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. This news release contains references
to certain Financial Measures and Ratios, including Adjusted EBITDA
(earnings before income taxes, loss (gain) on investments and other
assets, gain on repurchase of unsecured senior notes, finance
charges, foreign exchange, gain on asset disposals and depreciation
and amortization), Funds Provided by (Used in) Operations, Net
Capital Spending and Working Capital. These terms do not have
standardized meanings prescribed under International Financial
Reporting Standards (
IFRS) and may not be
comparable to similar measures used by other companies, see
“Financial Measures and Ratios” later in this news release.
Precision Drilling announces strong 2023 third
quarter financial results:
- Revenue increased to $447 million compared with $429 million in
the third quarter of 2022 driven by higher drilling day rates,
offset in part by lower drilling and service activity.
- Revenue per utilization day continues to be strong and grew 20%
in Canada to $32,224 and 26% in the U.S. to US$35,135 compared to
the same quarter last year.
- We continued to scale our AlphaTM digital technologies and
EverGreenTM suite of environmental solutions across our Super
Triple rig fleet, increasing revenue from these offerings by 30%
year over year. Approximately 75% of our Super Triple rig fleet is
equipped with AlphaTM and at least one EverGreenTM product.
- Adjusted EBITDA(1) was $115 million and included $31 million of
share-based compensation as our share price increased 41% during
the quarter, bringing our year to date share-based compensation to
$22 million. In the third quarter of 2022, Adjusted EBITDA was $120
million and included a $6 million charge for share-based
compensation.
- Net earnings were $20 million or $1.45 per share compared to
$31 million or $2.26 per share in 2022. For the first nine months
of the year, we have generated net earnings of $10.45 per
share.
- During the quarter, we generated cash from operations of $89
million and repurchased and cancelled US$18 million of 2026
unsecured senior notes.
- As at September 30, 2023, we have reduced total debt by $126
million since the beginning of the year and remain on track to meet
our 2023 debt reduction target of $150 million.
- We ended the quarter with $49 million of cash and more than
$600 million of available liquidity.
- In Canada, we averaged 57 active rigs in the third quarter,
similar to our activity for the same quarter last year. Demand for
our Super Triple and Super Single pad-capable fleets continues to
exceed supply and we expect these rigs to remain fully utilized
well into 2024.
- In the U.S., we averaged 41 active rigs compared to 57 in the
third quarter of 2022 due to lower industry activity year over
year.
- Internationally, we activated our seventh rig in late September
and expect to activate our eighth rig in the next few weeks. In
2024, we expect to have eight rigs working under long-term
contracts, increasing our international earnings approximately 50%
over 2023.
- Completion and Production Services generated revenue of $58
million and Adjusted EBITDA of $14 million, largely consistent with
the third quarter of 2022.
- We expect the acquisition of CWC Energy Service Corp.
(CWC) to be completed in the fourth quarter and
provide accretive cash flow on a per share basis in 2024.
- In response to increased customer-funded rig upgrades and to
facilitate the strategic purchase of certain long-lead items, we
have increased our 2023 capital spending budget from $195 million
to $215 million.
(1)
See “FINANCIAL MEASURES AND RATIOS.”
Precision’s President and CEO, Kevin Neveu,
stated:
“Precision’s third quarter financial results and
recent customer contracting demonstrate strong demand for our Super
Series rigs, AlphaTM technologies, and EverGreenTM products. The
North American land drilling market has matured with participants
demonstrating capital discipline and operators rewarding the
highest performance drilling contractors.
“Our Canadian business continues to showcase
this trend. While Canada’s industry activity during the third
quarter was 6% lower than the same period last year, utilization of
Precision’s Super Triple and Super Single rigs was up year over
year, with 29 Super Triples and 32 Super Singles active during the
quarter. Despite customer capital discipline and lower industry
activity, customer demand for Super-Spec rigs has never been higher
and we continue to strengthen our contract book. Since the end of
the second quarter, we have added thirteen term contracts with
take-or-pay provisions for our Super Triples and customer-funded
upgrades for our Super Singles. The outlook for Canada remains
encouraging with 67 rigs active today, significant oil and natural
gas pipeline takeaway capacity coming online in early 2024, and
current customer conversations indicating incremental demand for
Super Triple and Super Single drilling programs in 2024.
“In the U.S., our rig count was stable
throughout the third quarter, and we currently have 44 rigs active.
Customer interest in AlphaTM digital technologies and our
EverGreenTM suite of environmental solutions remains strong, with
virtually all our U.S. Super Triple rigs utilizing
AlphaAutomationTM and 60% generating incremental revenue from
EverGreenTM products. With firm oil prices and a new budget cycle,
we expect customer outlook to improve and drive more drilling
activity later this year and into 2024.
“Internationally, we currently have seven rigs
running and expect to activate our eighth rig within the next few
weeks. With our additional rig activations this year, we expect our
2024 international earnings to increase by approximately 50% over
2023, and should remain at this higher level for the next several
years as our recent contract awards are under five-year terms.
“During the third quarter, our Adjusted EBITDA
was $115 million and excluding our share-based compensation of $31
million increased year over year. This increase was driven by our
Canadian drilling operations where strong fundamentals continue to
support improving returns. Net earnings were $20 million for the
quarter and year to date we have delivered earnings of $10.45 on a
per share basis.
“Cash generated from operations during the third
quarter was $89 million compared to $8 million last year,
reflecting the efforts of our team to focus on cash generation.
Year to date, we have reduced our total debt by $126 million and
returned $13 million to shareholders through share repurchases and
are well on track to achieve the targets we set at the beginning of
the year. With strong demand for our Super Series rigs, we are
increasing our 2023 capital budget by $20 million to support
customer-funded rig upgrades and the purchase of certain long-lead
items.
“In September, we announced the acquisition of
CWC, which will position Precision as the premier well service
provider in Canada and bolster our drilling operations in both the
U.S. and Canada. We expect to realize $20 million in operational
synergies and generate accretive cash flow on a per share basis in
2024.
“I am proud of the discipline Precision
continues to show throughout the organization despite short-term
industry cyclicality. We remain focused on our strategic
priorities, which include delivering operational excellence,
maximizing free cash flow, and improving our balance sheet. With a
focused strategy and discipline, I am confident Precision will
continue to deliver increased shareholder value,” concluded Mr.
Neveu.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial
Highlights |
|
|
|
|
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
(Stated
in thousands of Canadian dollars, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Revenue |
|
446,754 |
|
|
|
429,335 |
|
|
|
4.1 |
|
|
|
1,430,983 |
|
|
|
1,106,690 |
|
|
|
29.3 |
|
Adjusted EBITDA(1) |
|
114,575 |
|
|
|
119,561 |
|
|
|
(4.2 |
) |
|
|
459,887 |
|
|
|
220,515 |
|
|
|
108.6 |
|
Net earnings (loss) |
|
19,792 |
|
|
|
30,679 |
|
|
|
(35.5 |
) |
|
|
142,522 |
|
|
|
(37,776 |
) |
|
|
(477.3 |
) |
Cash provided by
operations |
|
88,500 |
|
|
|
8,142 |
|
|
|
987.0 |
|
|
|
330,316 |
|
|
|
78,022 |
|
|
|
323.4 |
|
Funds provided by
operations(1) |
|
91,608 |
|
|
|
81,327 |
|
|
|
12.6 |
|
|
|
388,220 |
|
|
|
171,655 |
|
|
|
126.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in investing
activities |
|
34,278 |
|
|
|
31,711 |
|
|
|
8.1 |
|
|
|
157,157 |
|
|
|
98,836 |
|
|
|
59.0 |
|
Capital spending by spend
category(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expansion and upgrade |
|
13,479 |
|
|
|
25,461 |
|
|
|
(47.1 |
) |
|
|
39,439 |
|
|
|
50,606 |
|
|
|
(22.1 |
) |
Maintenance and infrastructure |
|
38,914 |
|
|
|
25,642 |
|
|
|
51.8 |
|
|
|
108,463 |
|
|
|
76,335 |
|
|
|
42.1 |
|
Proceeds on sale |
|
(6,698 |
) |
|
|
(22,337 |
) |
|
|
(70.0 |
) |
|
|
(20,724 |
) |
|
|
(32,033 |
) |
|
|
(35.3 |
) |
Net capital spending(1) |
|
45,695 |
|
|
|
28,766 |
|
|
|
58.9 |
|
|
|
127,178 |
|
|
|
94,908 |
|
|
|
34.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
1.45 |
|
|
|
2.26 |
|
|
|
(35.8 |
) |
|
|
10.45 |
|
|
|
(2.79 |
) |
|
|
(474.6 |
) |
Diluted |
|
1.45 |
|
|
|
2.03 |
|
|
|
(28.6 |
) |
|
|
9.84 |
|
|
|
(2.79 |
) |
|
|
(452.7 |
) |
(1) See
“FINANCIAL MEASURES AND RATIOS.”
Operating
Highlights |
|
|
|
|
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
Contract drilling rig fleet |
|
224 |
|
|
|
225 |
|
|
|
(0.4 |
) |
|
|
224 |
|
|
|
225 |
|
|
|
(0.4 |
) |
Drilling rig utilization
days: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
3,815 |
|
|
|
5,287 |
|
|
|
(27.8 |
) |
|
|
13,823 |
|
|
|
14,914 |
|
|
|
(7.3 |
) |
Canada |
|
5,284 |
|
|
|
5,432 |
|
|
|
(2.7 |
) |
|
|
15,247 |
|
|
|
14,461 |
|
|
|
5.4 |
|
International |
|
554 |
|
|
|
552 |
|
|
|
0.4 |
|
|
|
1,439 |
|
|
|
1,638 |
|
|
|
(12.1 |
) |
Revenue per utilization
day: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. (US$) |
|
35,135 |
|
|
|
27,847 |
|
|
|
26.2 |
|
|
|
35,216 |
|
|
|
25,864 |
|
|
|
36.2 |
|
Canada (Cdn$) |
|
32,224 |
|
|
|
26,927 |
|
|
|
19.7 |
|
|
|
32,583 |
|
|
|
25,843 |
|
|
|
26.1 |
|
International (US$) |
|
51,570 |
|
|
|
50,216 |
|
|
|
2.7 |
|
|
|
51,306 |
|
|
|
51,687 |
|
|
|
(0.7 |
) |
Operating costs per
utilization day: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. (US$) |
|
21,655 |
|
|
|
18,220 |
|
|
|
18.9 |
|
|
|
20,217 |
|
|
|
18,484 |
|
|
|
9.4 |
|
Canada (Cdn$) |
|
18,311 |
|
|
|
16,893 |
|
|
|
8.4 |
|
|
|
19,239 |
|
|
|
16,803 |
|
|
|
14.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service rig fleet |
|
121 |
|
|
|
135 |
|
|
|
(10.4 |
) |
|
|
121 |
|
|
|
135 |
|
|
|
(10.4 |
) |
Service
rig operating hours |
|
46,894 |
|
|
|
52,340 |
|
|
|
(10.4 |
) |
|
|
144,944 |
|
|
|
120,994 |
|
|
|
19.8 |
|
Financial Position |
|
|
|
|
|
|
(Stated in thousands of Canadian dollars, except ratios) |
September 30, 2023 |
|
|
December 31, 2022 |
|
|
Working capital(1) |
|
177,740 |
|
|
|
60,641 |
|
|
Cash |
|
49,065 |
|
|
|
21,587 |
|
|
Long-term debt |
|
963,827 |
|
|
|
1,085,970 |
|
|
Total long-term financial
liabilities |
|
1,054,661 |
|
|
|
1,206,619 |
|
|
Total assets |
|
2,808,201 |
|
|
|
2,876,123 |
|
|
Long-term debt to long-term debt plus equity ratio (1) |
|
0.41 |
|
|
|
0.47 |
|
|
(1) See
“FINANCIAL MEASURES AND RATIOS.”
Summary for the three months ended September 30,
2023:
- Revenue of $447 million was 4% higher than 2022 due to the
further strengthening of drilling and service revenue rates,
partially offset by lower activity. Drilling rig utilization days
decreased 28% and 3% in the U.S. and Canada, respectively, while
international activity remained consistent. Our service rig
operating hours decreased 10% as compared with 2022.
- Adjusted EBITDA was $115 million as compared with $120 million
in 2022. Our lower 2023 Adjusted EBITDA was primarily the result of
increased share-based compensation charges and lower activity,
partially offset by higher revenue rates. Share-based compensation
was $31 million as compared with $6 million in 2022. Please refer
to “Other Items” later in this news release for additional
information on share-based compensation charges.
- Adjusted EBITDA as a percentage of revenue was 26% as compared
with 28% in 2022.
- Our U.S. revenue per utilization day was US$35,135 compared
with US$27,847 in 2022. The increase was primarily the result of
higher fleet average day rates and higher idle but contracted rig
revenue. We recognized revenue from idle but contracted rigs of
US$6 million as compared with US$1 million in 2022. Consistent with
2022, we did not recognize revenue from turnkey projects during the
quarter. Revenue per utilization day, excluding the impact of idle
but contracted rigs was US$33,543, compared to US$27,682 in 2022,
an increase of US$5,861 or 21%. Revenue per utilization day,
excluding idle but contracted rigs, decreased US$1,014 from the
second quarter of 2023.
- Our U.S. operating costs per utilization day increased to
US$21,655 compared with US$18,220 in 2022. The increase was
primarily due to higher rig operating costs, repairs and
maintenance and the impact of fixed costs being spread over fewer
activity days. Our higher rig operating costs in the current period
pertained to field rate increases completed in the fourth quarter
of 2022. U.S. operating costs per utilization day, excluding
turnkey, was US$21,623 compared with US$18,236 in 2022.
Sequentially, excluding the impact of turnkey activity, operating
costs per utilization day increased US$2,677. The increase was
primarily due to higher repairs and maintenance and the impact of
fixed costs being spread over fewer activity days.
- In Canada, revenue per utilization day was $32,224 compared
with $26,927 in 2022. The increase was a result of higher average
day rates and customer cost recoveries. Sequentially, revenue per
utilization day decreased $1,311 due to lower customer cost
recoveries.
- Our Canadian operating costs per utilization day increased to
$18,311, compared with $16,893 in 2022, due to higher field wages,
repairs and maintenance and costs that were recovered from our
customers. Sequentially, our daily operating costs decreased $3,021
due to lower repairs and maintenance, customer cost recoveries and
operating overheads being spread over a higher activity base.
- Completion and Production Services revenue and Adjusted EBITDA
were $58 million and $14 million, respectively, compared with $57
million and $15 million in 2022.
- We realized US$29 million of international contract drilling
revenue compared with US$28 million in 2022.
- General and administrative expenses were $44 million as
compared with $25 million in 2022. The increase was primarily due
to higher share-based compensation charges.
- Net finance charges were $20 million, a decrease of $3 million
compared with 2022 and was the result of lower outstanding
long-term debt.
- Cash provided by operations was $89 million compared with $8
million in 2022. We generated $92 million of funds provided by
operations compared with $81 million in 2022. Our increased day
rates, revenue efficiency and operational leverage continued to
drive higher cash generation in the current quarter.
- Capital expenditures were $52 million compared with $51 million
in 2022. Capital spending by spend category (see “FINANCIAL
MEASURES AND RATIOS”) included $13 million for expansion and
upgrades and $39 million for the maintenance of existing assets,
infrastructure, and intangible assets.
- We repaid $26 million of debt, repurchasing and cancelling
US$18 million of 2026 unsecured senior notes, and ended the quarter
with $49 million of cash and more than $600 million of available
liquidity.
Summary for the nine months ended September 30,
2023:
- Revenue for the first nine months of 2023 was $1,431 million,
an increase of 29% from 2022.
- Adjusted EBITDA was $460 million as compared with $221 million
in 2022. Our higher Adjusted EBITDA was attributable to increased
revenue rates, higher Canadian drilling and service activity and
lower share-based compensation, partially offset by lower U.S. and
international drilling activity.
- General and administrative costs were $83 million, a decrease
of $19 million from 2022 primarily due to lower share-based
compensation, partially offset by higher labour-related costs and
the impact of the weakening Canadian dollar on our translated U.S.
dollar-denominated costs.
- Net finance charges were $64 million, consistent with 2022, as
the impact of our lower debt balance was offset by higher variable
debt interest rates and higher translated U.S. dollar-denominated
interest expense due to the weakening of the Canadian dollar.
- Cash provided by operations was $330 million as compared with
$78 million in 2022. Funds provided by operations in 2023 were $388
million, an increase of $217 million from the comparative
period.
- Capital expenditures were $148 million in 2023, an increase of
$21 million from 2022. Capital spending by spend category included
$39 million for expansion and upgrades and $108 million for the
maintenance of existing assets, infrastructure, and intangible
assets.
- Year to date, we have reduced our total debt by $126 million
through the full repayment of our Senior Credit Facility and the
repurchase and cancellation of US$48 million of our 2026 unsecured
senior notes. In addition, we repurchased and cancelled 193,616
common shares for $13 million under our Normal Course Issuer Bid
(NCIB).
STRATEGY
Precision’s vision is to be globally recognized
as the High Performance, High Value provider of land drilling
services. We work toward this vision by defining and measuring our
results against strategic priorities that we establish at the
beginning of every year.
Precision’s 2023 strategic priorities and the
progress made during the third quarter and year to date are as
follows:
- Deliver High Performance, High Value service through
operational excellence.
- Year to date, we have increased our Canadian drilling rig
utilization days and well servicing rig operating hours,
maintaining our position as the leading provider of high-quality
and reliable services in Canada.
- Activated our seventh rig in the Middle East and expect to have
an eighth rig working in the next few weeks. These eight rigs
represent over US$500 million in backlog revenue that stretches
into 2028.
- Announced the acquisition of CWC, expanding our Canadian well
servicing business and our drilling fleets in both the U.S. and
Canada. The proposed transaction is expected to provide
approximately $20 million in annual synergies and be accretive on a
2024 cash flow per share basis.
- Reinvested $148 million year to date into our equipment and
infrastructure as we progress toward our total expected 2023
investment of $215 million.
- Maximize free cash flow by increasing Adjusted EBITDA
margins, revenue efficiency, and growing revenue from
Alpha™ technologies and EverGreen™ suite of environmental
solutions.
- Realized third quarter daily operating margins (revenue per
utilization day less operating costs per utilization day) of
$13,913 in Canada and US$13,480 in the U.S., representing increases
of 39% and 40%, respectively, compared with the third quarter of
2022.
- Grew combined Alpha™ technologies and
EverGreen™ suite of environmental solutions third quarter
revenue by 30% compared with the same quarter last year.
- At September 30, we had 74 of our AC Super Triple rigs equipped
with Alpha™ technologies, representing a 19% increase over the
third quarter of 2022.
- Continued to scale our EverGreen™ suite of environmental
solutions. Approximately 75% of our Super Triple fleet is equipped
with at least one EverGreen™ product, including 11 field
deployed EverGreen™ Battery Energy Storage Systems
(BESS).
- Reduce debt by at least $150 million and allocate 10%
to 20% of free cash flow before debt repayments for share
repurchases. Long-term debt reduction target of $500 million
between 2022 and 2025 and sustained Net Debt to Adjusted EBITDA
ratio(1) of below 1.0 times by the end of 2025.
- Generated significant third quarter cash from operations of $89
million which allowed us to repurchase and cancel US$18 million of
2026 unsecured senior notes.
- As of September 30, 2023, we have reduced debt by $126 million
and remain committed to reducing debt by at least $150 million in
2023.
- We have allocated $13 million of free cash flow to share
repurchases for the first nine months of the year and in September
we renewed our NCIB for an additional year as we believe it
continues to be another tool to enhance shareholder value.
- We remain committed to our long-term debt reduction target and
reaching a sustained Net Debt to Adjusted EBITDA ratio of below 1.0
times by the end of 2025.
(1)
See “FINANCIAL MEASURES AND RATIO.”
OUTLOOK
Energy industry fundamentals continue to support
drilling activity for oil and natural gas despite economic
uncertainty and geopolitical instability. During the third quarter,
persistent challenges and stresses from interest rate hikes and
recessionary risks began to weaken, and commodity prices moved
higher. While the recent conflict in the Middle East has had little
direct impact on global oil and natural gas supply, an escalation
of events and involvement from additional regional powers could
disrupt supply in the world’s top oil producing region.
Today, oil prices are supported by increasing
global demand and limited supply growth as OPEC continues to honour
its lower production quotas and producers remain committed to
returning capital to shareholders versus increasing production.
Natural gas has demonstrated short-term price weaknesses; however,
this lower-carbon energy source is becoming increasingly favored as
countries around the world stress the importance of sustainability,
decarbonization and energy security. With demand for Liquefied
Natural Gas (LNG) exports grog and the next wave
of North American LNG projects expected to begin coming online in
2025 (including LNG Canada), we anticipate a sustained period of
elevated natural gas drilling activity in both the U.S. and
Canada.
In Canada, Precision’s year to date drilling
activity has surpassed 2022 levels and we expect high activity
levels to continue into 2024, due to strong oil prices and
increases in hydrocarbon export capacity. The Trans Mountain oil
pipeline expansion and the Coastal GasLink pipeline are each
expected to begin operations in the first quarter of 2024.
Northwestern Alberta and Northeastern British Columbia natural gas
developments are prime beneficiaries of the LNG Canada project and
the January 2023 agreement between the Government of British
Columbia and the Blueberry River First Nation, which has
facilitated a significant increase in drilling license approvals
and should lead to more drilling activity in the region. Large pad
drilling programs are ideally suited for our Super Triple rigs,
resulting in strong customer interest for these rigs for the next
several years. Our Super Triple fleet is currently fully utilized
and we expect customer demand to continue to exceed supply, driving
higher day rates, daily operating margins and longer-term
take-or-pay contracts. We are currently upgrading one of our
Canadian rigs and expect to add it to our Super Triple Canadian
fleet in January 2024 on a three-year term contract, bringing our
fleet size to 30.
In the Canadian heavy oil market, we expect
activity levels to remain strong as Canadian producers are
benefiting from favorable oil pricing due to a weaker Canadian
dollar exchange rate and improving heavy oil differentials.
Precision’s Super Single rigs are well suited for long-term
conventional heavy oil development in the oil sands and Clearwater
formation. We expect our Super Single pad-capable rigs to be fully
utilized well into 2024, driving higher day rates.
In the U.S., drilling activity had been
increasing since mid-2020 but began to weaken in early 2023 due to
lower natural gas prices and oil price volatility. As at October
25, 2023, the Baker Hughes’ active U.S. land rig count declined 21%
from the start of the year. If oil prices remain stable and around
today’s level, we expect demand to improve late in the fourth
quarter and gain momentum in 2024 as customers embark on a new
budget cycle and seek to maintain or possibly increase production
levels and replenish inventories.
Our Alpha™ technologies and
EverGreen™ suite of environmental solutions continue to gain
momentum and have become key competitive differentiators for our
rigs as these offerings deliver exceptional value to our customers
by reducing risks, well construction costs and carbon footprint. We
currently have 11 EverGreen™ BESS deployed in the field and
have commitments for two additional deployments by year end.
Precision’s EverGreen™ BESS have proven to be an economically
viable emissions reduction solution for our customers and we
anticipate continued demand for additional deployments in 2024.
Internationally, we currently have seven rigs
working on term contracts, four in Kuwait and three in the Kingdom
of Saudi Arabia, increasing to eight in the next few weeks. In
2024, our international earnings are expected to increase
approximately 50% over 2023 levels and provide stable and
predictable cash flow that stretches into 2028. We continue to bid
our remaining idle rigs within the region and remain optimistic
about our ability to secure rig reactivations.
Precision is the leading provider of
high-quality and reliable well services in Canada and the outlook
for this business is positive. High customer demand for well
maintenance and completion services is expected to add tightness to
the availability of staffed service rigs, supporting healthy
activity and pricing into the foreseeable future. In September,
Precision announced the acquisition of CWC, which will allow us to
enhance our Canadian well service offering with high-quality rigs
in complementary geographic regions. The acquisition is expected to
close in the fourth quarter of 2023 and provide accretive cash flow
on a per share basis in 2024.
Contracts
The following chart outlines the average number
of drilling rigs under term contract by quarter as at October 25,
2023. For those quarters ending after September 30, 2023, this
chart represents the minimum number of term contracts from which we
will earn revenue. We expect the actual number of contracted rigs
to vary in future periods as we sign additional term contracts.
|
|
Average for the quarter ended 2022 |
|
|
Average for the quarter ended 2023 |
|
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
Average rigs under term
contract as of October 25, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
27 |
|
|
|
29 |
|
|
|
31 |
|
|
|
35 |
|
|
|
40 |
|
|
|
37 |
|
|
|
32 |
|
|
|
28 |
|
Canada |
|
|
6 |
|
|
|
8 |
|
|
|
10 |
|
|
|
16 |
|
|
|
19 |
|
|
|
23 |
|
|
|
23 |
|
|
|
21 |
|
International |
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
4 |
|
|
|
5 |
|
|
|
7 |
|
|
|
8 |
|
Total |
|
|
39 |
|
|
|
43 |
|
|
|
47 |
|
|
|
57 |
|
|
|
63 |
|
|
|
65 |
|
|
|
62 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following chart outlines the average number
of drilling rigs that we had under term contract for 2022 and the
average number of rigs we have under term contract as at October
25, 2023.
|
|
Average for the year ended |
|
|
|
|
|
2022 |
|
|
2023 |
|
|
|
Average rigs under term
contract as of October 25, 2023: |
|
|
|
|
|
|
|
|
U.S. |
|
|
31 |
|
|
|
34 |
|
|
|
Canada |
|
|
10 |
|
|
|
22 |
|
|
|
International |
|
|
6 |
|
|
|
6 |
|
|
|
Total |
|
|
47 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Canada, term contracted rigs normally
generate 250 utilization days per year because of the seasonal
nature of well site access. Accordingly, our anticipated Canadian
rigs under term contract may fluctuate as customers complete their
commitments earlier than projected. In most regions in the U.S. and
internationally, term contracts normally generate 365 utilization
days per year. Internationally, we expect to have eight rigs
operating under long-term contract by the end of 2023.
Drilling Activity
The following chart outlines the average number
of drilling rigs that we had working or moving by quarter for the
periods noted.
|
Average for the quarter ended 2022 |
Average for the quarter ended 2023 |
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
Average Precision active rig
count: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
51 |
|
|
|
55 |
|
|
|
57 |
|
|
|
60 |
|
|
|
60 |
|
|
|
51 |
|
|
|
41 |
|
Canada |
|
63 |
|
|
|
37 |
|
|
|
59 |
|
|
|
66 |
|
|
|
69 |
|
|
|
42 |
|
|
|
57 |
|
International |
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
5 |
|
|
|
5 |
|
|
|
6 |
|
Total |
|
120 |
|
|
|
98 |
|
|
|
122 |
|
|
|
132 |
|
|
|
134 |
|
|
|
98 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
According to industry sources, as at October 25,
2023, the U.S. active land drilling rig count has decreased 21%
from the same point last year while the Canadian active land
drilling rig count has decreased 6%. To date in 2023, approximately
79% of the U.S. industry’s active rigs and 59% of the Canadian
industry’s active rigs were drilling for oil targets, compared with
79% for the U.S. and 63% for Canada at the same time last year.
Capital Spending and Free Cash Flow
Allocation
We remain committed to disciplined cash flow
management, capital spending and returning capital to shareholders.
In response to increased customer contracted rig upgrades and to
facilitate the strategic purchase of certain long-lead items,
capital spending in 2023 is expected to increase by $20 million to
$215 million. By spend category, we expect to incur $155 million
for sustaining, infrastructure and intangibles and $60 million for
expansion and upgrades. We expect that the $215 million will be
split as follows: $201 million in the Contract Drilling Services
segment, $11 million in the Completion and Production Services
segment, and $3 million in the Corporate segment. As at September
30, 2023, Precision had capital commitments of approximately $229
million with payments expected through 2026.
SEGMENTED FINANCIAL RESULTS
Precision’s operations are reported in two
segments: Contract Drilling Services, which includes our drilling
rig, oilfield supply and manufacturing divisions; and Completion
and Production Services, which includes our service rig, rental and
camp and catering divisions.
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
(Stated
in thousands of Canadian dollars) |
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Drilling Services |
|
390,728 |
|
|
|
374,465 |
|
|
|
4.3 |
|
|
|
1,257,762 |
|
|
|
982,909 |
|
|
|
28.0 |
|
Completion and Production Services |
|
57,573 |
|
|
|
56,642 |
|
|
|
1.6 |
|
|
|
178,257 |
|
|
|
127,921 |
|
|
|
39.3 |
|
Inter-segment eliminations |
|
(1,547 |
) |
|
|
(1,772 |
) |
|
|
(12.7 |
) |
|
|
(5,036 |
) |
|
|
(4,140 |
) |
|
|
21.6 |
|
|
|
446,754 |
|
|
|
429,335 |
|
|
|
4.1 |
|
|
|
1,430,983 |
|
|
|
1,106,690 |
|
|
|
29.3 |
|
Adjusted EBITDA:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract Drilling Services |
|
131,701 |
|
|
|
118,599 |
|
|
|
11.0 |
|
|
|
468,302 |
|
|
|
260,202 |
|
|
|
80.0 |
|
Completion and Production Services |
|
14,118 |
|
|
|
14,788 |
|
|
|
(4.5 |
) |
|
|
39,031 |
|
|
|
26,166 |
|
|
|
49.2 |
|
Corporate and Other |
|
(31,244 |
) |
|
|
(13,826 |
) |
|
|
126.0 |
|
|
|
(47,446 |
) |
|
|
(65,853 |
) |
|
|
(28.0 |
) |
|
|
114,575 |
|
|
|
119,561 |
|
|
|
(4.2 |
) |
|
|
459,887 |
|
|
|
220,515 |
|
|
|
108.6 |
|
(1) See
“FINANCIAL MEASURES AND RATIOS.”
SEGMENT REVIEW OF CONTRACT DRILLING
SERVICES
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
(Stated
in thousands of Canadian dollars, except where noted) |
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
Revenue |
|
390,728 |
|
|
|
374,465 |
|
|
|
4.3 |
|
|
|
1,257,762 |
|
|
|
982,909 |
|
|
|
28.0 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
247,937 |
|
|
|
246,442 |
|
|
|
0.6 |
|
|
|
759,750 |
|
|
|
692,169 |
|
|
|
9.8 |
|
General and administrative |
|
11,090 |
|
|
|
9,424 |
|
|
|
17.7 |
|
|
|
29,710 |
|
|
|
30,538 |
|
|
|
(2.7 |
) |
Adjusted EBITDA(1) |
|
131,701 |
|
|
|
118,599 |
|
|
|
11.0 |
|
|
|
468,302 |
|
|
|
260,202 |
|
|
|
80.0 |
|
Adjusted EBITDA as a percentage of revenue(1) |
|
33.7 |
% |
|
|
31.7 |
% |
|
|
|
|
|
37.2 |
% |
|
|
26.5 |
% |
|
|
|
(1) See
“FINANCIAL MEASURES AND RATIOS.”
United
States onshore drilling statistics:(1) |
2023 |
|
|
2022 |
|
|
|
Precision |
|
|
Industry(2) |
|
|
Precision |
|
|
Industry(2) |
|
|
Average number of active land
rigs for quarters ended: |
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
60 |
|
|
|
744 |
|
|
|
51 |
|
|
|
603 |
|
|
June 30 |
|
51 |
|
|
|
700 |
|
|
|
55 |
|
|
|
687 |
|
|
September 30 |
|
41 |
|
|
|
631 |
|
|
|
57 |
|
|
|
746 |
|
|
Year to date average |
|
51 |
|
|
|
692 |
|
|
|
54 |
|
|
|
679 |
|
|
(1) United States lower 48
operations only.(2) Baker Hughes
rig counts.
Canadian onshore drilling statistics:(1) |
2023 |
|
|
2022 |
|
|
|
Precision |
|
|
Industry(2) |
|
|
Precision |
|
|
Industry(2) |
|
|
Average number of active land
rigs for quarters ended: |
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
69 |
|
|
|
221 |
|
|
|
63 |
|
|
|
205 |
|
|
June 30 |
|
42 |
|
|
|
117 |
|
|
|
37 |
|
|
|
113 |
|
|
September 30 |
|
57 |
|
|
|
188 |
|
|
|
59 |
|
|
|
199 |
|
|
Year to date average |
|
56 |
|
|
|
175 |
|
|
|
53 |
|
|
|
172 |
|
|
(1) Canadian operations
only.(2) Baker Hughes rig
counts.
SEGMENT REVIEW OF COMPLETION AND
PRODUCTION SERVICES
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
(Stated
in thousands of Canadian dollars, except where noted) |
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
Revenue |
|
57,573 |
|
|
|
56,642 |
|
|
|
1.6 |
|
|
|
178,257 |
|
|
|
127,921 |
|
|
|
39.3 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
41,612 |
|
|
|
40,198 |
|
|
|
3.5 |
|
|
|
133,325 |
|
|
|
96,365 |
|
|
|
38.4 |
|
General and administrative |
|
1,843 |
|
|
|
1,656 |
|
|
|
11.3 |
|
|
|
5,901 |
|
|
|
5,390 |
|
|
|
9.5 |
|
Adjusted EBITDA(1) |
|
14,118 |
|
|
|
14,788 |
|
|
|
(4.5 |
) |
|
|
39,031 |
|
|
|
26,166 |
|
|
|
49.2 |
|
Adjusted EBITDA as a percentage of revenue(1) |
|
24.5 |
% |
|
|
26.1 |
% |
|
|
|
|
|
21.9 |
% |
|
|
20.5 |
% |
|
|
|
Well servicing
statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of service rigs (end of period) |
|
121 |
|
|
|
135 |
|
|
|
(10.4 |
) |
|
|
121 |
|
|
|
135 |
|
|
|
(10.4 |
) |
Service rig operating hours |
|
46,894 |
|
|
|
52,340 |
|
|
|
(10.4 |
) |
|
|
144,944 |
|
|
|
120,994 |
|
|
|
19.8 |
|
Service rig operating hour utilization |
|
42 |
% |
|
|
47 |
% |
|
|
|
|
|
44 |
% |
|
|
43 |
% |
|
|
|
(1) See
“FINANCIAL MEASURES AND RATIOS.”
SEGMENT REVIEW OF CORPORATE AND
OTHER
Our Corporate and Other segment provides support
functions to our operating segments. The Corporate and Other
segment had negative Adjusted EBITDA of $31 million as compared
with $14 million in 2022. Our higher current quarter Adjusted
EBITDA was impacted by higher share-based compensation charges and
higher translated U.S. dollar-denominated costs.
OTHER ITEMS
Share-based Incentive Compensation
Plans
We have several cash and equity-settled
share-based incentive plans for non-management directors, officers,
and other eligible employees. Our accounting policies for each
share-based incentive plan can be found in our 2022 Annual
Report.
A summary of expense amounts under these plans
during the reporting periods are as follows:
|
For the three months endedSeptember 30, |
|
|
For the nine months endedSeptember 30, |
|
(Stated in thousands of Canadian dollars) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash settled share-based incentive plans |
|
30,105 |
|
|
|
5,543 |
|
|
|
20,091 |
|
|
|
57,802 |
|
Equity settled share-based
incentive plans |
|
701 |
|
|
|
— |
|
|
|
1,834 |
|
|
|
427 |
|
Total share-based incentive compensation plan expense |
|
30,806 |
|
|
|
5,543 |
|
|
|
21,925 |
|
|
|
58,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocated: |
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
7,692 |
|
|
|
1,922 |
|
|
|
6,732 |
|
|
|
14,694 |
|
General and Administrative |
|
23,114 |
|
|
|
3,621 |
|
|
|
15,193 |
|
|
|
43,535 |
|
|
|
30,806 |
|
|
|
5,543 |
|
|
|
21,925 |
|
|
|
58,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash settled share-based compensation expense
for the quarter was $30 million as compared with $6 million in
2022. The higher expense in 2023 was primarily due to our improved
share price performance as compared with 2022.
During the first quarter of 2023, we issued
Executive Restricted Share Units (Executive RSUs)
to certain senior executives. Accordingly, our equity-settled
share-based compensation expense for the quarter was $1 million as
compared with nil in 2022.
As at September 30, 2023, the majority of our
share-based compensation plans were classified as cash-settled and
will be impacted by changes in our share price. Although accounted
for as cash-settled, Precision retains the ability to settle
certain vested units in common shares at its discretion.
Finance Charges
Net finance charges were $20 million, a decrease
of $3 million compared with 2022 and the result of lower
outstanding long-term debt. Interest charges on our U.S.
dollar-denominated long-term debt were US$13 million ($17 million)
as compared with US$16 million ($20 million) in 2022.
Income Tax
Income tax expense for the quarter was $8
million as compared with $6 million in 2022. During the third
quarter, we continued to not recognize deferred tax assets on
certain Canadian and international operating losses.
Normal Course Issuer Bid
During the quarter, the Toronto Stock Exchange
(TSX) approved the renewal of our Normal Course
Issuer Bid. Pursuant to the NCIB, we are authorized to repurchase
and cancel up to a maximum of 1,326,321 common shares. Purchases
under the renewed NCIB may commence on September 19, 2023 and will
terminate no later than September 18, 2024, or such earlier time as
we complete our maximum purchases pursuant to the NCIB or provide
notice of termination.
Cathedral Energy Services
Ltd.
During the third quarter of 2023, we exercised 2
million warrants for $1 million in exchange for 2 million common
shares of Cathedral Energy Services Ltd.
(Cathedral). In addition, we divested 11 million
common shares of Cathedral for net proceeds of $10 million.
LIQUIDITY AND CAPITAL
RESOURCES
Liquidity
Amount |
|
Availability |
|
Used for |
|
Maturity |
Senior Credit Facility (secured) |
|
|
|
|
|
|
US$447 million (extendible, revolving term credit facility with
US$353 million accordion feature) |
|
Nil drawn and US$55 million inoutstanding letters of credit |
|
General corporate purposes |
|
June 18, 2025 |
Real estate credit facilities (secured) |
|
|
|
|
|
|
US$9 million |
|
Fully drawn |
|
General corporate purposes |
|
November 19, 2025 |
$17 million |
|
Fully drawn |
|
General corporate purposes |
|
March 16, 2026 |
Operating facilities (secured) |
|
|
|
|
|
|
$40 million |
|
Undrawn, except $20 million inoutstanding letters of credit |
|
Letters of credit and general corporate purposes |
|
|
US$15 million |
|
Undrawn |
|
Short-term working capital requirements |
|
|
Demand letter of credit facility (secured) |
|
|
|
|
|
|
US$40 million |
|
Undrawn, except US$21 million inoutstanding letters of credit |
|
Letters of credit |
|
|
Unsecured senior notes (unsecured) |
|
|
|
|
|
|
US$299 million – 7.125% |
|
Fully drawn |
|
Debt redemption and repurchases |
|
January 15, 2026 |
US$400 million – 6.875% |
|
Fully drawn |
|
Debt redemption and repurchases |
|
January 15, 2029 |
|
|
|
|
|
|
|
As at September 30, 2023, we had $978 million
outstanding under our Senior Credit Facility, Real Estate Credit
Facilities and unsecured senior notes as compared with $1,103
million at December 31, 2022. The current blended cash interest
cost of our debt is approximately 7.0%.
During the quarter, we repurchased and cancelled
US$18 million principal amount of our 2026 unsecured senior
notes.
Covenants
As at September 30, 2023, we were in compliance
with the covenants of our Senior Credit Facility and Real Estate
Credit Facilities.
|
Covenant |
|
At September 30,2023 |
|
|
Senior Credit
Facility |
|
|
|
|
|
Consolidated senior debt to consolidated covenant EBITDA(1) |
< 2.50 |
|
|
0.05 |
|
|
Consolidated covenant EBITDA to consolidated interest expense |
> 2.50 |
|
|
6.74 |
|
|
Real Estate Credit
Facilities |
|
|
|
|
|
Consolidated covenant EBITDA to consolidated interest expense |
> 2.50 |
|
|
6.74 |
|
|
(1) For purposes of
calculating the leverage ratio consolidated senior debt only
includes secured indebtedness.
Average shares outstanding
The following tables reconcile net earnings
(loss) and the weighted average shares outstanding used in
computing basic and diluted net earnings (loss) per share:
|
For the three months endedSeptember 30, |
|
|
For the nine months endedSeptember 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings (loss) – basic |
|
19,792 |
|
|
|
30,679 |
|
|
|
142,522 |
|
|
|
(37,776 |
) |
Effect of share options and other equity compensation
plans |
|
— |
|
|
|
(94 |
) |
|
|
3,679 |
|
|
|
— |
|
Net
earnings (loss) – diluted |
|
19,792 |
|
|
|
30,585 |
|
|
|
146,201 |
|
|
|
(37,776 |
) |
|
For the three months endedSeptember 30, |
|
|
For the nine months endedSeptember 30, |
|
(Stated in thousands) |
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Weighted average shares outstanding – basic |
|
13,607 |
|
|
|
13,580 |
|
|
|
13,643 |
|
|
|
13,549 |
|
Effect of share options and other equity compensation
plans |
|
3 |
|
|
|
1,464 |
|
|
|
1,215 |
|
|
|
— |
|
Weighted average shares outstanding – diluted |
|
13,610 |
|
|
|
15,044 |
|
|
|
14,858 |
|
|
|
13,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUARTERLY FINANCIAL SUMMARY
(Stated in thousands of Canadian dollars, except per share
amounts) |
|
|
2022 |
|
|
2023 |
|
Quarters ended |
|
December 31 |
|
|
March 31 |
|
|
June 30 |
|
|
September 30 |
|
Revenue |
|
|
510,504 |
|
|
|
558,607 |
|
|
|
425,622 |
|
|
|
446,754 |
|
Adjusted EBITDA(1) |
|
|
91,090 |
|
|
|
203,219 |
|
|
|
142,093 |
|
|
|
114,575 |
|
Net earnings |
|
|
3,483 |
|
|
|
95,830 |
|
|
|
26,900 |
|
|
|
19,792 |
|
Net earnings per basic
share |
|
|
0.27 |
|
|
|
7.02 |
|
|
|
1.97 |
|
|
|
1.45 |
|
Net earnings per diluted
share |
|
|
0.27 |
|
|
|
5.57 |
|
|
|
1.63 |
|
|
|
1.45 |
|
Funds provided by
operations(1) |
|
|
111,339 |
|
|
|
159,653 |
|
|
|
136,959 |
|
|
|
91,608 |
|
Cash
provided by operations |
|
|
159,082 |
|
|
|
28,356 |
|
|
|
213,460 |
|
|
|
88,500 |
|
(Stated in thousands of Canadian dollars, except per share
amounts) |
|
|
2021 |
|
|
2022 |
|
Quarters ended |
|
December 31 |
|
|
March 31 |
|
|
June 30 |
|
|
September 30 |
|
Revenue |
|
|
295,202 |
|
|
|
351,339 |
|
|
|
326,016 |
|
|
|
429,335 |
|
Adjusted EBITDA(1) |
|
|
63,881 |
|
|
|
36,855 |
|
|
|
64,099 |
|
|
|
119,561 |
|
Net earnings (loss) |
|
|
(27,336 |
) |
|
|
(43,844 |
) |
|
|
(24,611 |
) |
|
|
30,679 |
|
Net earnings (loss) per basic
share |
|
|
(2.05 |
) |
|
|
(3.25 |
) |
|
|
(1.81 |
) |
|
|
2.26 |
|
Net earnings (loss) per
diluted share |
|
|
(2.05 |
) |
|
|
(3.25 |
) |
|
|
(1.81 |
) |
|
|
2.03 |
|
Funds provided by
operations(1) |
|
|
62,681 |
|
|
|
29,955 |
|
|
|
60,373 |
|
|
|
81,327 |
|
Cash
provided by (used in) operations |
|
|
59,713 |
|
|
|
(65,294 |
) |
|
|
135,174 |
|
|
|
8,142 |
|
(1) See
“FINANCIAL MEASURES AND RATIOS.”
FINANCIAL MEASURES AND
RATIOS
Non-GAAP Financial Measures |
|
We reference certain additional Non-Generally Accepted Accounting
Principles (Non-GAAP) measures that are not
defined terms under IFRS to assess performance because we believe
they provide useful supplemental information to investors. |
|
Adjusted EBITDA |
We believe Adjusted EBITDA (earnings before income taxes, loss
(gain) on investments and other assets, gain on repurchase of
unsecured senior notes, finance charges, foreign exchange, gain on
asset disposals and depreciation and amortization), as reported in
our Condensed Interim Consolidated Statements of Net Earnings
(Loss) and our reportable operating segment disclosures, is a
useful measure because it gives an indication of the results from
our principal business activities prior to consideration of how our
activities are financed and the impact of foreign exchange,
taxation and depreciation and amortization charges. The most
directly comparable financial measure is net earnings (loss). |
|
For the three months endedSeptember 30, |
|
|
For the nine months endedSeptember 30, |
|
(Stated in thousands of Canadian dollars) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Adjusted EBITDA by
segment: |
|
|
|
|
|
|
|
|
|
|
|
Contract Drilling Services |
|
131,701 |
|
|
|
118,599 |
|
|
|
468,302 |
|
|
|
260,202 |
|
Completion and Production Services |
|
14,118 |
|
|
|
14,788 |
|
|
|
39,031 |
|
|
|
26,166 |
|
Corporate and Other |
|
(31,244 |
) |
|
|
(13,826 |
) |
|
|
(47,446 |
) |
|
|
(65,853 |
) |
Adjusted
EBITDA |
|
114,575 |
|
|
|
119,561 |
|
|
|
459,887 |
|
|
|
220,515 |
|
Depreciation and
amortization |
|
73,192 |
|
|
|
69,448 |
|
|
|
218,823 |
|
|
|
207,662 |
|
Gain on asset disposals |
|
(2,438 |
) |
|
|
(8,238 |
) |
|
|
(15,586 |
) |
|
|
(22,152 |
) |
Foreign exchange |
|
363 |
|
|
|
1,344 |
|
|
|
(894 |
) |
|
|
1,362 |
|
Finance charges |
|
19,618 |
|
|
|
22,521 |
|
|
|
63,946 |
|
|
|
64,294 |
|
Gain on repurchase of
unsecured notes |
|
(37 |
) |
|
|
— |
|
|
|
(137 |
) |
|
|
— |
|
Loss (gain) on investments and
other assets |
|
(3,813 |
) |
|
|
(2,515 |
) |
|
|
6,075 |
|
|
|
(3,738 |
) |
Incomes
taxes |
|
7,898 |
|
|
|
6,322 |
|
|
|
45,138 |
|
|
|
10,863 |
|
Net earnings (loss) |
|
19,792 |
|
|
|
30,679 |
|
|
|
142,522 |
|
|
|
(37,776 |
) |
Funds Provided by(Used in) Operations |
We believe funds provided by (used in) operations, as reported in
our Condensed Interim Consolidated Statements of Cash Flows, is a
useful measure because it provides an indication of the funds our
principal business activities generate prior to consideration of
working capital changes, which is primarily made up of highly
liquid balances. The most directly comparable financial measure is
cash provided by (used in) operations. |
|
|
Net Capital
Spending |
We believe net capital spending is a useful measure as it provides
an indication of our primary investment activities. The most
directly comparable financial measure is cash provided by (used in)
investing activities. Net capital spending is calculated as
follows: |
|
|
For the three months endedSeptember 30, |
|
|
For the nine months endedSeptember 30, |
|
(Stated in thousands of Canadian dollars) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Capital spending by spend
category |
|
|
|
|
|
|
|
|
|
|
|
|
Expansion and upgrade |
|
|
13,479 |
|
|
|
25,461 |
|
|
|
39,439 |
|
|
|
50,606 |
|
Maintenance, infrastructure and intangibles |
|
|
38,914 |
|
|
|
25,642 |
|
|
|
108,463 |
|
|
|
76,335 |
|
|
|
|
52,393 |
|
|
|
51,103 |
|
|
|
147,902 |
|
|
|
126,941 |
|
Proceeds on sale of property, plant and equipment |
|
|
(6,698 |
) |
|
|
(22,337 |
) |
|
|
(20,724 |
) |
|
|
(32,033 |
) |
Net capital spending |
|
|
45,695 |
|
|
|
28,766 |
|
|
|
127,178 |
|
|
|
94,908 |
|
Business acquisitions |
|
|
— |
|
|
|
10,200 |
|
|
|
28,000 |
|
|
|
10,200 |
|
Proceeds from sale of
investments and other assets |
|
|
(10,013 |
) |
|
|
— |
|
|
|
(10,013 |
) |
|
|
— |
|
Purchase of investments and
other assets |
|
|
3,211 |
|
|
|
73 |
|
|
|
5,282 |
|
|
|
609 |
|
Receipt of finance lease
payments |
|
|
(64 |
) |
|
|
— |
|
|
|
(64 |
) |
|
|
— |
|
Changes
in non-cash working capital balances |
|
|
(4,551 |
) |
|
|
(7,328 |
) |
|
|
6,774 |
|
|
|
(6,881 |
) |
Cash
used in investing activities |
|
|
34,278 |
|
|
|
31,711 |
|
|
|
157,157 |
|
|
|
98,836 |
|
Working Capital |
We define working capital as current assets less current
liabilities, as reported in our Condensed Interim Consolidated
Statements of Financial Position. Working capital is calculated as
follows: |
|
September 30, |
|
|
December 31, |
|
(Stated in thousands of Canadian dollars) |
|
2023 |
|
|
|
2022 |
|
Current assets |
|
477,396 |
|
|
|
470,670 |
|
Current
liabilities |
|
299,656 |
|
|
|
410,029 |
|
Working
capital |
|
177,740 |
|
|
|
60,641 |
|
Non-GAAP Ratios |
|
We reference certain additional Non-GAAP ratios that are not
defined terms under IFRS to assess performance because we believe
they provide useful supplemental information to investors. |
|
Adjusted EBITDA %of Revenue |
We believe Adjusted EBITDA as a percentage of consolidated revenue,
as reported in our Condensed Interim Consolidated Statements of Net
Earnings (Loss), provides an indication of our profitability from
our principal business activities prior to consideration of how our
activities are financed and the impact of foreign exchange,
taxation and depreciation and amortization charges. |
|
|
Long-term debt tolong-term debt plusequity |
We believe that long-term debt (as reported in our Condensed
Interim Consolidated Statements of Financial Position) to long-term
debt plus equity (total shareholders’ equity as reported in our
Condensed Interim Consolidated Statements of Financial Position)
provides an indication of our debt leverage. |
|
|
Net Debt toAdjusted
EBITDA |
We believe that the Net Debt (long-term debt less cash, as reported
in our Condensed Interim Consolidated Statements of Financial
Position) to Adjusted EBITDA ratio provides an indication of the
number of years it would take for us to repay our debt
obligations. |
|
|
Supplementary Financial Measures |
|
We reference certain supplementary financial measures that are not
defined terms under IFRS to assess performance because we believe
they provide useful supplemental information to investors. |
|
Capital Spending bySpend Category |
We provide additional disclosure to better depict the nature of our
capital spending. Our capital spending is categorized as expansion
and upgrade, maintenance and infrastructure, or intangibles. |
|
|
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements contained in this release,
including statements that contain words such as “could”, “should”,
“can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”,
“believe”, “will”, “may", “continue”, “project”, “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:
- our strategic priorities for 2023;
- our capital expenditures, free cash flow allocation and debt
reduction plan for 2023;
- anticipated activity levels, demand for our drilling rigs, day
rates and daily operating margins in 2023;
- the average number of term contracts in place for 2023;
- customer adoption of Alpha™ technologies and
EverGreen™ suite of environmental solutions;
- timing and amount of accretive cash flow from acquired drilling
and well servicing assets;
- potential commercial opportunities and rig contract renewals;
and
- our future debt reduction plans.
These forward-looking information and statements
are based on certain assumptions and analysis made by Precision in
light of our experience and our perception of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. These include,
among other things:
- our ability to react to customer spending plans as a result of
changes in oil and natural gas prices;
- the status of current negotiations with our customers and
vendors;
- customer focus on safety performance;
- existing term contracts are neither renewed nor terminated
prematurely;
- our ability to deliver rigs to customers on a timely
basis;
- the impact of an increase/decrease in capital spending;
and
- the general stability of the economic and political
environments in the jurisdictions where we operate.
Undue reliance should not be placed on
forward-looking information and statements. Whether actual results,
performance or achievements will conform to our expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from our expectations. Such risks and uncertainties include, but
are not limited to:
- volatility 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;
- our customers’ inability to obtain adequate credit or financing
to support their drilling and production activity;
- changes in drilling and well servicing technology, which could
reduce demand for certain rigs or put us at a competitive
advantage;
- shortages, delays and interruptions in the delivery of
equipment supplies and other key inputs;
- liquidity of the capital markets to fund customer drilling
programs;
- availability of cash flow, debt and equity sources to fund our
capital and operating requirements, as needed;
- the impact of weather and seasonal conditions on operations and
facilities;
- competitive operating risks inherent in contract drilling, well
servicing and ancillary oilfield services;
- ability to improve our rig technology to improve drilling
efficiency;
- general economic, market or business conditions;
- the availability of qualified personnel and management;
- a decline in our safety performance which could result in lower
demand for our services;
- changes in laws or regulations, including changes in
environmental laws and regulations such as increased regulation of
hydraulic fracturing or restrictions on the burning of fossil fuels
and greenhouse gas emissions, which could have an adverse impact on
the demand for oil and natural gas;
- terrorism, social, civil and political unrest in the foreign
jurisdictions where we operate;
- fluctuations in foreign exchange, interest rates and tax rates;
and
- other unforeseen conditions which could impact the use of
services supplied by Precision and Precision’s ability to respond
to such conditions.
Readers are cautioned that the forgoing list of
risk factors is not exhaustive. Additional information on these and
other factors that could affect our business, operations or
financial results are included in reports on file with applicable
securities regulatory authorities, including but not limited to
Precision’s Annual Information Form for the year ended December 31,
2022, which may be accessed on Precision’s SEDAR profile at
www.sedar.com or under Precision’s EDGAR profile at www.sec.gov.
The forward-looking information and statements contained in this
release are made as of the date hereof and Precision undertakes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, except as required by law.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION (UNAUDITED)
(Stated in thousands of Canadian dollars) |
|
September 30, 2023 |
|
|
December 31, 2022 |
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash |
|
$ |
49,065 |
|
|
$ |
21,587 |
|
Accounts receivable |
|
|
393,286 |
|
|
|
413,925 |
|
Inventory |
|
|
35,045 |
|
|
|
35,158 |
|
Total
current assets |
|
|
477,396 |
|
|
|
470,670 |
|
Non-current assets: |
|
|
|
|
|
|
Income tax recoverable |
|
|
699 |
|
|
|
1,602 |
|
Deferred tax assets |
|
|
454 |
|
|
|
455 |
|
Property, plant and equipment |
|
|
2,238,680 |
|
|
|
2,303,338 |
|
Intangibles |
|
|
18,047 |
|
|
|
19,575 |
|
Right-of-use assets |
|
|
57,168 |
|
|
|
60,032 |
|
Finance lease receivables |
|
|
5,112 |
|
|
|
— |
|
Investments and other assets |
|
|
10,645 |
|
|
|
20,451 |
|
Total non-current assets |
|
|
2,330,805 |
|
|
|
2,405,453 |
|
Total assets |
|
$ |
2,808,201 |
|
|
$ |
2,876,123 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
280,519 |
|
|
$ |
392,053 |
|
Income taxes payable |
|
|
3,197 |
|
|
|
2,991 |
|
Current portion of lease obligations |
|
|
13,650 |
|
|
|
12,698 |
|
Current portion of long-term debt |
|
|
2,290 |
|
|
|
2,287 |
|
Total
current liabilities |
|
|
299,656 |
|
|
|
410,029 |
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
Share-based compensation |
|
|
28,360 |
|
|
|
60,133 |
|
Provisions and other |
|
|
7,331 |
|
|
|
7,538 |
|
Lease obligations |
|
|
55,143 |
|
|
|
52,978 |
|
Long-term debt |
|
|
963,827 |
|
|
|
1,085,970 |
|
Deferred tax liabilities |
|
|
70,149 |
|
|
|
28,946 |
|
Total
non-current liabilities |
|
|
1,124,810 |
|
|
|
1,235,565 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Shareholders’ capital |
|
|
2,306,545 |
|
|
|
2,299,533 |
|
Contributed surplus |
|
|
74,389 |
|
|
|
72,555 |
|
Deficit |
|
|
(1,158,751 |
) |
|
|
(1,301,273 |
) |
Accumulated other comprehensive income |
|
|
161,552 |
|
|
|
159,714 |
|
Total shareholders’ equity |
|
|
1,383,735 |
|
|
|
1,230,529 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,808,201 |
|
|
$ |
2,876,123 |
|
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Stated
in thousands of Canadian dollars, except per share amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
446,754 |
|
|
$ |
429,335 |
|
|
$ |
1,430,983 |
|
|
$ |
1,106,690 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
|
288,002 |
|
|
|
284,868 |
|
|
|
888,039 |
|
|
|
784,394 |
|
General and administrative |
|
|
44,177 |
|
|
|
24,906 |
|
|
|
83,057 |
|
|
|
101,781 |
|
Earnings
before income taxes, loss (gain) on investments and
other assets, gain on repurchase of unsecured senior
notes, finance charges, foreign exchange, gain on
asset disposals, and depreciation and
amortization |
|
|
114,575 |
|
|
|
119,561 |
|
|
|
459,887 |
|
|
|
220,515 |
|
Depreciation and amortization |
|
|
73,192 |
|
|
|
69,448 |
|
|
|
218,823 |
|
|
|
207,662 |
|
Gain on
asset disposals |
|
|
(2,438 |
) |
|
|
(8,238 |
) |
|
|
(15,586 |
) |
|
|
(22,152 |
) |
Foreign
exchange |
|
|
363 |
|
|
|
1,344 |
|
|
|
(894 |
) |
|
|
1,362 |
|
Finance
charges |
|
|
19,618 |
|
|
|
22,521 |
|
|
|
63,946 |
|
|
|
64,294 |
|
Gain on
repurchase of unsecured senior notes |
|
|
(37 |
) |
|
|
— |
|
|
|
(137 |
) |
|
|
— |
|
Loss (gain) on investments and other assets |
|
|
(3,813 |
) |
|
|
(2,515 |
) |
|
|
6,075 |
|
|
|
(3,738 |
) |
Earnings
(loss) before income taxes |
|
|
27,690 |
|
|
|
37,001 |
|
|
|
187,660 |
|
|
|
(26,913 |
) |
Income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
2,047 |
|
|
|
958 |
|
|
|
4,008 |
|
|
|
2,563 |
|
Deferred |
|
|
5,851 |
|
|
|
5,364 |
|
|
|
41,130 |
|
|
|
8,300 |
|
|
|
|
7,898 |
|
|
|
6,322 |
|
|
|
45,138 |
|
|
|
10,863 |
|
Net earnings (loss) |
|
$ |
19,792 |
|
|
$ |
30,679 |
|
|
$ |
142,522 |
|
|
$ |
(37,776 |
) |
Net
earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.45 |
|
|
$ |
2.26 |
|
|
$ |
10.45 |
|
|
$ |
(2.79 |
) |
Diluted |
|
$ |
1.45 |
|
|
$ |
2.03 |
|
|
$ |
9.84 |
|
|
$ |
(2.79 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Stated
in thousands of Canadian dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings (loss) |
|
$ |
19,792 |
|
|
$ |
30,679 |
|
|
$ |
142,522 |
|
|
$ |
(37,776 |
) |
Unrealized gain on translation of assets and
liabilities of operations denominated in foreign
currency |
|
|
39,180 |
|
|
|
111,811 |
|
|
|
3,322 |
|
|
|
139,478 |
|
Foreign exchange loss
on net investment hedge
with U.S. denominated debt |
|
|
(24,616 |
) |
|
|
(84,060 |
) |
|
|
(1,484 |
) |
|
|
(105,123 |
) |
Comprehensive income (loss) |
|
$ |
34,356 |
|
|
$ |
58,430 |
|
|
$ |
144,360 |
|
|
$ |
(3,421 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Stated
in thousands of Canadian dollars) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash
provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
19,792 |
|
|
$ |
30,679 |
|
|
$ |
142,522 |
|
|
$ |
(37,776 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term compensation plans |
|
|
11,577 |
|
|
|
411 |
|
|
|
9,200 |
|
|
|
34,847 |
|
Depreciation and amortization |
|
|
73,192 |
|
|
|
69,448 |
|
|
|
218,823 |
|
|
|
207,662 |
|
Gain on asset disposals |
|
|
(2,438 |
) |
|
|
(8,238 |
) |
|
|
(15,586 |
) |
|
|
(22,152 |
) |
Foreign exchange |
|
|
1,275 |
|
|
|
773 |
|
|
|
(13 |
) |
|
|
924 |
|
Finance charges |
|
|
19,618 |
|
|
|
22,521 |
|
|
|
63,946 |
|
|
|
64,294 |
|
Income taxes |
|
|
7,898 |
|
|
|
6,322 |
|
|
|
45,138 |
|
|
|
10,863 |
|
Other |
|
|
— |
|
|
|
(2 |
) |
|
|
(220 |
) |
|
|
273 |
|
Loss (gain) on investments and other assets |
|
|
(3,813 |
) |
|
|
(2,515 |
) |
|
|
6,075 |
|
|
|
(3,738 |
) |
Gain on repurchase of unsecured senior notes |
|
|
(37 |
) |
|
|
— |
|
|
|
(137 |
) |
|
|
— |
|
Income taxes paid |
|
|
(187 |
) |
|
|
(220 |
) |
|
|
(2,395 |
) |
|
|
(3,023 |
) |
Income taxes recovered |
|
|
4 |
|
|
|
10 |
|
|
|
7 |
|
|
|
10 |
|
Interest paid |
|
|
(35,500 |
) |
|
|
(38,005 |
) |
|
|
(79,702 |
) |
|
|
(80,706 |
) |
Interest received |
|
|
227 |
|
|
|
143 |
|
|
|
562 |
|
|
|
177 |
|
Funds
provided by operations |
|
|
91,608 |
|
|
|
81,327 |
|
|
|
388,220 |
|
|
|
171,655 |
|
Changes in non-cash working capital balances |
|
|
(3,108 |
) |
|
|
(73,185 |
) |
|
|
(57,904 |
) |
|
|
(93,633 |
) |
|
|
|
88,500 |
|
|
|
8,142 |
|
|
|
330,316 |
|
|
|
78,022 |
|
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of property, plant and equipment |
|
|
(51,546 |
) |
|
|
(51,103 |
) |
|
|
(146,378 |
) |
|
|
(126,941 |
) |
Purchase
of intangibles |
|
|
(847 |
) |
|
|
— |
|
|
|
(1,524 |
) |
|
|
— |
|
Proceeds
on sale of property, plant and equipment |
|
|
6,698 |
|
|
|
22,337 |
|
|
|
20,724 |
|
|
|
32,033 |
|
Proceeds
from sale of investments and other assets |
|
|
10,013 |
|
|
|
— |
|
|
|
10,013 |
|
|
|
— |
|
Business
acquisitions |
|
|
— |
|
|
|
(10,200 |
) |
|
|
(28,000 |
) |
|
|
(10,200 |
) |
Purchase
of investments and other assets |
|
|
(3,211 |
) |
|
|
(73 |
) |
|
|
(5,282 |
) |
|
|
(609 |
) |
Receipt
of finance lease payments |
|
|
64 |
|
|
|
— |
|
|
|
64 |
|
|
|
— |
|
Changes in non-cash working capital balances |
|
|
4,551 |
|
|
|
7,328 |
|
|
|
(6,774 |
) |
|
|
6,881 |
|
|
|
|
(34,278 |
) |
|
|
(31,711 |
) |
|
|
(157,157 |
) |
|
|
(98,836 |
) |
Financing: |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of long-term debt |
|
|
23,600 |
|
|
|
50,360 |
|
|
|
162,649 |
|
|
|
144,889 |
|
Repayments of long-term debt |
|
|
(49,517 |
) |
|
|
(34,475 |
) |
|
|
(288,538 |
) |
|
|
(118,586 |
) |
Repurchase of share capital |
|
|
— |
|
|
|
(5,010 |
) |
|
|
(12,951 |
) |
|
|
(10,010 |
) |
Issuance
of common shares from the exercise of options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,162 |
|
Lease
payments |
|
|
(2,410 |
) |
|
|
(1,777 |
) |
|
|
(6,413 |
) |
|
|
(5,186 |
) |
|
|
|
(28,327 |
) |
|
|
9,098 |
|
|
|
(145,253 |
) |
|
|
17,269 |
|
Effect of exchange rate changes on cash |
|
|
251 |
|
|
|
2,878 |
|
|
|
(428 |
) |
|
|
3,005 |
|
Increase
(decrease) in cash |
|
|
26,146 |
|
|
|
(11,593 |
) |
|
|
27,478 |
|
|
|
(540 |
) |
Cash, beginning of period |
|
|
22,919 |
|
|
|
51,641 |
|
|
|
21,587 |
|
|
|
40,588 |
|
Cash, end of period |
|
$ |
49,065 |
|
|
$ |
40,048 |
|
|
$ |
49,065 |
|
|
$ |
40,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(Stated
in thousands of Canadian dollars) |
|
Shareholders’ Capital |
|
|
Contributed Surplus |
|
|
Accumulated Other Comprehensive Income |
|
|
Deficit |
|
|
Total Equity |
|
Balance at January 1, 2023 |
|
$ |
2,299,533 |
|
|
$ |
72,555 |
|
|
$ |
159,714 |
|
|
$ |
(1,301,273 |
) |
|
$ |
1,230,529 |
|
Net
earnings for the period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
142,522 |
|
|
|
142,522 |
|
Other
comprehensive income for the period |
|
|
— |
|
|
|
— |
|
|
|
1,838 |
|
|
|
— |
|
|
|
1,838 |
|
Settlement of Executive Performance and Restricted
Share Units |
|
|
19,206 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,206 |
|
Share
repurchases |
|
|
(12,951 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,951 |
) |
Redemption of non-management directors share
units |
|
|
757 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
757 |
|
Share-based compensation expense |
|
|
— |
|
|
|
1,834 |
|
|
|
— |
|
|
|
— |
|
|
|
1,834 |
|
Balance at September 30, 2023 |
|
$ |
2,306,545 |
|
|
$ |
74,389 |
|
|
$ |
161,552 |
|
|
$ |
(1,158,751 |
) |
|
$ |
1,383,735 |
|
(Stated
in thousands of Canadian dollars) |
|
Shareholders’ Capital |
|
|
Contributed Surplus |
|
|
Accumulated Other Comprehensive Income |
|
|
Deficit |
|
|
Total Equity |
|
Balance at January 1, 2022 |
|
$ |
2,281,444 |
|
|
$ |
76,311 |
|
|
$ |
134,780 |
|
|
$ |
(1,266,980 |
) |
|
$ |
1,225,555 |
|
Net loss for the period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(37,776 |
) |
|
|
(37,776 |
) |
Other comprehensive income
for the period |
|
|
— |
|
|
|
— |
|
|
|
34,355 |
|
|
|
— |
|
|
|
34,355 |
|
Share options exercised |
|
|
8,843 |
|
|
|
(2,681 |
) |
|
|
— |
|
|
|
— |
|
|
|
6,162 |
|
Share repurchases |
|
|
(10,010 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,010 |
) |
Share-based compensation
reclassification |
|
|
14,083 |
|
|
|
(219 |
) |
|
|
— |
|
|
|
— |
|
|
|
13,864 |
|
Share-based compensation expense |
|
|
— |
|
|
|
646 |
|
|
|
— |
|
|
|
— |
|
|
|
646 |
|
Balance at September 30, 2022 |
|
$ |
2,294,360 |
|
|
$ |
74,057 |
|
|
$ |
169,135 |
|
|
$ |
(1,304,756 |
) |
|
$ |
1,232,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 THIRD QUARTER RESULTS 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 Thursday, October 26, 2023.
To participate in the conference call please
register at the URL link below. Once registered, you will receive a
dial-in number and a unique PIN, which will allow you to ask
questions.
https://register.vevent.com/register/BId053b471716a4107bc5fb11e4c46d7b5
The call will also be webcast and can be
accessed through the link below. A replay of the webcast call will
be available on Precision’s website for 12 months.
https://edge.media-server.com/mmc/p/vzdcuqii
About Precision
Precision is a leading provider of safe and
environmentally responsible High Performance, High Value services
to the energy industry, offering customers access to an extensive
fleet of Super Series drilling rigs. Precision has commercialized
an industry-leading digital technology portfolio known as Alpha™
that utilizes advanced automation software and analytics to
generate efficient, predictable, and repeatable results for energy
customers. Our drilling services are enhanced by our EverGreen™
suite of environmental solutions, which bolsters our commitment to
reducing the environmental impact of our operations. Additionally,
Precision offers well service rigs, camps and rental equipment all
backed by a comprehensive mix of technical support services and
skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta,
Canada and is listed on the Toronto Stock Exchange under the
trading symbol “PD” and on the New York Stock Exchange under the
trading symbol “PDS”.
For further information, please contact:
Lavonne Zdunich, CPA, CADirector, Investor
Relations403.716.4500
800, 525 - 8th Avenue S.W.Calgary, Alberta,
Canada T2P 1G1Website: www.precisiondrilling.com
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