December 6, 2010 / 10:48 PM / in 7 years

UPDATE 1-Precision Drilling nearly doubles budget for 2011

* C$405 million budget set for 2011

* C$171 million earmarked for new builds

* Shares rise 1 pct to C$9.24 in Toronto (In U.S. dollars unless noted)

CALGARY, Alberta, Dec 6 (Reuters) - Precision Drilling Corp (PD.TO) said on Monday it will nearly double its capital spending in 2011 to C$405 million ($405 million) as Canada’s biggest contract oil and gas driller builds new rigs and upgrades its existing fleet.

Precision, which also operates in the United States, said a recent $650 million debt offering gave it the wherewithal to boost expenditures. The company said in its third-quarter results it expects to spend C$218 million in 2010.

Of total spending, C$171 million is earmarked for expansion, including the cost of completing the remaining five of nine new rigs already announced as well as an additional five in 2011, the company said.

It will also upgrade up to 12 of its existing rigs, including buying new top drives, masts and engines, at a cost of C$115 million.

Another C$119 million will go to sustaining and infrastructure expenditures.

Precision shares rise 12 Canadian cents, or 1 percent, to close at C$9.24 on the Toronto Stock Exchange.

$1=$1 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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