April 23, 2008 / 11:13 AM / in 10 years

Precision Drilling profit down, cuts '08 spending

TORONTO (Reuters) - First-quarter profit at Precision Drilling Trust PD_u.TO fell 33 percent as lower demand and prices weighed on results, the company said on Wednesday, as it lowered its 2008 capital spending forecast.

Precision, Canada’s No. 1 oil and gas drilling contractor, said it earned C$106.3 million, or 84 Canadian cents per unit, down from C$158.1 million, or C$1.26 in the first quarter of 2007.

The result lagged the average profit forecast of 96 Canadian cents per unit among analysts polled by Reuters Estimates.

Precision now expects capital spending to be C$330 million this year, down from C$370 million. Some C$260 million of the spending will be devoted to capital expansion, the trust said.

Revenue for the quarter was C$342.7 million, down 17 percent from C$410.5 million a year earlier.

Precision said its profit was hampered by lower natural gas prices and a weak U.S. dollar, which slowed demand in its Canadian operations.

The trust, which runs about a third of Canada’s onshore drilling fleet, drilled 1,450 wells during the quarter, compared with 1,728 in the prior-year quarter. Its rig utilization rate fell to 50 percent from 54 percent a year ago.

($1=$1.01 Canadian)

Reporting by Jonathan Spicer; Editing by Scott Anderson

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