Precision Drilling has 110 drilling rigs currently running in North America: seeing strengthening demand – 45 rigs under contract for 2017; company has filled 1,000 positions
Calgary-based Precision Drilling Corporation (ticker: PDS) announced planned capital expenditures for 2017 of CAD$109 million. The company said its 2017 capital expenditure plan would be allocated as follows:
- $51 million to upgrade existing rigs,
- $ 7 million expansion capital, carried forward from 2016 international new build drilling rigs,
- $51 million for sustaining and infrastructure.
Precision said it expects the $109 million will be split $105 million in the Contract Drilling Services segment and $4 million in the Completion and Production Services segment.
Precision’s expansion capital plan includes the upgrade of 33 Super Triple rigs in North America and long lead items for additional future upgrades. Precision’s sustaining and infrastructure capital plan is based upon currently anticipated activity levels for 2017 and scheduled infrastructure projects, primarily related to technology and systems.
Precision said it anticipates its 2016 capital expenditures will be approximately $213 million, down $9 million from previous guidance. Precision currently has 239 Tier 1 drilling rigs, up from 93 in 2009.
Precision’s President and Chief Executive Officer Kevin Neveu said, “Recent actions to stabilize and improve commodity prices appear to be well received by our customers.”
Source: Precision Drilling
Precision Drilling CEO Kevin Neveu
“We are seeing signs of strengthening demand for our services for the upcoming Canadian winter drilling season and improving demand in U.S. regions where we operate. Since our third quarter earnings release in October, we have added three rigs years to our 2017 contract backlog and now have an average of 45 rigs under contract for 2017.
“With over 110 drilling rigs currently running in North America, we are experiencing customer demand greater than the prior year for the first time in over two years and are currently enjoying our historically strongest North American market share.
Source: Precision Drilling
“The projected 2017 capital budget anticipates spending $51 million to add varying combinations of high pressure mud systems, pad walking systems, rig automation software and additional mud pumping capacity to 33 of our Super Triple drilling rigs. This budget amount also includes provisions for long-lead components for additional future rig upgrades. This rig upgrade program is contingent on customer demand and achieving firm customer contract commitments.
Precision will implement technology enhancements to integrate field ops with ERP
“Precision’s planned infrastructure spending includes the implementation of major technology enhancements to integrate our field operations with our Enterprise Resource Planning (ERP) system. These enhancements will substantially reduce the administrative load on our rig managers and field operations group with most rig-level information entered electronically. Predictive maintenance and equipment monitoring features will also further improve equipment reliability while reducing field maintenance costs,” Neveu said.
Source: Precision Drilling
