(Canadian dollars, unless otherwise indicated)
Precision Drilling Corporation (TSX:PD) (NYSE:PDS) ("Precision"
or the "Corporation") announces a correction and clarification of
certain information contained in its release issued at 6:00 am ET
on December 6, 2011. The amount of $173 million for upgrade and
long-lead time item expenditures was incorrectly referenced as
long-lead time expenditures. In addition, the upgrade expenditures
were incorrectly grouped with sustaining and infrastructure
expenditures. The following also provides clarifying detail on the
announced expansion capital expenditures. The aggregate planned
capital expenditure remains unchanged. The complete and corrected
release follows.
Precision announced today that planned capital expenditures for
2012 are $1.14 billion. The 2012 capital expenditure plan includes
$738 million for expansion capital, $232 million for sustaining and
infrastructure expenditures and $173 million for upgrade and
long-lead time item expenditures. Precision expects that the $1.14
billion will be split $964 million in the Contract Drilling segment
and $179 million in the Completion and Production Services
segment.
Precision's expects that the $738 million in expansion capital
will be split $605 million in the Contract Drilling segment and
$133 million in the Completions and Production Services segment.
The expansion capital in the Contract Drilling segment includes
construction of seven additional new build drilling rigs, the
completion, in whole or part, of 27 new build Super Series drilling
rigs that were previously announced and the expansion of
directional drilling services. Of the seven new rigs announced
today, two have signed long-term contracts and the remaining five
rigs are expected to be contracted in early 2012 before the rigs
are completed. Including the seven announced today, the total
number of Precision Super Series new build rigs announced to date
during 2011 is 49. The $138 million of expansion capital in the
Completion and Production segment includes ten coil tubing units
and growth in Precision's Rental and U.S. business lines.
Precision's sustaining and infrastructure capital plan is based
upon currently anticipated activity levels for 2012.
The upgrade and long-lead time capital includes completion of
the rig upgrades previously announced in 2011 and approximately 14
additional rig upgrades in 2012. Long lead-time capital
expenditures include inventory that can be used for North American
or international new build opportunities and enhancements to
Precision's current fleet.
Precision anticipates its 2011 capital expenditures to be
approximately $740 million, a $140 million decrease from its
previous guidance. The Corporation has not reduced the amount of
the previously announced 2011 capital spending plan, but some costs
will be incurred subsequent to the fiscal year end in the first
part of 2012. All carry forward costs have been included in the
2012 capital expenditure guidance of $1.14 billion.
Precision also announced today the decommissioning of 36 Tier 3
drilling rigs and 13 service rigs from its fleet and expects to
take a pre-tax charge to earnings in the range of $100 million to
$120 million for the fourth quarter of 2011. Following the
decommissioning and planned new build deliveries as of December 31,
2011, Precision expects its rig fleet will stand at 338 rigs,
consisting of 188 rigs in Canada, 144 rigs in the United States and
six rigs internationally.
"Demand for Precision's High Performance, High Value services
continues to produce attractive growth opportunities for the
Corporation", stated Kevin Neveu, President & Chief Executive
Officer. "As a result of these growth opportunities, Precision has
meaningfully increased its capital spending plans throughout the
course of 2011 and into 2012. Capital expenditures in 2011 have
succeeded in establishing foundations for organic growth in 2012.
These successes include continued expansion of our land drilling
services into the most active plays in North America, establishing
a foothold in the Middle East, increasing our Super Series new
build capabilities, and establishing new platforms in directional
drilling and Completion and Production services targeting the
horizontal completion market. Additionally, the retirement of 36
idle Tier 3 rigs and announced new builds and upgrades underlines
our transition to a homogenous fleet of over 300 high performance,
horizontal capable drilling rigs that today's North American
marketplace demands".
"In 2012 we plan to continue to deploy capital toward rig new
builds and upgrades and make investments in infrastructure,
including expanding our field support presence with new facilities
and logistics support investments in Texas, North Dakota and
Alberta to aid Precision in continuing to reduce our operating
costs, improve our up-time and customer service capabilities.
Additionally in 2012, we expect to deliver our first ST-EU 1200
drilling rig designed for work in Europe."
"We are thrilled with our success over the past 12 months and
believe there will be continued growth in demand for Precision's
services. Despite our enthusiasm for the industry outlook and
growth, Precision will remain disciplined in our capital
expenditures by not completing new rig builds unless they are
secured by term contracts that provide acceptable financial
returns."
Cautionary Statement Regarding Forward-Looking Information and
Statements
Certain statements contained in this report, including
statements that contain words such as "could", "should", "can",
"anticipate", "estimate", "propose", "plan", "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 (collectively,
"forward-looking information and statements").
In particular, forward-looking information and statements
include, but are not limited to: the level of capital expenditures
and anticipated use of capital for 2011 and 2012, including plans
to build new rigs and purchase long-lead items; the timing of the
expenditures; the timing and terms of contractual commitments; the
size and deployment of Precision's rig fleet; the expansion of
Precision's current field support presence; plans for organic
growth in 2012; the results of our investments in directional
drilling and completion and production services; that there will be
continued growth in demand for Precision's services; the delivery
timing of the ST-EU 1200 rig; that Precision will continue to build
the High Performance, High Value brand in international oil and gas
regions; and that new build rigs will be secured by term contracts
that provide acceptable financial returns.
These forward-looking information and statements are based on
certain assumptions and analysis made by the Corporation 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 Corporation'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 Corporation'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; general economic, market or
business conditions; and other unforeseen conditions which could
impact the use of services supplied by Precision.
Consequently, all of the forward-looking information and
statements made in this report are qualified by these cautionary
statements and there can be no assurance that the actual results or
developments anticipated by the Corporation will be realized or,
even if substantially realized, that they will have the expected
consequences to, or effects on, the Corporation or its business or
operations. Readers are therefore cautioned not to place undue
reliance on such forward-looking information and statements. Except
as may be required by law, the Corporation assumes no obligation to
update publicly any such forward-looking information and
statements, whether as a result of new information, future events
or otherwise.
About Precision
Precision is a leading provider of safe and High Performance,
High Value services to the North American oil and gas industry.
Precision provides customers with access to an extensive fleet of
contract drilling rigs, service rigs, directional drilling
services, camps, snubbing units, water treatment units and rental
equipment backed by a comprehensive mix of technical support
services and skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta, Canada.
Precision is listed on the Toronto Stock Exchange under the trading
symbol "PD" and on the New York Stock Exchange under the trading
symbol "PDS".
Contacts: Precision Drilling Corporation Carey Ford Vice
President, Finance and Investor Relations 403.716.4575 403.716.4755
(FAX) Precision Drilling Corporation 800, 525 - 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1www.precisiondrilling.com
Precision Drilling (NYSE:PDS)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Precision Drilling (NYSE:PDS)
Historical Stock Chart
Von Jul 2023 bis Jul 2024