Precision Announces Reduced 2019 Capital Expenditure Plan and Board Approval of Normal Course Issuer Bid
19 Août 2019 - 12:00PM
This news release contains "forward-looking
information and statements" within the meaning of applicable
securities laws. For important information with respect to such
forward-looking information and statements and the further
assumptions and risks to which they are subject, see the
"Cautionary Statement Regarding Forward-Looking Information and
Statements" later in this news release. All values in Canadian
dollars except as indicated.
Precision Drilling Corporation (“Precision” or
the “Company”) (TSX:PD; NYSE:PDS) made a series of announcements
which include:
- Reduction of 2019 capital expenditure plan by $25 million, down
to $144 million from $169 million, following the completion of
Kuwait new build project;
- Board approval to implement a normal course issuer bid of up to
10% of the public float;
- Update on 2019 year-to-date debt reduction of $136 million, on
track for 2019 target debt reduction of $200 million;
- Preliminary guidance on its 2020 planned capital expenditure
range of $60 million to $80 million, primarily consisting of
maintenance capital, in line with 2019 maintenance capital
spending; and
- 2020 debt repayment target range of $100 million to $150
million.
Precision announced today that it will be
reducing its 2019 capital expenditure plan to approximately $144
million, down $25 million from its previously stated budget of $169
million. Additionally, the Company intends to make an application
to implement a normal course issuer bid (“NCIB”) through the
facilities of the Toronto Stock Exchange (“TSX”) and the New York
Stock Exchange for a portion of its common shares (“Common
Shares”). Precision intends to purchase up to 10% of the public
float over a period of twelve months from acceptance of the NCIB.
The Company’s NCIB will be made in accordance with the requirements
of the TSX and remains subject to TSX approval. Further details
regarding the NCIB will be provided following TSX approval.
Precision is also pleased to announce that 2019
year-to-date debt reduction is now at $136 million, as a result of
additional open market repurchases in the third quarter and the
Company expects to meet its recently increased 2019 target of $200
million. Cumulative debt reduction since the start of 2018 is
approximately $310 million, leaving Precision well positioned to
meet its long-term targeted range of $400 million to $600 million
by the end of 2021. This debt reduction plan will remain a key
priority heading into 2020.
Precision’s preliminary guidance for 2020
includes: projected capital expenditure range of $60 million to $80
million and targeted debt reduction range of $100 million to $150
million. The preliminary 2020 capital expenditure plan is based on
current activity levels and market conditions, allowing for cash
generation flexibility in what remains a volatile commodity
environment. The year-over-year decrease is largely due to
our 2019 Kuwait new build rig deployed on July 1. Regarding
Precision’s targeted debt reduction range, the Company plans to
utilize anticipated cash flow to fully retire its 2021 notes by the
end of next year.
Precision’s CEO, Kevin Neveu stated:
“Precision’s proven free cash flow generation ability has allowed
the Company to accelerate debt reduction while funding the most
attractive contracted investments. We believe this NCIB
represents another tool for Precision to enhance the value of our
underlying shares and may be particularly effective in the current
depressed share price environment, while we continue to achieve our
strategic priorities. We remain firmly committed to our
deleveraging strategy and are reaffirming our recently increased
2019 debt reduction target of $200 million and or our long-term
targeted range of $400 million to $600 million by the end of
2021.”
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", "intend", "plan", "expect",
"believe", "will", "may", "continue", "project", "potential" 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 following:
- our planned capital expenditures for 2019 and 2020;
- anticipated positive cash flows and future debt repayments;
and
- statements with respect to the anticipated approval of the NCIB
by the TSX and advantages to shareholders of the NCIB.
Undue reliance should not be placed on
forward-looking information and statements. Whether actual results,
performance or achievements will conform to our expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from our expectations. Such risks and uncertainties include, but
are not limited to:
- volatility in the price and demand for oil and natural
gas;
- fluctuations in the demand for contract drilling, well
servicing and ancillary oilfield services;
- our customers’ inability to obtain adequate credit or financing
to support their drilling and production activity;
- changes in drilling and well servicing technology which could
reduce demand for certain rigs or put us at a competitive
disadvantage;
- shortages, delays and interruptions in the delivery of
equipment supplies and other key inputs;
- the effects of seasonal and weather conditions on operations
and facilities;
- the availability of qualified personnel and management;
- a decline in our safety performance which could result in lower
demand for our services;
- changes in environmental laws and regulations such as increased
regulation of hydraulic fracturing or restrictions on the burning
of fossil fuels and greenhouse gas emissions, which could have an
adverse impact on the demand for oil and gas;
- terrorism, social, civil and political unrest in the foreign
jurisdictions where we operate;
- fluctuations in foreign exchange, interest rates and tax rates;
and
- other unforeseen conditions which could impact the use of
services supplied by Precision and Precision’s ability to respond
to such conditions.
Readers are cautioned that the forgoing list of
risk factors is not exhaustive. Additional information on these and
other factors that could affect our business, operations or
financial results are included in reports on file with applicable
securities regulatory authorities, including but not limited to
Precision’s Annual Information Form for the year ended December 31,
2018, which may be accessed on Precision’s SEDAR profile at
www.sedar.com or under Precision’s EDGAR profile at www.sec.gov.
The forward-looking information and statements contained in this
news release are made as of the date hereof and Precision
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, except as required by
law.
About PrecisionPrecision is a leading provider
of safe and High Performance, High Value services to the oil and
gas industry. Precision provides customers with access to an
extensive fleet of Super Series drilling rigs supported by an
industry leading technology platform that offers the most
innovative drilling solutions to deliver efficient, predictable and
repeatable results through service differentiation. Precision also
offers directional drilling services, well service rigs, camps and
rental equipment all 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”.
For further information, please contact:
Carey Ford, CFASenior Vice President and Chief
Financial Officer713.435.6136 Dustin Honing, CPAManager, Investor
Relations403.716.4515 Precision Drilling Corporation800, 525 - 8th
Avenue S.W.Calgary, Alberta, Canada T2P 1G1Website:
www.precisiondrilling.com
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