July 24, 2014 / 10:29 AM / 4 years ago

Higher rig contracts boost Precision Drilling's revenue

(Reuters) - Precision Drilling Corp (PD.TO) (PDS.N), Canada’s largest oil and gas drilling contractor, reported a 25 percent jump in quarterly revenue as its rigs under contract were at their highest level since 2006.

The company also raised its 2014 capital budget by 12 percent to C$934 million ($871 million), citing strong demand for its new rigs.

Precision Drilling, which competes with Ensign Energy Services Inc (ESI.TO), Trinidad Drilling Ltd (TDG.TO) and Savanna Energy Services Corp SVY.TO, also provides well completion and production services.

Precision Drilling said it is expanding its rig-building capacity and expects to deliver three new rigs per month starting October, and four rigs per month starting 2015, if customer demand continued at the current pace.

The average rig count in both Canada and U.S rose by 13 to 53 rigs and 93 rigs, respectively.

Precision Drilling, citing industry sources, said U.S. active land drilling rig count was up about 6 percent from last year. Canadian active land drilling rig count was up about 18 percent.

The company posted a loss of C$7 million, or 2 Canadian cents per share, in the second quarter ended June 30, after it changed its method of calculating depreciation. The change reduced earnings by about 5 Canadian cents per share.

Precision Drilling had reported a profit of C$473,000 a year earlier.

Revenue rose to C$475 million from C$379 million.

The company’s stock, which has risen 45 percent in the last 12 months, closed at C$14.74 on the Toronto Stock Exchange.($1 = 1.0720 Canadian Dollars)

Reporting by Anannya Pramanick and Tanvi Mehta in Bangalore; Editing by Sriraj Kalluvila

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