February 12, 2010 / 12:42 PM / 8 years ago

UPDATE 1-Precision Drilling swings to Q4 loss on charges

* Intends to convert to corporation by May 31

* Q4 loss C$0.09/shr vs EPS C$0.66 yr ago

* Revenue falls 15 pct

Feb 12 (Reuters) Precision Drilling Trust PD_u.TO, Canada’s No.1 oilwell-drilling company, swung to a quarterly loss, stung by charges.

Separately, the company said it intends to convert to a corporation. It expects to complete the conversion by May 31.

The company, which said in December it would cut its drilling fleet by 10 percent to cope with a widespread drop in in drilling sparked by the recession, posted a loss of C$24.9 million, or 9 Canadian cents per unit, compared with earnings of C$92.4 million, or 66 Canadian cents per unit, a year ago.

Fourth-quarter results included C$82 in impairment charges related to the decommissioning of 38 drilling rigs, 30 well servicing rigs and nine subbing units.

Finance charges increased by C$27 million in the quarter, Precision said.

The company was expected to report a profit of 7 Canadian cents a unit, according to the average of analysts’ estimates compiled by Thomson Reuters I/B/E/S.

Precision has suspended payouts to investors as it and its rivals struggle to cope with a drop in drilling, low natural-gas prices and new technology that uses one well, rather than several, to produce gas from a large area.

The trust’s revenue fell 15 percent to C$286.1 million.

Precision’s units closed at C$8.81 Thursday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Vinu Pilakkott)

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