August 13, 2010 / 2:33 PM / in 7 years

UPDATE 1-Xtreme Coil posts surprise Q2 profit, shares rise

* Q2 EPS C$0.02 vs est loss C$0.02

* Rev down 34 pct

* In talks with customers about new projects

* Shares rise 5 pct

Aug 13 (Reuters) - Canada’s Xtreme Coil Drilling Corp XDC.TO reported a surprise quarterly profit helped mainly by lower expenses, sending its shares up 5 percent.

For the second quarter, net income was C$850,000 ($812,600), or 2 Canadian cents a share, compared with C$1.9 million, or 5 Canadian cents a share, a year ago.

Revenue fell 34 percent to C$15.1 million.

Analyst on average were expecting the company to post a loss of 2 Canadian cents a share, on revenue of C$13.7 million, according to Thomson Reuters I/B/E/S.

Operating expense fell 35 percent to C$9.4 million.

The company said it is in talks with current customers about new projects for the second half of the year.

In March, the company said one of its customers, an oilfield services company, had received notification from the operator that there was no remaining budget for expenditures relating to contracted work in the Chicontepec development project in Mexico. [ID:nSGE63K0KE]

“The market for new technology, alternating current electric, top drive drilling rigs has been improving in the United States as we move into the second half of 2010,” the company said.

Customers appear to prefer contracting newer technology rigs rather than conventional technology rigs, it added.

Shares of the company were trading up 13 Canadian cents at C$2.70 Friday morning on the Toronto Stock Exchange. ($1=1.046 Canadian Dollar) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Don Sebastian)

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