27 July 2013 – Canada’s largest driller Precision Drilling has seen its quarterly profits near wiped out by lower activity, higher costs and flooding.
The Calgary-based company posted quarterly net incomes of just $500,000, down from $12 million in the year-ago period even though revenues were only down 1% to $378.89 million.
Precision Drilling chief executive Kevin Neveu admitted much of the company’s business was “tied to the fundamentals of the Canadian oilfield”, but added that the driller’s newer high-spec rigs and its operations outside North America were seeing demand growth.
Precision Drilling said that it had been hit with a $7 million rise in finance costs mainly stemming from share-price linked incentive compensation, while its tax and operating costs also rose.
The land driller also cited lower activity in North America as a result of fewer wells being drilled because of low gas prices, as well as the floods in Canada.
Its rig utilisation rates by number of days decreased by 17% in the US and by 10% in Canada over the period.
*Bill Lehane, Upstreamonline