UPDATE 2-Canada's Precision Drilling says oil producers hiking budgets

Thu Jul 21, 2016 7:49am EDT
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* Company says Q2 drilling activity lowest in decades

* Q2 loss/shr C$0.20 vs. estimates of loss of C$0.24

* U.S. rig count up 27 pct to 28 active rigs from trough

* Company sees continued demand for Tier 1 rigs (Adds details, compares results with analysts' estimate)

July 21 (Reuters) - Canada's Precision Drilling Corp said drilling activity in North America in the second quarter was the lowest in decades, but added that oil producers were resetting capital budgets due to the recent rally in crude prices.

Due to the weak activity, Precision Drilling also posted a bigger loss for the period, but managed to beat analysts' estimates because of improved drilling efficiencies.

North American oil producers have started putting rigs back to work, encouraged by a 70 percent jump in U.S. crude oil prices since they hit near-record lows in February.

"Our customers appear to be looking beyond the oil price lows of earlier this year, resetting spending to current commodity price levels, and beginning the early stages of planning for improved longer term fundamentals," Precision Drilling Chief Executive Kevin Neveu said.

Encana Corp on Thursday said it would raise its 2016 capital expenditure program by $200 million.   Continued...