February 14, 2008 / 12:55 PM / 10 years ago

Precision Drilling profit sags

TORONTO (Reuters) - Precision Drilling Trust PD_u.TO reported a 30 percent lower fourth-quarter profit on Thursday, due in part to soft North American natural gas prices.

Precision, the country’s biggest oil and gas drilling contractor, reported earnings of $89.3 million, or 71 cents per unit for the quarter, compared with $127.4 million, or $1.01 per unit in the fourth quarter of 2006.

That beat an average estimate of 61 cents per unit, according to Reuters Knowledge.

Revenue for the quarter was $248.7 million, compared with $328 million in the year ago quarter.

The trust said a strong Canadian dollar, record industry rig capacity and changes to government royalties on certain oil and natural gas production in Alberta also hurt results.

Precision, which runs about a third of the onshore drilling rigs in Canada, drilled 1,124 wells in Canada in the quarter, compared with 1,299 a year earlier. Rig utilization rate fell to 34 percent from 43 percent in the third quarter of 2006.

The company’s share of the Canadian market fell slightly, to 22 percent of wells drilled from 24 percent in the year-earlier quarter and operating days dropped to 7,612 from 9,568.

Looking forward, Precision said weaker oilfield services demand seen in 2007 is expected to continue through the first half of 2008. The trust said it would remain “highly focused” on expansion in the United States.

Reporting by John McCrank; Editing by Scott Anderson

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