(Reuters) - Precision Drilling Corp PD.TO, Canada’s largest drilling contractor, said quarterly profit fell 53 percent on reduced oil and gas drilling activity in North America and that demand will remain weak if natural gas prices don’t recover.
Precision, which operates about a quarter of Canada’s onshore drilling rigs, raised its capital expenditure plan for the year to C$921 million from C$875 million to reflect costs related to two new service rig contracts and other upgrades.
Net income fell to C$39 million ($39.33 million), or 14 Canadian cents per share, from C$83 million, or 29 Canadian cents per share, a year earlier.
Revenue fell 2 percent to C$485 million.
“The results reflect weakening North American customer demand, a muted Canadian seasonal recovery, continued reductions in dry gas and gas-liquids drilling and a pause in the rapid growth of oil directed drilling in the North Dakota Bakken,” Precision CEO Kevin Neveu said in a statement.
Analysts were expecting earnings of 18 Canadian cents per share on revenue of C$481.4 million, according to Thomson Reuters, I/B/E/S.
The company’s shares closed at C$7.52 on the Toronto Stock Exchange on Wednesday. They have fallen 22 percent over the last six months as producing companies have cut back on drilling budgets to deal with volatile oil and weak natural gas prices.
Reporting by Maneesha Tiwari in Bangalore; Editing by Don Sebastian