rig revenue increased $85 per operating hour to
$728 from the prior year period due to rig mix and increased labour
and operating costs passed through to customers.
Operating costs as a percentage of revenue in the second quarter
of 2012 was 76%, unchanged compared to the same period of 2011.
Operating costs per service rig hour increased over the comparable
period in 2011 primarily due to higher wages and fuel prices.
Depreciation in the Completion and Production Services segment
in the second quarter of 2012 was 20% higher than the prior year
due to the addition of new assets and higher well servicing
activity. The well servicing division uses the unit of production
method of calculating depreciation while the other operating
divisions within the Completion and Production Services segment use
the straight-line method.
SEGMENT REVIEW OF CORPORATE AND OTHER
Precision views its corporate segment as support functions that
provide assistance to more than one segment. The Corporate and
other segment had an EBITDA loss of $15 million for the second
quarter of 2012, $5 million lower than the prior year comparative
period due to decreased costs associated with share based
performance incentive plans partially offset by incremental costs
associated with increasing activity.
OTHER ITEMS
Net financial charges for the quarter were $22 million, an
increase of $6 million from the second quarter of 2011 primarily
due to higher long-term debt interest expense.
Finance charges for the three and six month periods ended June
30, 2012 and 2011 are as follows:
Three months ended Six months ended
June 30, June 30,
(Stated in thousands of Canadian
dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
Interest:
Long-term debt $ 21,354 $ 14,452 $ 42,637 $ 29,473
Other 46 15 95 46
Income (580) (231) (980) (418)
Amortization of debt issue costs 999 810 1,987 1,531
Loss on settlement of debt
facilities - - - 26,942
Debt amendment fees - 1,134 - 1,134
----------------------------------------------------------------------------
Finance charges $ 21,819 $ 16,180 $ 43,739 $ 58,708
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The Corporation had a foreign exchange gain of $5 million during
the second quarter of 2012 due to the strengthening of the U.S.
dollar versus the Canadian dollar and the impact thereof on the net
U.S. dollar denominated monetary position in the Canadian dollar
based companies.
Precision's effective tax rate on earnings before income taxes
for the first half of 2012 was 18%.
LIQUIDITY AND CAPITAL RESOURCES
The oilfield services business is inherently cyclical in nature.
Precision employs a disciplined approach to minimize costs through
operational management practices and a variable cost structure, and
to maximize revenues through term contract positions with a focus
of maintaining a strong balance sheet. This operational discipline
provides Precision with the financial flexibility to capitalize on
strategic acquisitions and internal growth opportunities at all
points in the business cycle.
Operating within a highly variable cost structure, Precision's
maintenance capital expenditures are tightly governed by and highly
responsive to activity levels with additional cost savings leverage
provided through Precision's internal manufacturing and supply
divisions. Expansion capital for new build rig programs require two
to five year term contracts in order to mitigate capital recovery
risk.
Liquidity remains sufficient as Precision had a cash balance of
$398 million and the US$550 million senior secured revolver
("Secured Facility") remains undrawn except for US$27 million in
outstanding letters of credit as at June 30, 2012. In addition to
the Secured Facility, Precision has available $40 million in
operating facilities which remains undrawn except for $10 million
in outstanding letters of credit as at June 30, 2012.
As at June 30, 2012 and December 31, 2011 Precision had the
following long-term debt balances:
(Stated in thousands of
Canadian dollars) June 30, 2012 December 31, 2011
----------------------------------------------------------------------------
Senior secured revolving
credit facility $ - $ -
Unsecured senior notes:
6.625% senior notes due 2020
(US$650 million) 662,415 661,050
6.5% senior notes due 2021
(US$400 million) 407,640 406,800
6.5% senior notes due 2019 200,000 200,000
----------------------------------------------------------------------------
1,270,055 1,267,850
Less net unamortized debt
issue costs (27,062) (28,234)
----------------------------------------------------------------------------
$ 1,242,993 $ 1,239,616
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at June 30, 2012, the Corporation was in compliance with the
covenants under the Secured Facility and expects to remain in
compliance with such covenants and have complete access to credit
lines during the remainder of 2012.
The current blended cash interest cost of Precision's debt is
approximately 6.6%.
Precision has designated its U.S. dollar denominated long-term
debt as a hedge of its investment in its United States operations.
To be accounted for as a hedge, the foreign currency denominated
long-term debt must be designated and documented as such and must
be effective at inception and on an ongoing basis.
QUARTERLY FINANCIAL SUMMARY
(Stated in thousands of Canadian dollars, except per share
amounts)
2011 2012
----------------------------------------------------------------------------
Quarters ended September 30 December 31 March 31 June 30
----------------------------------------------------------------------------
Revenue $ 492,944 $ 587,408 $ 640,066 $ 381,966
EBITDA(1) 186,248 229,839 245,574 97,192
Net earnings: 83,468 28,046 111,081 18,261
Per basic share 0.30 0.10 0.40 0.07
Per diluted share 0.29 0.10 0.39 0.06
Funds provided by
operations(1) 73,182 256,103 247,739 62,373
Cash provided by
operations 20,281 218,857 162,440 275,346
----------------------------------------------------------------------------
2010 2011
----------------------------------------------------------------------------
Quarters ended September 30 December 31 March 31 June 30
----------------------------------------------------------------------------
Revenue $ 359,152 $ 435,537 $ 525,350 $ 345,325
EBITDA(1) 112,607 144,518 186,411 92,566
Net earnings (loss): 56,286 (250) 65,560 16,403
Per basic share 0.20 - 0.24 0.06
Per diluted share 0.20 - 0.23 0.06
Funds provided by
operations(1) 126,811 133,903 192,337 70,766
Cash provided by
operations 67,575 75,064 117,322 176,312
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
ADDITIONAL GAAP MEASURES
Precision uses certain additional GAAP measures that are not
defined terms under IFRS to assess performance and believes these
measures provide useful supplemental information to investors. The
following are the measures Precision uses in assessing
performance.
EBITDA
Management believes that in addition to net earnings, EBITDA, as
derived from information reported in the Interim Consolidated
Statements of Earnings, is a useful supplemental measure as it
provides an indication of the results generated by Precision's
principal business activities prior to consideration of how those
activities are financed, the impact of foreign exchange, how the
results are taxed or how depreciation and amortization charges
affect results.
Operating Earnings
Management believes that in addition to net earnings, operating
earnings as reported in the Interim Consolidated Statements of
Earnings is a useful supplemental measure as it provides an
indication of the results generated by Precision's principal
business activities prior to consideration of how those activities
are financed, the impact of foreign exchange or how the results are
taxed.
Funds Provided by Operations
Management believes that in addition to cash provided by
operations, funds provided by operations, as reported in the
Interim Consolidated Statements of Cash Flow is a useful
supplemental measure as it provides an indication of the funds
generated by Precision's principal business activities prior to
consideration of working capital, which is primarily made up of
highly liquid balances.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND
STATEMENTS
Certain statements contained in this report, including
statements that contain words such as "could", "should", "can",
"anticipate", "estimate", "propose", "plan", "expect", "believe",
"will", "may", "continue", "project", "appears", "potential" and
similar expressions and statements relating to matters that are not
historical facts constitute "forward-looking information" within
the meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995 (collectively, "forward-looking
information and statements").
In particular, forward-looking information and statements
include, but are not limited to, the following: Super Series rigs
should continue to deliver superior utilization and returns even in
periods of lower activity; average dayrates are supported by
sustained demand for Tier 1 assets and new build Super Series rigs
entering our active fleet; for lower tier assets, the pricing
pressure experienced in the quarter to continue if commodity price
weakness and market uncertainty persists; we expect further
progress on international activity in the second half of the year;
demand remains solid for existing Tier 1 Super Series rigs for both
Canada and the United States and customers continue to show
interest in contracting new build Super Series rigs; Precision
believes it will have opportunities to contract additional new
build and upgraded rigs in the second half of 2012; Precision's
expected capital expenditures for 2012 and the anticipated uses of
capital and the timing of such expenditures; and the timing for
delivery of new build rigs.
These forward-looking information and statements are based on
certain assumptions and analysis made by the Corporation in light
of its experience and its perception of historical trends, current
conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However,
whether actual results, performance or achievements will conform to
the Corporation's expectations and predictions is subject to a
number of known and unknown risks and uncertainties which could
cause actual results to differ materially from the Corporation's
expectations. Such risks and uncertainties include, but are not
limited to: fluctuations in the price and demand for oil and
natural gas; fluctuations in the level of oil and natural gas
exploration and development activities; fluctuations in the demand
for contract drilling, well servicing and ancillary oilfield
services; capital market liquidity available to fund customer
drilling programs; availability of cash flow, debt and/or equity
sources to fund the Corporation's capital and operating
requirements, as needed; the effects of seasonal and weather
conditions on operations and facilities; the existence of
competitive operating risks inherent in contract drilling, well
servicing and ancillary oilfield services; general economic, market
or business conditions; changes in laws or regulations;
interpretation of tax filing position for prior period
transactions; the availability of qualified personnel, management
or other key inputs; currency exchange fluctuations; and other
unforeseen conditions which could impact the use of services
supplied by Precision.
Consequently, all of the forward-looking information and
statements made in this report are qualified by these cautionary
statements and there can be no assurance that the actual results or
developments anticipated by the Corporation will be realized or,
even if substantially realized, that they will have the expected
consequences to, or effects on, the Corporation or its business or
operations. Readers are therefore cautioned not to place undue
reliance on such forward-looking information and statements. Except
as may be required by law, the Corporation assumes no obligation to
update publicly any such forward-looking information and
statements, whether as a result of new information, future events
or otherwise.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Stated in thousands of
Canadian dollars) June 30, 2012 December 31, 2011
----------------------------------------------------------------------------
ASSETS
Current assets:
Cash $ 398,344 $ 467,476
Accounts receivable 394,956 576,243
Inventory 13,135 7,163
----------------------------------------------------------------------------
Total current assets 806,435 1,050,882
Non-current assets:
Income tax recoverable 64,579 64,579
Property, plant and equipment 3,241,526 2,942,296
Intangibles 4,872 6,471
Goodwill 363,727 363,646
----------------------------------------------------------------------------
Total non-current assets 3,674,704 3,376,992
----------------------------------------------------------------------------
Total assets $ 4,481,139 $ 4,427,874
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 329,312 $ 436,667
Income tax payable 30,303 3,786
----------------------------------------------------------------------------
Total current liabilities 359,615 440,453
Non-current liabilities:
Share based compensation 5,149 11,303
Provisions and other 18,949 16,121
Long-term debt 1,242,993 1,239,616
Deferred tax liabilities 585,083 587,790
----------------------------------------------------------------------------
Total non-current liabilities 1,852,174 1,854,830
Shareholders' equity:
Shareholders' capital 2,250,440 2,248,217
Contributed surplus 21,847 18,396
Retained earnings (deficit) 46,182 (83,160)
Accumulated other
comprehensive loss (49,119) (50,862)
----------------------------------------------------------------------------
Total shareholders' equity 2,269,350 2,132,591
----------------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 4,481,139 $ 4,427,874
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three months ended June Six months ended June
30, 30,
(Stated in thousands of
Canadian dollars, except
per share amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Revenue $ 381,966 $ 345,325 $ 1,022,032 $ 870,675
Expenses:
Operating 259,513 222,574 616,099 526,899
General and
administrative 25,261 30,185 63,167 64,799
----------------------------------------------------------------------------
Earnings before income
taxes, other items and
depreciation and
amortization 97,192 92,566 342,766 278,977
Depreciation and
amortization 66,669 52,593 141,493 115,912
----------------------------------------------------------------------------
Operating earnings 30,523 39,973 201,273 163,065
Other items:
Foreign exchange (5,034) (527) 333 2,805
Finance charges 21,819 16,180 43,739 58,708
Other (758) - (758) -
----------------------------------------------------------------------------
Earnings before income
taxes 14,496 24,320 157,959 101,552
Income taxes:
Current 9,186 1,012 32,025 2,152
Deferred (12,951) 6,905 (3,408) 17,437
----------------------------------------------------------------------------
(3,765) 7,917 28,617 19,589
----------------------------------------------------------------------------
Net earnings $ 18,261 $ 16,403 $ 129,342 $ 81,963
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share:
Basic $ 0.07 $ 0.06 $ 0.47 $ 0.30
Diluted $ 0.06 $ 0.06 $ 0.45 $ 0.28
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three months ended Six months ended June
June 30, 30,
(Stated in thousands of
Canadian dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net earnings $ 18,261 $ 16,403 $ 129,342 $ 81,963
Unrealized gain (loss) on
translation of assets and
liabilities of operations
denominated in foreign
currency 28,972 (10,044) 3,948 (36,852)
Foreign exchange gain (loss)
on net investment hedge
with U.S. denominated debt,
net of tax (21,000) 4,255 (2,205) 17,199
----------------------------------------------------------------------------
Comprehensive income $ 26,233 $ 10,614 $ 131,085 $ 62,310
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three months ended June Six months ended June
30, 30,
(Stated in thousands of
Canadian dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
Cash provided by (used
in):
Operations:
Net earnings $ 18,261 $ 16,403 $ 129,342 $ 81,963
Adjustments for:
Long-term compensation
plans 1,776 5,167 11,227 14,012
Depreciation and
amortization 66,669 52,593 141,493 115,912
Foreign exchange (5,346) (836) 206 2,508
Finance charges 21,819 16,180 43,739 58,708
Income taxes (3,765) 7,917 28,617 19,589
Other 1,428 (2,619) 1,599 (2,420)
Income taxes paid (3,764) (1,946) (4,574) (2,511)
Income taxes recovered 306 - 342 246
Interest paid (35,523) (22,287) (42,783) (25,339)
Interest received 512 194 904 435
----------------------------------------------------------------------------
Funds provided by
operations 62,373 70,766 310,112 263,103
Changes in non-cash
working capital
balances 212,973 105,546 127,674 30,531
----------------------------------------------------------------------------
275,346 176,312 437,786 293,634
Investments:
Business acquisitions,
net of cash acquired (25) (34) (25) (33,177)
Purchase of property,
plant and equipment (221,074) (113,894) (442,757) (178,694)
Proceeds on sale of
property, plant and
equipment 3,730 3,349 8,809 4,084
Changes in income tax
recoverable - - - (108,176)
Changes in non-cash
working capital
balances (35,594) 12,550 (73,705) (16,790)
----------------------------------------------------------------------------
(252,963) (98,029) (507,678) (332,753)
Financing:
Repayment of long-term
debt - - - (175,000)
Premium paid on
settlement of
unsecured senior notes - - - (26,688)
Debt issue costs - (519) - (4,358)
Debt facility amendment
costs - (1,134) - (1,134)
Increase in long-term
debt - - - 200,000
Issuance of common
shares on the exercise
of options 133 703 1,305 1,139
Changes in non-cash
working capital
balances - - - (746)
----------------------------------------------------------------------------
133 (950) 1,305 (6,787)
----------------------------------------------------------------------------
Effect of exchange rate
changes on cash and
cash equivalents 6,184 205 (545) (3,699)
----------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 28,700 77,538 (69,132) (49,605)
Cash and cash
equivalents, beginning
of period 369,644 129,688 467,476 256,831
----------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 398,344 $ 207,226 $ 398,344 $ 207,226
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
(Stated in thousands of Canadian dollars)
----------------------------------------------------------------------------
Shareholders' Contributed
capital surplus
----------------------------------------------------------------------------
Balance at January 1, 2012 $ 2,248,217 $ 18,396
Net earnings for the period - -
Other comprehensive income for the
period - -
Share options exercised 1,993 (688)
Issued on redemption of non-
management directors DSUs 221 (221)
Issued on waiver of right to dissent
by dissenting unitholder 9 (3)
Share based compensation expense - 4,363
----------------------------------------------------------------------------
Balance at June 30, 2012 $ 2,250,440 $ 21,847
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Stated in thousands of Canadian dollars)
----------------------------------------------------------------------------
Accumulated
other Retained
comprehensive earnings Total
loss (deficit) equity
----------------------------------------------------------------------------
Balance at January 1, 2012 $ (50,862) $ (83,160) $ 2,132,591
Net earnings for the period - 129,342 129,342
Other comprehensive income for the
period 1,743 - 1,743
Share options exercised - - 1,305
Issued on redemption of non-
management directors DSUs - - -
Issued on waiver of right to dissent
by dissenting unitholder - - 6
Share based compensation expense - - 4,363
----------------------------------------------------------------------------
Balance at June 30, 2012 $ (49,119) $ 46,182 $ 2,269,350
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Stated in thousands of Canadian dollars)
---------------------------------------------------------------------------
Shareholders' Contributed
capital surplus
---------------------------------------------------------------------------
Balance at January 1, 2011 $ 2,244,417 $ 11,266
Net earnings for the period - -
Other comprehensive loss for the
period - -
Share options exercised 1,736 (597)
Share based compensation expense - 4,394
---------------------------------------------------------------------------
Balance at June 30, 2011 $ 2,246,153 $ 15,063
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Stated in thousands of Canadian dollars)
---------------------------------------------------------------------------
Accumulated
other
comprehensive Total
loss Deficit equity
---------------------------------------------------------------------------
Balance at January 1, 2011 $ (46,220) $ (276,637) $ 1,932,826
Net earnings for the period - 81,963 81,963
Other comprehensive loss for the
period (19,653) - (19,653)
Share options exercised - - 1,139
Share based compensation expense - - 4,394
---------------------------------------------------------------------------
Balance at June 30, 2011 $ (65,873) $ (194,674) $ 2,000,669
---------------------------------------------------------------------------
---------------------------------------------------------------------------
SECOND QUARTER 2012 EARNINGS CONFERENCE CALL AND WEBCAST
Precision Drilling Corporation has scheduled a conference call
and webcast to begin promptly at 12:00 noon MT (2:00 p.m. ET) on
Wednesday, July 25, 2012.
The conference call dial in numbers are 1-866-226-1793 or
416-340-2218
A live webcast of the conference call will be accessible on
Precision's website at www.precisiondrilling.com by selecting
"Investor Centre", then "Webcasts". Shortly after the live webcast,
an archived version will be available for approximately 30
days.
An archived recording of the conference call will be available
approximately one hour after the completion of the call until
August 1, 2012 by dialing 1-800-408-3053 or 905-694-9451, pass code
6963179.
About Precision
Precision is a leading provider of safe and High Performance,
High Value services to the oil and gas industry. Precision provides
customers with access to an extensive fleet of contract drilling
rigs, directional drilling services, well service & snubbing
rigs, coiled tubing services, camps, rental equipment, and
wastewater treatment units backed by a comprehensive mix of
technical support services and skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta, Canada.
Precision is listed on the Toronto Stock Exchange under the trading
symbol "PD" and on the New York Stock Exchange under the trading
symbol "PDS".
Contacts: Precision Drilling Corporation Carey Ford Vice
President, Finance and Investor Relations 403.716.4575 403.716.4755
(FAX) Precision Drilling Corporation Suite 800, 525 - 8th Avenue
S.W. Calgary, Alberta, Canada T2P 1G1 403.716.4575 403.716.4755
(FAX) www.precisiondrilling.com
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