February 10, 2011 / 11:25 AM / 7 years ago

UPDATE 2-Precision Drilling post Q4 profit on rising rig use

* Q4 shr C$0.02 vs shr loss of C$0.09

* Says drilling for oil, liquids spurs demand

* Active rigs in U.S., Canada rise

Feb 10 (Reuters) - Precision Drilling Corp , Canada’s largest oil- and gas-well drilling company, posted a fourth-quarter profit, helped by a resurgence in drilling for oil and natural gas liquids.

The company said all of its five new rig builds in 2011 were intended for oil and liquids rich natural gas drilling targets.

“About 60 percent of Precision’s rigs working today are drilling for oil or liquids rich natural gas targets,” Chief Executive Kevin Neveu said in a statement.

Results for the Oct-Dec quarter where also helped by robust oil prices, which averaged $85.24 a barrel — up 12 percent from the year before. However, natural gas operations were held back by 19 percent drop in gas prices, which averaged $4.93 per million British thermal units.

The company, which supplied a drilling rig to the effort that rescued 33 trapped Chilean miners last year, said rig count in the United States went up 52 percent year-over-year, while Canadian rig count was up 48 percent.

In December, Precision had said it would nearly double its capital spending in 2011 to C$405 million ($405 million) as it builds new rigs and upgrades its existing fleet.

For the fourth quarter, the company reported net income of $5.5 million, or 2 Canadian cents a share, compared with a net loss of $25 million of 9 Canadian cents a share, a year earlier.

Excluding items, it earned 31 Canadian cents a share compared with analysts’ expectation of 21 cents, according to Thomson Reuters I/B/E/S.

Revenue for the quarter rose 52 percent to $436 million.

Shares of Precision Drilling were down a percent at C$10.40. Shares of Precision’s peers, Trinidad Drilling Ltd and Ensign Energy Services Inc , were also trading lower. (Reporting by Amruta Sabnis and Arup Roychoudhury in Bangalore)

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