April 22, 2010 / 11:40 AM / 8 years ago

UPDATE 3-Precision Drilling says low dayrates to hurt revenue

* Q1 shr C$0.22 vs est C$0.22

* Q1 revenue C$373.1 mln vs est C$381.3 mln

* Raises 2010 capex by C$47 million (Recasts; adds comment, updates share movement)

BANGALORE, April 22 (Reuters) - Canada’s No.1 oilwell-drilling company Precision Drilling Trust PD_u.TO posted a profit in line with analysts’ expectations but warned that average per day revenue would contract until spot market dayrates rose meaningfully.

“Even with the year-over-year improvements in rig utilization, there has been virtually no change in spot market dayrates charged to customers in Canada, and only modest improvements in dayrates in the United States,” Precision said in a statement.

Precision increased its 2010 capital expenditure by C$47 million to C$122 million, but said it expects to keep capital expenditures at levels equal with market activity for the year.

First-quarter profit was C$62 million, or 22 Canadian cents a unit, compared to C$57.4 million, or 28 Canadian cents a unit last year.

The number of outstanding units rose 35 percent to 285,669 from last year.

Revenue at the trust, which intends to convert to a corporation by June 1, fell 17 percent weighed by lower average dayrates in the United States and Canada.

Revenue in Precision’s contract drilling services segment fell 20 percent while revenue rose 1 percent in its Canada-based completion and production services segment.

“Overall, lower-than-expected revenue in Canada was offset by higher-than-expected U.S. and international revenue,” TD Securities analyst Roger Serin said in a note.

Precision, which expanded into the United States in 2008 with its $2 billion acquisition of Grey Wolf Inc, expects to have an average of about 83 rigs under term contract in North America in the second quarter.

For 2010, Precision expects to have an average of about 75 rigs under term contract, with 37 each contracted in the United States and Canada, and one in Mexico.

Precision Drilling’s units were trading up 2 percent at C$8.12 Thursday on the Toronto Stock Exchange.

For related alerts, please click [ID:nWNAB0763] (Reporting by Aftab Ahmed in Bangalore; Editing by Maju Samuel, Roshni Menon)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below