3 Min Read
(Adds details, background, shares)
Oct 27 (Reuters) - Precision Drilling Corp , Canada's largest oil and natural gas drilling contractor, reported a better-than-expected 79 percent jump in quarterly profit, helped by higher pricing and drilling activity.
The company, which mainly has land-based rigs, said rig utilization days rose 20 percent in the United States - which contributes 86 percent of revenue - compared with an industry-wide increase of 8 percent.
The results are in line with the expected trend of strong quarterly results by onshore drillers, helped by the shale-fueled drilling boom in North America. The slump in crude oil prices is expected to weigh more on offshore drillers.
However, Precision Drilling cut its expected capital plan for 2014 by about 3 percent to C$908 million ($808 million), citing deferral of infrastructure and upgrade projects.
"... While overall customer demand may be impacted by further decreases in commodity prices, the demand for our super series fleet is expected to remain strong as a result of the value generated by these rigs," Chief Executive Kevin Neveu said in a statement.
Precision Drilling, whose Canadian peers include Trinidad Drilling Ltd, Ensign Energy Services Inc and Savanna Energy Services Corp, said rig utilization days rose 6 percent in Canada and 4 percent globally in the quarter ended Sept. 30.
That helped net income rise to C$52.8 million, or 18 Canadian cents per share, from C$29.4 million, or 10 Canadian cents per share, a year earlier.
Analysts on average were expecting 17 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Precision Drilling's contract drilling services revenue rose 22 percent to C$502.6 million, or about 86 percent of total revenue. Completion and production services revenue increased 7 percent.
Total revenue rose about 20 percent to C$584.6 million, but fell slightly short of the average analyst estimate of C$585.8 million.
The Calgary-based company also raised its quarterly dividend 17 percent to 7 Canadian cents per share.
Precision Drilling shares are unchanged so far this year through Friday's close of C$9.95 on the Toronto Stock Exchange. That compares with a drop of about 26 percent in the stock of its three Canadian peers. ($1 = C$1.1233) (Reporting By Shubhankar Chakravorty in Bangalore; Editing by Savio D'Souza)