CALGARY, ALBERTA
This news release contains "forward-looking information and
statements" within the meaning of applicable securities laws. For a
full discussion of the forward-looking information and statements
and the risks to which they are subject, see the "Cautionary
Statement Regarding Forward-Looking Information and Statements"
below.
December 2007 Distribution
Precision Drilling Trust ("Precision" or the "Trust") announced
today that its Board of Trustees has approved a cash distribution
for the month of December 2007 of $0.13 per trust unit of
Precision. The distribution will be payable on January 15, 2008 to
unitholders of record on December 31, 2007. The ex-distribution
date is December 27, 2007. Holders of Class B limited partnership
units of Precision Drilling Limited Partnership ("PDLP") will
receive the economic equivalent treatment.
2007 Special Year-End Distribution
The Board of Trustees has also approved a special year-end
distribution of $0.40 per trust unit, to be settled $0.24 per trust
unit "in-kind" and $0.16 per trust unit in cash. This ensures that
the 2007 distributions declared will at least be equal to the
Trust's taxable income for 2007, as required under Precision's
Declaration of Trust. The special year-end distribution will be
settled on January 15, 2008 to unitholders of record on December
31, 2007. The ex-distribution date is December 27, 2007. Holders of
Class B limited partnership units of PDLP will receive the economic
equivalent treatment.
The "in-kind" portion of the special year-end distribution
allows Precision to retain balance sheet strength and fund planned
asset growth. Settled "in-kind" essentially means that unitholders
will not receive cash or additional trust units. Immediately after
the "in-kind" special year-end distribution, the outstanding trust
units of the Trust will be consolidated so that the number of trust
units will remain unchanged from the number outstanding prior to
the "in-kind" special year-end distribution. Holders of Class B
limited partnership units of PDLP will receive the economic
equivalent treatment.
Non-resident holders of trust units will be subject to
applicable Canadian withholding tax on the "in-kind" special
year-end distribution. The applicable withholding tax will be
settled from the December special year-end cash distribution paid
in January 2008.
Information outlining the implication of the "in-kind" special
year-end distribution, consolidation process and resulting income
tax treatment for Trust and PDLP unitholders is located on the
Trust's website at
http://www.precisiondrilling.com/UnitholderInfo/taxation/Taxation2007.cfm.
2008 Capital Expenditure Program Targets "Super" Series Rig
Expansion
Precision plans to initiate record spending of $370 million in
its 2008 capital expenditure program, up approximately 70% from
2007. The program targets rapidly growing high performance drilling
requirements in North American markets for directional, horizontal
and environmentally sensitive drilling programs.
High performance drilling rigs enable customers to significantly
improve their drilling economics by safely drilling and completing
complex oil and gas wells considerably faster. Precision's Super
Single(TM) rigs demonstrate this high performance capability
combining high mobility, automation, advanced control systems,
minimal environmental impact with highly trained crews. Precision
will further develop and market its highly successful Super
Single(TM) drilling rig and expand the product line including the
recently released "Super Triple" and the new for 2008 "Super
Double" rigs for the deeper high performance drilling
opportunities. The "Super" series high performance drilling rigs
are valued by Precision's customers and achieve favorable day rates
and terms as compared to traditional rigs. This "Super" series
capital expansion plan coupled with Precision's high performance
rig crews will further differentiate Precision's service offering
to customers.
The capital allocation is estimated as follows:
- New 2008 expansion capital of about $260 million to initiate
construction of 19 new "Super" series land drilling rigs for staged
delivery over the next 6 to 18 months and to provide other
equipment additions for the Contract Drilling and Completion and
Production Services segments.
During 2007, Precision grew its United States drilling rig fleet
from one to twelve. The pace of growth for 2008 is expected to
increase with a continued mix of rig deployments from Canada and
new rig construction.
Precision is in discussions with customers regarding the new
rigs and will update contractual status on a quarterly basis.
During the fourth quarter of 2007, Precision permanently
decommissioned 11 drilling rigs and 16 service rigs from its
Canadian fleet and will continue to assess the fleet for less
productive rigs on an ongoing basis.
- Carry over expansion capital of about $35 million to complete
three drilling rigs under contract for North American customers as
previously announced plus one additional new Super Single(TM) rig
recently contracted for work in the Alberta oil sands.
- Upgrade capital expenditures are estimated to be marginally
higher than 2007 at about $75 million. These upgrade expenditures
are for the betterment of existing equipment and
infrastructure.
Precision is pleased to announce that international drilling
operations are underway with one drilling rig being deployed from
Canada to a Latin American destination for commencement early in
the first quarter of 2008. This contractual arrangement is enabling
Precision to reestablish internal infrastructure for the
international market and reflects early marketing efforts to
identify opportunities. The expiration in August 2008 of certain
non-compete provisions from prior business divestitures creates
global diversification opportunities for Precision in the well
known, high producing, hydrocarbon regions of the world.
Precision expects to begin 2008 with a drilling rig fleet of 245
with 232 positioned in Canada, 12 in the United States and one in
Latin America for an industry market share of about 27% in Canada
and 1% in the United States.
For the service rig division in Canada, Precision's Completion
and Production services segment expects to begin 2008 with a fleet
of 223, an industry market share of about 20%.
Precision intends to fund upgrade capital expenditures and cash
distributions to unitholders through cash flow from operating
activities and fund expansion capital expenditures through a
combination of cash flow from operating activities and credit
facilities. Precision's fiscal objective is to manage long-term
debt levels to maintain a strong financial position throughout the
oilfield services seasonal and economic cycles.
Cautionary Statement Regarding Forward-Looking Information and
Statements
Certain statements contained in this news release, including
statements related to the special year-end distribution, the 2008
capital expenditure program and the rapidly growing high
performance drilling market and statements that contain words such
as "likely", "could", "should", "can", "anticipate", " intend",
"expect", "believe", "will", "may" and similar expressions and
statements relating to matters that are not historical facts
constitute "forward-looking information" within the meaning of
applicable Canadian securities legislation and "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act of 1995.
These statements are based on certain assumptions and analysis made
by the Trust in light of its experience and its perception of
historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate
in the circumstances. However, whether actual results, performance
or achievements will conform to the Trust's expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from the Trust's expectations. Such risks and uncertainties
include, but are not limited to: fluctuations in the price and
demand for oil and natural gas; fluctuations in the level of oil
and natural gas exploration and development activities;
fluctuations in the demand for well servicing, contract drilling
and ancillary oilfield services; the effects of weather conditions
on operations and facilities; the existence of competitive
operating risks inherent in well servicing, contract drilling and
ancillary oilfield services; general economic, market or business
conditions; changes in laws or regulations, including taxation,
environmental and currency regulations; availability of qualified
personnel or management; and other unforeseen conditions which
could impact on the use of services supplied by Precision.
Consequently, all of the forward-looking information and
statements made in this news release are qualified by these
cautionary statements and there can be no assurance that the actual
results or developments anticipated by the Trust will be realized
or, even if substantially realized, that they will have the
expected consequences to or effects on the Trust or its business or
operations. Except as may be required by law, the Trust assumes no
obligation to update publicly any such forward-looking information
and statements, whether as a result of new information, future
events or otherwise.
Precision is a leading provider of safe, high performance energy
services to the North American oil and gas industry. Precision
provides customers with access to an extensive fleet of contract
drilling rigs, service rigs, camps, snubbing units, wastewater
treatment units and rental equipment backed by a comprehensive mix
of technical support services and skilled, experienced
personnel.
Precision Drilling Trust is listed on the Toronto Stock Exchange
under the trading symbol "PD.UN" and on the New York Stock Exchange
under the trading symbol "PDS".
Contacts: Doug Strong, Chief Financial Officer of Precision
Drilling Corporation, Administrator of Precision Drilling Trust
(403) 716-4500 (403) 264-0251 (FAX) Precision Drilling Trust 4200,
150 - 6th Avenue S.W. Calgary, Alberta T2P 3Y7 Website:
www.precisiondrilling.com
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