(Reuters) - Precision Drilling Corp (PD.TO), Canada’s largest oil and gas drilling contractor, expects demand for its rigs to stabilize in the United States in the coming months after falling for several quarters and squeezing its profits.
The number of rigs drilling for natural gas in the United States edged higher for the second straight week ended April 21, after declining for the last 18 months. U.S. rig count is down about 60 percent since peaking at 936 in 2011.
The fall in gas-directed drilling in the United States, which began in late 2011, continued through the first quarter of 2013, Chief Executive Kevin Neveu said in a statement.
The company’s drilling activity was down 23 percent during the quarter. In the United States, its average active rig count was 81, down 22. In Canada, the count was 123 rigs, down 11, from a year earlier.
Precision’s first-quarter earnings fell to C$93.3 million, or 33 Canadian cents per share, in the first quarter, from C$111.1 million, or 39 Canadian cents per share, a year earlier.
Revenue fell 7 percent to C$595.7 million.
The company, which operates about a quarter of Canada’s onshore drilling rigs, recorded an impairment charge of C$192 million in the quarter ended December 31 related to the decommissioning of 52 drilling rigs.
The Calgary, Alberta-based company also raised its capital expenditure for this year to C$533 million from C$526 million it estimated in February.
It said it expects typical seasonal softness through the second quarter in Canada. During the spring, the wet weather and the thaw make the ground unstable, which makes it difficult for drillers to move their heavy equipment.
Precision’s shares closed at C$8.05 on the Toronto Stock Exchange on Wednesday.
Reporting by Shounak Dasgupta in Bangalore; Editing by Sreejiraj Eluvangal, Sriraj Kalluvila