This news release contains “forward-looking information and
statements” within the meaning of applicable securities laws. For a
full disclosure 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”
later in this news release. This news release contains references
to Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss),
Funds Provided by (Used in) Operations and Working Capital. These
terms do not have standardized meanings prescribed under
International Financial Reporting Standards (IFRS) and may not be
comparable to similar measures used by other companies, see
“Non-GAAP Measures” later in this news release.
Precision Drilling announces 2020 first quarter financial
results:
- Revenue of $379 million was a decrease of 13% compared with the
first quarter of 2019.
- Net loss of $5 million or negative $0.02 per diluted share
compared to net earnings of $25 million or $0.08 per diluted share
in the comparable 2019 period.
- Earnings before income taxes, gain on repurchase of unsecured
senior notes, finance charges, foreign exchange, impairment
reversal, gain on asset disposals and depreciation and amortization
(Adjusted EBITDA, see “NON-GAAP MEASURES”) of $102 million was 6%
lower than the first quarter of 2019.
- Generated cash and funds provided by operations (see “NON-GAAP
MEASURES”) of $75 million and $81 million, respectively.
- First quarter ending cash balance was $97 million, an increase
of $22 million from December 31, 2019.
- First quarter capital expenditures were $12 million.
- Reduced our unsecured senior notes balance by $41 million and
repurchased and cancelled 3 million common shares for $5
million.
- Recognized restructuring charges of $10 million, comprised of
$9 million of severance and $1 million of costs associated with the
shutdown of our U.S. directional drilling operations.
- To secure our liquidity position, on April 9, 2020, we amended
our Senior Credit Facility to provide temporary covenant relief
through March 31, 2022.
Precision’s President and CEO Kevin Neveu
stated.
“The COVID-19 virus outbreak and associated
mitigation efforts, including travel and economic restrictions, has
led to a severe destruction in global oil demand. This has been
compounded by an oil price war, led by major oil producing
countries, resulting in collapsed commodity prices and the deepest
downturn the oil and gas services industry has ever experienced.
While Precision’s first quarter results were only nominally
impacted by the commodity price collapse, we expect a significant
and sustained reduction in customer demand for oil and gas services
well into next year.”
“Precision first responded by implementing
comprehensive safety protocols to protect the health and welfare of
our people and stakeholders from the risks of COVID-19. As a result
of acting quickly and aggressively, Precision has not suffered a
shut down, interruption in services, or any capability reduction
due to the pandemic. We previously announced a series of steps to
substantially reduce our fixed costs and capital spending plans,
while continuing to support our High Performance, High Value
business model. We believe these expenditure reductions and other
cash preservation measures will reduce our 2020 annualized cash
outflow by more than $100 million, continue to generate substantial
savings in 2021 and improve our existing liquidity position.
Furthermore, we worked with our banking group to amend the
covenants on our revolving credit facility to maintain revolver
access during these uncertain times with relief through the first
quarter of 2022. We will continue to prioritize Precision’s cash
liquidity during this downturn and will actively pursue any
additional cash generating opportunities within the
organization.”
“Despite the weakening North American industry
rig activity during the first quarter, Precision generated better
than expected financial results with Adjusted EBITDA of $102
million and cash provided by operations of $75 million. We executed
on our deleveraging strategic priority, retiring $41 million of
debt, while increasing our cash balance by $22 million to $97
million. Combined with our undrawn Senior Credit Facility, we
exited the quarter with over $800 million in available liquidity.
We have positioned our business to operate through lower activity
periods and believe our cash flow generation profile will allow us
to maintain strong liquidity, manage our debt maturities and reduce
financial leverage over time.”
“Our other strategic priorities of demonstrating
operational excellence and leveraging our Alpha technology platform
as a differentiator remain critical in today’s operating
environment. We believe our strong North American market share
achieved during the first quarter and sustained through the current
downturn demonstrates Precision’s competitive positioning and
operational excellence.”
“Once rig activity stabilizes, we expect our
customers’ attention will shift back to capital efficiency and rig
performance. We expect Precision’s modern Super Triple rig fleet
and industry leading technology offering will continue to position
us well to reliably meet these requirements. Precision’s
AlphaAutomation continues to perform very well and is generating
commercial returns. During the quarter, we installed six systems
bringing our installed base up to 40 rigs, including our two
training rigs. We recently partnered with a large U.S. customer to
launch AlphaAnalytics on their full fleet of Precision rigs. During
the first quarter an IOC standardized all U.S. Precision rigs to
have AlphaAutomation and will be utilizing several apps on each
rig. We believe our High Performance, High Value service offering
will continue to appeal to customers requiring predictable and
repeatable results.”
“We are encouraged by the Canadian federal
government’s $1.7 billion well abandonment and site rehabilitation
program, which we anticipate will be largely allocated to well
service providers. We believe that we are very well positioned to
capture these opportunities.”
“The voracity of this downturn is felt most by
the many thousands of dedicated men and women working in this
industry and especially those who through no fault of their own are
now without jobs. It is my, and the Precision organization’s hope,
that as our industry recovers, we can attract those people back. We
have faced significant challenges to start 2020 and Precision’s
people have responded exceptionally well by executing our enhanced
safety protocols and cost reduction initiatives while ensuring we
continue to support our customers’ needs. We are thankful for their
continued strong performance despite the ongoing challenges of this
pandemic event” concluded Mr. Neveu.
IMPACT OF COVID-19
In March 2020, the coronavirus (“COVID-19”)
outbreak was declared a pandemic by the World Health Organization
(WHO). Governments worldwide, including those countries in which
Precision operates, have enacted emergency measures to combat the
spread of the virus. These measures, which include the
implementation of travel bans, self-imposed quarantine periods and
social distancing, have caused a material disruption to businesses
globally resulting in an economic slowdown and decreased demand for
oil. Governments and central banks have reacted with significant
monetary and fiscal interventions designed to stabilize economic
conditions; however, the success of these interventions is not yet
determinable. In response to the dramatic reduction in demand,
governments of oil-producing nations and national oil companies are
working together to limit supply, but to date in 2020 there has
been a significant decline in the global price of oil. The
situation remains dynamic and the ultimate duration and magnitude
of the impact on the economy and the financial effect on us is not
known at this time.
SELECT FINANCIAL AND OPERATING
INFORMATION
Financial Highlights
|
Three months ended March 31, |
|
(Stated
in thousands of Canadian dollars, except per share amounts) |
2020 |
|
|
2019 |
|
|
% Change |
|
Revenue |
|
379,484 |
|
|
|
434,043 |
|
|
|
(12.6 |
) |
Adjusted EBITDA(1) |
|
101,904 |
|
|
|
107,967 |
|
|
|
(5.6 |
) |
Operating earnings(1) |
|
22,599 |
|
|
|
62,074 |
|
|
|
(63.6 |
) |
Net earnings (loss) |
|
(5,277 |
) |
|
|
25,014 |
|
|
|
(121.1 |
) |
Cash provided by
operations |
|
74,953 |
|
|
|
40,587 |
|
|
|
84.7 |
|
Funds provided by
operations(1) |
|
81,317 |
|
|
|
95,993 |
|
|
|
(15.3 |
) |
Capital spending: |
|
|
|
|
|
|
|
|
|
|
|
Expansion |
|
145 |
|
|
|
62,443 |
|
|
|
(99.8 |
) |
Upgrade |
|
1,508 |
|
|
|
3,674 |
|
|
|
(59.0 |
) |
Maintenance and infrastructure |
|
9,832 |
|
|
|
4,845 |
|
|
|
102.9 |
|
Intangibles |
|
57 |
|
|
|
438 |
|
|
|
(87.0 |
) |
Proceeds on sale |
|
(5,690 |
) |
|
|
(57,877 |
) |
|
|
(90.2 |
) |
Net capital spending |
|
5,852 |
|
|
|
13,523 |
|
|
|
(56.7 |
) |
Net earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
(0.02 |
) |
|
|
0.09 |
|
|
|
(122.2 |
) |
Diluted |
|
(0.02 |
) |
|
|
0.08 |
|
|
|
(125.0 |
) |
(1) See “NON-GAAP MEASURES”.
Operating Highlights
|
Three months ended March 31, |
|
|
2020 |
|
|
2019 |
|
|
% Change |
|
Contract drilling rig
fleet |
|
227 |
|
|
|
232 |
|
|
|
(2.2 |
) |
Drilling rig utilization
days: |
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
4,984 |
|
|
|
7,123 |
|
|
|
(30.0 |
) |
Canada |
|
5,769 |
|
|
|
4,344 |
|
|
|
32.8 |
|
International |
|
728 |
|
|
|
720 |
|
|
|
1.1 |
|
Revenue per utilization
day: |
|
|
|
|
|
|
|
|
|
|
|
U.S.(1) (US$) |
|
23,878 |
|
|
|
23,202 |
|
|
|
2.9 |
|
Canada(2) (Cdn$) |
|
21,444 |
|
|
|
22,977 |
|
|
|
(6.7 |
) |
International (US$) |
|
54,294 |
|
|
|
49,940 |
|
|
|
8.7 |
|
Operating cost per utilization
day: |
|
|
|
|
|
|
|
|
|
|
|
U.S. (US$) |
|
14,534 |
|
|
|
14,368 |
|
|
|
1.2 |
|
Canada (Cdn$) |
|
14,239 |
|
|
|
14,455 |
|
|
|
(1.5 |
) |
Service rig fleet |
|
123 |
|
|
|
135 |
|
|
|
(8.9 |
) |
Service
rig operating hours |
|
34,365 |
|
|
|
42,898 |
|
|
|
(19.9 |
) |
(1) Includes revenue from idle but contracted
rig days.(2) 2019 period includes lump sum revenue from contract
shortfall payments.
Financial Position
(Stated in thousands of Canadian dollars, except ratios) |
March 31, 2020 |
|
|
December 31, 2019 |
|
Working capital(1) |
|
226,947 |
|
|
|
201,696 |
|
Cash |
|
97,002 |
|
|
|
74,701 |
|
Long-term debt |
|
1,504,969 |
|
|
|
1,427,181 |
|
Total long-term financial
liabilities |
|
1,574,439 |
|
|
|
1,500,950 |
|
Total assets |
|
3,372,574 |
|
|
|
3,269,840 |
|
Long-term debt to long-term debt plus equity ratio |
|
0.49 |
|
|
|
0.48 |
|
(1) See “NON-GAAP MEASURES”.
Summary for the three months ended March 31,
2020:
- Revenue this quarter was $379 million which is 13% lower than
the first quarter of 2019. Our decreased revenue was primarily the
result of lower activity in our U.S. drilling and Canadian
completion and production services lines. Compared with the first
quarter of 2019, our activity for the quarter, as measured by
drilling rig utilization days, decreased by 30% in the U.S. while
Canada increased by 33% and international activity remained
consistent.
- Adjusted EBITDA (see “NON-GAAP MEASURES”) for the quarter was
$102 million, a decrease of $6 million from the previous year. Our
Adjusted EBITDA as a percentage of revenue was 27% this quarter,
compared with 25% in the comparative quarter. Adjusted EBITDA in
the quarter was negatively impacted by higher restructuring charges
partially offset by share-based compensation recoveries. See
discussion on share-based incentive compensation under “Other
Items” later in this release for additional details.
- Operating earnings (see “NON-GAAP MEASURES”) this quarter were
$23 million compared with $62 million in the first quarter of 2019.
Our operating earnings in the prior year quarter were positively
impacted by the US$24 million gain on asset disposal and US$4
million impairment reversal from the disposition of our Mexico
drilling equipment.
- General and administrative expenses this quarter were $20
million, $12 million lower than in 2019. Our lower general and
administrative costs in 2020 were primarily due to share-based
compensation recoveries and lower overhead costs as we continued to
align our cost structure to reflect reduced global activity.
- Restructuring charges were $10 million as compared to $6
million in 2019. Our restructuring charges were comprised of
severance costs of $9 million and $1 million of other costs
associated with the shutdown of our U.S. directional drilling
operations.
- Net finance charges were $28 million, a decrease of $4 million
compared with the first quarter of 2019, primarily due to reduced
interest expense related to retired debt, offset by the impact of
the weakening of the Canadian dollar on our U.S. dollar denominated
interest.
- Revenue per utilization day in the U.S. increased in the first
quarter of 2020 to US$23,878 from US$23,202 in the prior year
quarter. The increase was the result of higher revenues from idle
but contracted rigs, AlphaAutomation and turnkey drilling.
Operating costs on a per day basis increased to US$14,534 in the
first quarter of 2020 compared with US$14,368 in 2019. The increase
was mainly due to fixed operating overheads spread over fewer
drilling rig activity days. On a sequential basis, revenue per
utilization day, excluding revenue from turnkey and idle but
contracted rigs, decreased by US$355 due to lower fleet average day
rates, while operating costs per day increased by US$108 due to
fixed operating overheads spread over fewer drilling rig activity
days.
- In Canada, average revenue per utilization day for contract
drilling rigs was $21,444 compared with $22,977 in the first
quarter of 2019. The lower average revenue per utilization day in
the first quarter of 2020 was primarily because of lower spot
market day rates and fewer shortfall payments received. During the
quarter, we did not receive any shortfall revenue payments compared
with $3 million in the prior year comparative period. Average
operating costs per utilization day for drilling rigs in Canada
decreased to $14,239 compared with the prior year quarter of
$14,455. The decrease was mainly caused by smaller crew formations
from our rig mix and overhead costs spread over a higher number of
drilling rig utilization days.
- We realized revenue from international contract drilling of
US$40 million in the first quarter of 2020, as compared to US$36
million in the prior year period. Average revenue per utilization
day in our international contract drilling business increased 9% to
US$54,294 from the comparable prior year quarter, primarily due to
rate increases from the renewal and extension of drilling
contracts.
- Cash and funds provided by operations (see “NON-GAAP MEASURES”)
in the first quarter of 2020 were $75 million and $81 million,
respectively, compared to $41 million and $96 million in the prior
year comparative.
- Capital expenditures were $12 million in the first quarter, a
decrease of $60 million over the same period in 2019. Capital
spending for the quarter included $2 million for upgrade and
expansion capital and $10 million for the maintenance of existing
assets, infrastructure spending and intangibles.
STRATEGY
Precision’s strategic priorities for 2020 are as follows:
- Generate strong free cash flow and reduce debt by $100
million to $150 million in 2020 – In the first quarter of
2020, Precision generated $75 million of cash provided by
operations (see “NON-GAAP MEASURES”) and $6 million of cash
proceeds from the divestiture of non-core assets. Using cash on
hand and free cash flow generated in 2020, we reduced our debt
balance by $41 million through a combination of redemptions and
open market repurchases of our unsecured senior notes. We exited
the quarter with a cash balance of $97 million, compared to $75
million at December 31, 2019. We will place a high priority on
maintaining a strong liquidity position and further reduce debt
levels when visibility improves or cash on hand exceeds our
expectations.
- Demonstrate operational excellence in all aspects of
our business – In Canada, we continued at record level
market share and reported operating margins (revenue less operating
costs) of $7,205 per utilization day. In the U.S., we maintained
strong activity with a market share of over 7% and reported
operating margins of US$9,344 per utilization day. Internationally,
we maintained stable activity, averaging eight active drilling
rigs, and recorded average day rates of US$54,294.
- Leverage our Alpha Technology platform as a competitive
differentiator and source of financial returns – In the
first quarter of 2020, we had 38 field-deployed rigs equipped with
our AlphaAutomation platform and drilled approximately 200 wells.
We have partnered with a major U.S. customer to trial
AlphaAnalytics on all their Precision rigs and have a large
international oil company (IOC) customer in the U.S. standardizing
AlphaAutomation and several AlphaApps on all their Precision rigs.
Since 2017, we have drilled over 1,200 wells with AlphaAutomation
and currently have 15 AlphaApps either deployed or in development,
further allowing us to differentiate Precision’s High Performance,
High Value offering.
OUTLOOK
The energy industry faces a challenging outlook
as the abrupt demand destruction caused by the COVID-19 pandemic
has resulted in significant global oil supply imbalances and a
collapse in near-term crude oil prices. The oil market volatility
has created uncertainty for our customers and they have responded
by announcing material reductions to capital spending, which has
begun a rapid reduction in global oilfield service activity levels.
In a reduced-activity environment, we anticipate our customers will
further stress operational efficiencies, accelerating the industry
transition towards service providers with the highest performing
assets and competitive digital technology offerings. Pursuit of
predictable and repeatable results will further drive field
application of drilling automation processes to create additional
cost efficiencies and performance value for customers.
Precision continues to closely monitor
announcements of available government financial support and
economic stimulus programs. We are encouraged by the Canadian
federal government’s announced $1.7 billion well site abandonment
and rehabilitation program funding, which will support industry
activity levels and provide thousands of jobs throughout western
Canada. Precision believes our well servicing business is well
positioned to capture coming opportunities as a result of our
scale, operational performance and strong safety record.
Contracts
Year to date in 2020 we have entered into nine
term contracts. The following chart outlines the average number of
drilling rigs under contract by quarter as of April 29, 2020. For
those quarters ending after March 31, 2020, this chart represents
the minimum number of long-term contracts from which we will earn
revenue. We expect the actual number of contracted rigs to vary in
future periods as we sign additional contracts and certain
customers elect to pay contract cancellation fees.
|
|
Average for the quarter ended 2019 |
|
|
Average for the quarter ended 2020 |
|
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
Average rigs under term contract
as of April 29, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
56 |
|
|
|
52 |
|
|
|
49 |
|
|
|
41 |
|
|
|
41 |
|
|
|
33 |
|
|
|
25 |
|
|
|
21 |
|
Canada |
|
|
8 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
4 |
|
|
|
4 |
|
International |
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
|
9 |
|
|
|
8 |
|
|
|
8 |
|
|
|
6 |
|
|
|
6 |
|
Total |
|
|
72 |
|
|
|
65 |
|
|
|
63 |
|
|
|
55 |
|
|
|
54 |
|
|
|
46 |
|
|
|
35 |
|
|
|
31 |
|
The following chart outlines the average number
of drilling rigs that we had under contract for 2019 and the
average number of rigs we have under contract as of April 29,
2020.
|
|
Average for the year ended |
|
|
|
2019 |
|
|
2020 |
|
|
2021 |
|
Average rigs under term contract
as of April 29, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
|
49 |
|
|
|
30 |
|
|
|
6 |
|
Canada |
|
|
6 |
|
|
|
5 |
|
|
|
1 |
|
International |
|
|
9 |
|
|
|
7 |
|
|
|
6 |
|
Total |
|
|
64 |
|
|
|
42 |
|
|
|
13 |
|
In Canada, term contracted rigs normally
generate 250 utilization days per year because of the seasonal
nature of well site access. In most regions in the U.S. and
internationally, term contracts normally generate 365 utilization
days per year.
Drilling Activity
The following chart outlines the average number
of drilling rigs that we had working or moving by quarter for the
periods noted.
|
Average for the quarter ended 2019 |
|
|
2020 |
|
|
Mar. 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Mar. 31 |
|
Average Precision active rig
count: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
79 |
|
|
|
77 |
|
|
|
72 |
|
|
|
63 |
|
|
|
55 |
|
Canada |
|
48 |
|
|
|
27 |
|
|
|
42 |
|
|
|
43 |
|
|
|
63 |
|
International |
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
|
9 |
|
|
|
8 |
|
Total |
|
135 |
|
|
|
112 |
|
|
|
123 |
|
|
|
115 |
|
|
|
126 |
|
According to industry sources, as of April 29,
2020, the U.S. active land drilling rig count is down 54% from the
same point last year and the Canadian active land drilling rig
count is down 60%. To date in 2020, approximately 85% of the U.S.
industry’s active rigs and 61% of the Canadian industry’s active
rigs were drilling for oil targets, compared with 81% for the U.S.
and 59% for Canada at the same time last year.
Capital Spending
Capital spending in 2020 is expected to be $48
million and includes $36 million for sustaining, infrastructure and
intangibles and $12 million for upgrade and expansion. We expect
that the $48 million will be split $43 million in the Contract
Drilling Services segment, $4 million in the Completion and
Production Services segment and $1 million to the Corporate
segment.
SEGMENTED FINANCIAL RESULTS
Precision’s operations are reported in two
segments: Contract Drilling Services, which includes our drilling
rig, directional drilling, oilfield supply and manufacturing
divisions; and Completion and Production Services, which includes
our service rig, rental and camp and catering divisions.
|
Three months ended March 31, |
|
(Stated
in thousands of Canadian dollars) |
2020 |
|
|
2019 |
|
|
% Change |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Contract Drilling Services |
|
346,549 |
|
|
|
379,264 |
|
|
|
(8.6 |
) |
Completion and Production Services |
|
33,663 |
|
|
|
55,819 |
|
|
|
(39.7 |
) |
Inter-segment eliminations |
|
(728 |
) |
|
|
(1,040 |
) |
|
|
(30.0 |
) |
|
|
379,484 |
|
|
|
434,043 |
|
|
|
(12.6 |
) |
Adjusted EBITDA:(1) |
|
|
|
|
|
|
|
|
|
|
|
Contract Drilling Services |
|
110,733 |
|
|
|
118,455 |
|
|
|
(6.5 |
) |
Completion and Production Services |
|
3,235 |
|
|
|
10,518 |
|
|
|
(69.2 |
) |
Corporate and Other |
|
(12,064 |
) |
|
|
(21,006 |
) |
|
|
(42.6 |
) |
|
|
101,904 |
|
|
|
107,967 |
|
|
|
(5.6 |
) |
(1) See “NON-GAAP MEASURES”.
SEGMENT REVIEW OF CONTRACT DRILLING
SERVICES
|
Three months ended March 31, |
|
(Stated
in thousands of Canadian dollars, except where noted) |
2020 |
|
|
2019 |
|
|
% Change |
|
Revenue |
|
346,549 |
|
|
|
379,264 |
|
|
|
(8.6 |
) |
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
222,329 |
|
|
|
246,515 |
|
|
|
(9.8 |
) |
General and administrative |
|
8,770 |
|
|
|
11,248 |
|
|
|
(22.0 |
) |
Restructuring |
|
4,717 |
|
|
|
3,046 |
|
|
|
54.9 |
|
Adjusted EBITDA(1) |
|
110,733 |
|
|
|
118,455 |
|
|
|
(6.5 |
) |
Depreciation |
|
75,724 |
|
|
|
77,999 |
|
|
|
(2.9 |
) |
Gain on asset disposals |
|
(2,842 |
) |
|
|
(35,001 |
) |
|
|
(91.9 |
) |
Impairment reversal |
|
- |
|
|
|
(5,810 |
) |
|
|
(100.0 |
) |
Operating earnings(1) |
|
37,851 |
|
|
|
81,267 |
|
|
|
(53.4 |
) |
Operating earnings(1) as a percentage of revenue |
|
10.9 |
% |
|
|
21.4 |
% |
|
|
|
|
(1) See “NON-GAAP MEASURES”.
United
States onshore drilling statistics:(1) |
2020 |
|
|
2019 |
|
|
Precision |
|
|
Industry(2) |
|
|
Precision |
|
|
Industry(2) |
|
Average number of active land
rigs for quarters ended: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
55 |
|
|
|
764 |
|
|
|
79 |
|
|
|
1,023 |
|
(1) United States lower 48 operations only.(2)
Baker Hughes rig counts.
Canadian onshore drilling statistics:(1) |
2020 |
|
|
2019 |
|
|
Precision |
|
|
Industry(2) |
|
|
Precision |
|
|
Industry(2) |
|
Average number of active land
rigs for quarters ended: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
63 |
|
|
|
196 |
|
|
|
48 |
|
|
|
183 |
|
(1) Canadian operations only.(2) Baker Hughes
rig counts.
SEGMENT REVIEW OF COMPLETION AND
PRODUCTION SERVICES
|
Three months ended March 31, |
|
(Stated
in thousands of Canadian dollars, except where noted) |
2020 |
|
|
2019 |
|
|
% Change |
|
Revenue |
|
33,663 |
|
|
|
55,819 |
|
|
|
(39.7 |
) |
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
26,626 |
|
|
|
43,133 |
|
|
|
(38.3 |
) |
General and administrative |
|
1,479 |
|
|
|
1,711 |
|
|
|
(13.6 |
) |
Restructuring |
|
2,323 |
|
|
|
457 |
|
|
|
408.3 |
|
Adjusted EBITDA(1) |
|
3,235 |
|
|
|
10,518 |
|
|
|
(69.2 |
) |
Depreciation |
|
4,283 |
|
|
|
4,949 |
|
|
|
(13.5 |
) |
Gain on asset disposals |
|
(739 |
) |
|
|
(56 |
) |
|
|
1,219.6 |
|
Operating earnings (loss)(1) |
|
(309 |
) |
|
|
5,625 |
|
|
|
(105.5 |
) |
Operating earnings (loss)(1) as a percentage of revenue |
|
(0.9 |
)% |
|
|
10.1 |
% |
|
|
|
|
Well servicing
statistics: |
|
|
|
|
|
|
|
|
|
|
|
Number of service rigs (end of period) |
|
123 |
|
|
|
135 |
|
|
|
(8.9 |
) |
Service rig operating hours |
|
34,365 |
|
|
|
42,898 |
|
|
|
(19.9 |
) |
Service rig operating hour utilization |
|
31 |
% |
|
|
35 |
% |
|
|
|
|
(1) See “NON-GAAP MEASURES”.
SEGMENT REVIEW OF CORPORATE AND
OTHER
Our Corporate and Other segment provides support
functions to our operating segments. The Corporate and Other
segment had negative Adjusted EBITDA (see “NON-GAAP MEASURES”) of
$12 million, a $9 million decrease compared with the first quarter
of 2019 primarily due to share-based compensation recoveries.
Consistent with 2019, we incurred $3 million of restructuring
charges as we continued to align our cost structure.
OTHER ITEMS
Share-based Incentive Compensation
Plans
We have several cash and equity-settled
share-based incentive plans for non-management directors, officers,
and other eligible employees. Our accounting policies for each
share-based incentive plan can be found in our 2019 Annual
Report.
A summary of amounts expensed under these plans
during the reporting periods are as follows:
|
Three months ended March 31, |
|
(Stated in thousands of Canadian dollars) |
2020 |
|
|
2019 |
|
Cash settled share-based
incentive plans |
|
(6,393 |
) |
|
|
5,804 |
|
Equity settled share-based
incentive plans: |
|
|
|
|
|
|
|
Executive PSU |
|
2,735 |
|
|
|
2,372 |
|
Stock option plan |
|
386 |
|
|
|
731 |
|
Total
share-based incentive compensation plan expense |
|
(3,272 |
) |
|
|
8,907 |
|
|
|
|
|
|
|
|
|
Allocated: |
|
|
|
|
|
|
|
Operating |
|
(973 |
) |
|
|
2,429 |
|
General and Administrative |
|
(2,299 |
) |
|
|
6,478 |
|
|
|
(3,272 |
) |
|
|
8,907 |
|
Cash settled shared-based compensation expense
decreased by $12 million in the current quarter primarily due to
our decreasing share price. Our total equity settled share-based
compensation expense for the first quarter of 2020 was $3 million,
consistent with the prior year period.
Finance Charges
Net finance charges were $28 million, a decrease
of $4 million compared with the first quarter of 2019, primarily
due to reduced interest expense related to retired debt, offset by
the impact of the weakening of the Canadian dollar on our U.S.
dollar denominated interest.
Interest charges on our U.S. denominated
long-term debt in the first quarter of 2020 were US$19 million ($26
million) as compared with US$22 million ($29 million) in 2019.
Income Tax
Income tax recovery for the quarter was $2
million compared with an expense of $8 million in the same quarter
in 2019. The higher tax expense in the first quarter of 2019 was
the result of higher before income tax earnings primarily from the
gain on disposition of our Mexico-based rigs.
LIQUIDITY AND CAPITAL
RESOURCES
Liquidity
Amount |
|
Availability |
|
Used for |
|
Maturity |
Senior credit facility (secured) |
|
|
|
|
|
|
US$500 million (extendible, revolving term credit facility with
US$300 million accordion feature) |
|
Undrawn, except US$38 million in outstanding letters of credit |
|
General corporate purposes |
|
November 21, 2023 |
Operating facilities (secured) |
|
|
|
|
|
|
$40 million |
|
Undrawn, except $10 million in outstanding letters of credit |
|
Letters of credit and general corporate purposes |
|
|
US$15 million |
|
Undrawn |
|
Short term working capital requirements |
|
|
Demand letter of credit facility (secured) |
|
|
|
|
|
|
US$30 million |
|
Undrawn, except US$2 million in outstanding letters of credit |
|
Letters of credit |
|
|
Unsecured senior notes (unsecured) |
|
|
|
|
|
|
US$66 million – 6.5% |
|
Fully drawn |
|
Capital expenditures and general corporate purposes |
|
December 15, 2021 |
US$345 million – 7.75% |
|
Fully drawn |
|
Debt redemption and repurchases |
|
December 15, 2023 |
US$303 million – 5.25% |
|
Fully drawn |
|
Capital expenditures and general corporate purposes |
|
November 15, 2024 |
US$368 million – 7.125% |
|
Fully drawn |
|
Debt redemption and repurchases |
|
January 15, 2026 |
As at March 31, 2020, we had US$1,081 million
($1,522 million) outstanding under our unsecured senior notes as
compared with US$1,113 million ($1,445 million) at December 31,
2019. During the first quarter of 2020, Precision redeemed US$25
million principal amount of its 6.50% unsecured senior notes due
2021 and repurchased and cancelled US$2 million of the 7.125%
unsecured senior notes due 2026 and US$5 million of the 5.25%
unsecured senior notes due 2024. The weakening of the Canadian
dollar resulted in $118 million of additional stated debt such that
at March 31, 2020, we had $1,522 million of outstanding unsecured
senior notes and $17 million in unamortized debt issue costs.
The current blended cash interest cost of our
debt is approximately 6.8%.
Covenants
Following is a listing of our applicable Senior
Credit Facility financial covenants and the calculations as at
March 31, 2020:
|
Covenant |
|
At March 31, 2020 |
|
Senior Credit
Facility |
|
|
|
|
|
Consolidated senior debt to consolidated covenant EBITDA(1) |
< 2.50 |
|
|
0.00 |
|
Consolidated covenant EBITDA to consolidated interest
expense(1) |
> 2.50 |
|
|
3.43 |
|
(1) For purposes of calculating the leverage ratio consolidated
senior debt only includes secured indebtedness.
At March 31, 2020, we were in compliance with
the covenants of our Senior Credit Facility.
Senior Credit Facility
On April 9, 2020 we agreed with the lenders of
our Senior Credit Facility to reduce the consolidated Covenant
EBITDA to consolidated interest expense coverage ratio for the most
recent four consecutive quarters from the greater than or equal to
2.5:1 to 2.0:1 for the period ending September 30, 2020, 1.75:1 for
the period ending December 31, 2020, 1.25:1 for the periods ending
March 31, June 30 and September 30, 2021, 1.75:1, for the period
ending December 31, 2021, 2.0:1 for the period ending March 31,
2022 and 2.5:1 for periods ending thereafter.
During the covenant relief period, Precision’s
distributions in the form of dividends, distributions and share
repurchases are restricted to a maximum of US$15 million in 2020
and US$25 million in each of 2021 and 2022, subject to a pro forma
senior net leverage ratio (as defined in the credit agreement) of
less than or equal to 1.75:1.
In addition, during 2021, the North American and
acceptable secured foreign assets must directly account for at
least 65% of consolidated Covenant EBITDA calculated quarterly on a
rolling twelve-month basis, increasing to 70% thereafter. Precision
also has the option to voluntarily terminate the covenant relief
period prior to its March 31, 2022 end date.
The Senior Credit Facility limits the redemption
and repurchase of junior debt subject to a pro forma senior net
leverage covenant test of less than or equal to 1.75:1.
Impact of foreign exchange
rates
As summarized below, for the three months ended
March 31, 2020, the Canadian dollar weakened by 1% from the
comparable 2019 period and 8% from December 31, 2019. The weakening
resulted in higher translated U.S. denominated revenue and costs
during the quarter and net monetary assets at March 31, 2020.
|
Three months ended March
31, |
|
|
As at December 31, |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
Canada-U.S. foreign
exchange rates |
|
|
|
|
|
|
|
|
|
|
|
Average |
|
1.34 |
|
|
|
1.33 |
|
|
|
— |
|
Closing |
|
1.41 |
|
|
|
1.33 |
|
|
|
1.30 |
|
Average shares outstanding
The following table reconciles the weighted
average shares outstanding used in computing basic and diluted net
earnings (loss) per share:
|
Three months ended March 31, |
|
(Stated in thousands) |
2020 |
|
|
2019 |
|
Weighted average shares
outstanding – basic |
|
275,427 |
|
|
|
293,783 |
|
Effect
of stock options and other equity compensation plans |
|
— |
|
|
|
6,419 |
|
Weighted average shares outstanding – diluted |
|
275,427 |
|
|
|
300,202 |
|
NON-GAAP MEASURES
In this release we reference non-GAAP (Generally
Accepted Accounting Principles) measures. Adjusted EBITDA, Covenant
EBITDA, Operating Earnings (Loss), Funds Provided by (Used in)
Operations and Working Capital are terms used by us to assess
performance as we believe they provide useful supplemental
information to investors. These terms do not have standardized
meanings prescribed under International Financial Reporting
Standards (IFRS) and may not be comparable to
similar measures used by other companies.
Adjusted EBITDA
We believe that Adjusted EBITDA (earnings before
income taxes, gain on repurchase of unsecured senior notes, finance
charges, foreign exchange, impairment reversal, gain on assets
disposals and depreciation and amortization), as reported in the
Interim Consolidated Statement of Net Earnings (Loss), is a useful
measure, because it gives an indication of the results from our
principal business activities prior to consideration of how our
activities are financed and the impact of foreign exchange,
taxation and depreciation and amortization charges.
Covenant EBITDA
Covenant EBITDA, as defined in our Senior Credit
Facility agreement, is used in determining the Corporation’s
compliance with its covenants. Covenant EBITDA differs from
Adjusted EBITDA by the exclusion of bad debt expense, restructuring
costs, certain foreign exchange amounts and the deduction of cash
lease payments incurred after December 31, 2018.
Operating Earnings (Loss)
We believe that operating earnings (loss) is a
useful measure because it provides an indication of the results of
our principal business activities before consideration of how those
activities are financed and the impact of foreign exchange and
taxation. Operating earnings is calculated as follows:
|
Three months ended March 31, |
|
(Stated
in thousands of Canadian dollars) |
2020 |
|
|
2019 |
|
Revenue |
|
379,484 |
|
|
|
434,043 |
|
Expenses: |
|
|
|
|
|
|
|
Operating |
|
248,227 |
|
|
|
288,608 |
|
General and administrative |
|
19,535 |
|
|
|
31,030 |
|
Restructuring |
|
9,818 |
|
|
|
6,438 |
|
Depreciation and
amortization |
|
82,914 |
|
|
|
86,753 |
|
Gain on asset disposals |
|
(3,609 |
) |
|
|
(35,050 |
) |
Impairment reversal |
|
— |
|
|
|
(5,810 |
) |
Operating
earnings |
|
22,599 |
|
|
|
62,074 |
|
Foreign exchange |
|
2,691 |
|
|
|
(2,123 |
) |
Finance charges |
|
27,580 |
|
|
|
31,303 |
|
Gain on
repurchase of unsecured senior notes |
|
(850 |
) |
|
|
(313 |
) |
Earnings (loss) before income taxes |
|
(6,822 |
) |
|
|
33,207 |
|
Funds Provided By (Used In)
Operations
We believe that funds provided by (used in)
operations, as reported in the Interim Consolidated Statements of
Cash Flow, is a useful measure because it provides an indication of
the funds our principal business activities generate prior to
consideration of working capital, which is primarily made up of
highly liquid balances.
Working Capital
We define working capital as current assets less
current liabilities as reported on the Interim Consolidated
Statement of Financial Position.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements contained in this release,
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 strategic priorities for 2020;
- our capital expenditure plans for 2020;
- anticipated activity levels in 2020 and our scheduled
infrastructure projects;
- anticipated demand for Tier 1 rigs;
- the average number of term contracts in place for 2020 and
2021;
- anticipated cash outflows, savings and liquidity;
and
- our future debt reduction plans.
These forward-looking information and statements
are based on certain assumptions and analysis made by Precision in
light of our experience and our perception of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. These include,
among other things:
- the fluctuation in oil prices may pressure customers into
reducing or limiting their drilling budgets;
- the success of our response to the COVID-19 global
pandemic;
- the status of current negotiations with our customers and
vendors;
- customer focus on safety performance;
- existing term contracts are neither renewed nor terminated
prematurely;
- our ability to deliver rigs to customers on a timely basis;
and
- the general stability of the economic and political
environments in the jurisdictions where we operate.
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 level of oil and natural gas exploration
and development activities;
- fluctuations in the demand for contract drilling, directional
drilling, well servicing and ancillary oilfield services;
- our customers’ inability to obtain adequate credit or financing
to support their drilling and production activity;
- the success of our response to the COVID-19 global
pandemic;
- changes in drilling and well servicing technology, which could
reduce demand for certain rigs or put us at a competitive
advantage;
- shortages, delays and interruptions in the delivery of
equipment supplies and other key inputs;
- liquidity of the capital markets to fund customer drilling
programs;
- availability of cash flow, debt and equity sources to fund our
capital and operating requirements, as needed;
- the impact of weather and seasonal conditions on operations and
facilities;
- competitive operating risks inherent in contract drilling,
directional drilling, well servicing and ancillary oilfield
services;
- ability to improve our rig technology to improve drilling
efficiency;
- general economic, market or business conditions;
- the availability of qualified personnel and management;
- a decline in our safety performance which could result in lower
demand for our services;
- changes in laws or regulations, including 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,
2019, 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
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.
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Stated in thousands of Canadian dollars) |
|
March 31,
2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
97,002 |
|
|
$ |
74,701 |
|
Accounts receivable |
|
|
314,363 |
|
|
|
310,204 |
|
Inventory |
|
|
31,754 |
|
|
|
31,718 |
|
Income tax recoverable |
|
|
1,238 |
|
|
|
1,142 |
|
Total current assets |
|
|
444,357 |
|
|
|
417,765 |
|
Non-current assets: |
|
|
|
|
|
|
|
|
Deferred tax assets |
|
|
4,260 |
|
|
|
4,724 |
|
Right of use assets |
|
|
68,266 |
|
|
|
66,142 |
|
Property, plant and equipment |
|
|
2,825,129 |
|
|
|
2,749,463 |
|
Intangibles |
|
|
30,562 |
|
|
|
31,746 |
|
Total non-current assets |
|
|
2,928,217 |
|
|
|
2,852,075 |
|
Total
assets |
|
$ |
3,372,574 |
|
|
$ |
3,269,840 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
199,137 |
|
|
$ |
199,478 |
|
Income taxes payable |
|
|
5,081 |
|
|
|
4,142 |
|
Current portion of lease obligation |
|
|
13,192 |
|
|
|
12,449 |
|
Total current liabilities |
|
|
217,410 |
|
|
|
216,069 |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
1,769 |
|
|
|
8,830 |
|
Provisions and other |
|
|
10,862 |
|
|
|
9,959 |
|
Lease obligation |
|
|
56,839 |
|
|
|
54,980 |
|
Long-term debt |
|
|
1,504,969 |
|
|
|
1,427,181 |
|
Deferred tax liabilities |
|
|
23,339 |
|
|
|
25,389 |
|
Total non-current
liabilities |
|
|
1,597,778 |
|
|
|
1,526,339 |
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Shareholders’ capital |
|
|
2,291,134 |
|
|
|
2,296,378 |
|
Contributed surplus |
|
|
67,878 |
|
|
|
66,255 |
|
Deficit |
|
|
(974,733 |
) |
|
|
(969,456 |
) |
Accumulated other comprehensive income |
|
|
173,107 |
|
|
|
134,255 |
|
Total
shareholders’ equity |
|
|
1,557,386 |
|
|
|
1,527,432 |
|
Total
liabilities and shareholders’ equity |
|
$ |
3,372,574 |
|
|
$ |
3,269,840 |
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)
|
|
Three Months Ended March 31, |
|
(Stated
in thousands of Canadian dollars, except per share amounts) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
379,484 |
|
|
$ |
434,043 |
|
Expenses: |
|
|
|
|
|
|
|
|
Operating |
|
|
248,227 |
|
|
|
288,608 |
|
General and administrative |
|
|
19,535 |
|
|
|
31,030 |
|
Restructuring |
|
|
9,818 |
|
|
|
6,438 |
|
Earnings before income taxes,
gain on repurchase of unsecured senior notes, finance charges,
foreign exchange, impairment reversal, gain on asset disposals and
depreciation and amortization |
|
|
101,904 |
|
|
|
107,967 |
|
Depreciation and
amortization |
|
|
82,914 |
|
|
|
86,753 |
|
Gain on asset disposals |
|
|
(3,609 |
) |
|
|
(35,050 |
) |
Impairment reversal |
|
|
— |
|
|
|
(5,810 |
) |
Foreign exchange |
|
|
2,691 |
|
|
|
(2,123 |
) |
Finance charges |
|
|
27,580 |
|
|
|
31,303 |
|
Gain on
repurchase of unsecured senior notes |
|
|
(850 |
) |
|
|
(313 |
) |
Earnings (loss) before income
taxes |
|
|
(6,822 |
) |
|
|
33,207 |
|
Income taxes: |
|
|
|
|
|
|
|
|
Current |
|
|
1,059 |
|
|
|
1,610 |
|
Deferred |
|
|
(2,604 |
) |
|
|
6,583 |
|
|
|
|
(1,545 |
) |
|
|
8,193 |
|
Net
earnings (loss) |
|
$ |
(5,277 |
) |
|
$ |
25,014 |
|
Net earnings (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.02 |
) |
|
$ |
0.09 |
|
Diluted |
|
$ |
(0.02 |
) |
|
$ |
0.08 |
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
|
Three Months Ended March 31, |
|
(Stated
in thousands of Canadian dollars) |
|
2020 |
|
|
2019 |
|
Net earnings (loss) |
|
$ |
(5,277 |
) |
|
$ |
25,014 |
|
Unrealized gain (loss) on translation of assets and
liabilities of operations denominated in foreign currency |
|
|
157,008 |
|
|
|
(48,518 |
) |
Foreign exchange gain (loss) on net investment hedge
with U.S. denominated debt, net of tax |
|
|
(118,156 |
) |
|
|
39,014 |
|
Comprehensive income |
|
$ |
33,575 |
|
|
$ |
15,510 |
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
Three Months Ended March 31, |
|
(Stated
in thousands of Canadian dollars) |
|
2020 |
|
|
2019 |
|
Cash provided by (used
in): |
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
Net earnings
(loss) |
|
$ |
(5,277 |
) |
|
$ |
25,014 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
Long-term compensation plans |
|
|
(703 |
) |
|
|
7,312 |
|
Depreciation and amortization |
|
|
82,914 |
|
|
|
86,753 |
|
Gain on asset disposals |
|
|
(3,609 |
) |
|
|
(35,050 |
) |
Impairment reversal |
|
|
— |
|
|
|
(5,810 |
) |
Foreign exchange |
|
|
2,872 |
|
|
|
(2,238 |
) |
Finance charges |
|
|
27,580 |
|
|
|
31,303 |
|
Income taxes |
|
|
(1,545 |
) |
|
|
8,193 |
|
Other |
|
|
60 |
|
|
|
122 |
|
Gain on repurchase of unsecured senior notes |
|
|
(850 |
) |
|
|
(313 |
) |
Income taxes paid |
|
|
(820 |
) |
|
|
(337 |
) |
Income taxes recovered |
|
|
— |
|
|
|
1,071 |
|
Interest paid |
|
|
(19,495 |
) |
|
|
(20,233 |
) |
Interest received |
|
|
190 |
|
|
|
206 |
|
Funds provided by
operations |
|
|
81,317 |
|
|
|
95,993 |
|
Changes
in non-cash working capital balances |
|
|
(6,364 |
) |
|
|
(55,406 |
) |
|
|
|
74,953 |
|
|
|
40,587 |
|
Investments: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(11,485 |
) |
|
|
(70,962 |
) |
Purchase of intangibles |
|
|
(57 |
) |
|
|
(438 |
) |
Proceeds on sale of property, plant and equipment |
|
|
5,690 |
|
|
|
57,877 |
|
Changes in non-cash working capital balances |
|
|
(3,526 |
) |
|
|
(3,263 |
) |
|
|
|
(9,378 |
) |
|
|
(16,786 |
) |
Financing: |
|
|
|
|
|
|
|
|
Repurchase of unsecured senior notes |
|
|
(40,554 |
) |
|
|
(16,672 |
) |
Share repurchase |
|
|
(5,244 |
) |
|
|
— |
|
Lease payments |
|
|
(1,728 |
) |
|
|
(1,672 |
) |
Debt amendment fees |
|
|
(21 |
) |
|
|
— |
|
|
|
|
(47,547 |
) |
|
|
(18,344 |
) |
Effect
of exchange rate changes on cash and cash equivalents |
|
|
4,273 |
|
|
|
(1,053 |
) |
Increase in cash and cash
equivalents |
|
|
22,301 |
|
|
|
4,404 |
|
Cash
and cash equivalents, beginning of period |
|
|
74,701 |
|
|
|
96,626 |
|
Cash
and cash equivalents, end of period |
|
$ |
97,002 |
|
|
$ |
101,030 |
|
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(Stated
in thousands of Canadian dollars) |
|
Shareholders’capital |
|
|
Contributedsurplus |
|
|
Accumulatedothercomprehensiveincome |
|
|
Deficit |
|
|
Totalequity |
|
Balance at January 1,
2020 |
|
$ |
2,296,378 |
|
|
$ |
66,255 |
|
|
$ |
134,255 |
|
|
$ |
(969,456 |
) |
|
$ |
1,527,432 |
|
Net loss for the period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,277 |
) |
|
|
(5,277 |
) |
Other comprehensive income for
the period |
|
|
— |
|
|
|
— |
|
|
|
38,852 |
|
|
|
— |
|
|
|
38,852 |
|
Share repurchases |
|
|
(5,244 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,244 |
) |
Share-based compensation
reclassification |
|
|
— |
|
|
|
(1,498 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,498 |
) |
Share-based compensation expense |
|
|
— |
|
|
|
3,121 |
|
|
|
— |
|
|
|
— |
|
|
|
3,121 |
|
Balance at March 31, 2020 |
|
$ |
2,291,134 |
|
|
$ |
67,878 |
|
|
$ |
173,107 |
|
|
$ |
(974,733 |
) |
|
$ |
1,557,386 |
|
(Stated
in thousands of Canadian dollars) |
|
Shareholders’capital |
|
|
Contributedsurplus |
|
|
Accumulatedothercomprehensiveincome |
|
|
Deficit |
|
|
Totalequity |
|
Balance at January 1,
2019 |
|
$ |
2,322,280 |
|
|
$ |
52,332 |
|
|
$ |
162,014 |
|
|
$ |
(978,874 |
) |
|
$ |
1,557,752 |
|
Lease transition
adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,800 |
|
|
|
2,800 |
|
Net earnings for the
period |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,014 |
|
|
|
25,014 |
|
Other comprehensive loss for
the period |
|
|
— |
|
|
|
— |
|
|
|
(9,504 |
) |
|
|
— |
|
|
|
(9,504 |
) |
Share-based compensation expense |
|
|
— |
|
|
|
3,103 |
|
|
|
— |
|
|
|
— |
|
|
|
3,103 |
|
Balance
at March 31, 2019 |
|
$ |
2,322,280 |
|
|
$ |
55,435 |
|
|
$ |
152,510 |
|
|
$ |
(951,060 |
) |
|
$ |
1,579,165 |
|
FIRST QUARTER 2020 EARNINGS CONFERENCE
CALL AND WEBCAST
Precision Drilling Corporation has scheduled a conference call
and webcast to begin promptly at 12:00 noon MT (2:00 p.m. ET) on
Thursday, April 30, 2020.
The conference call dial in numbers are
1-844-515-9176 or 614-999-9312.
A live webcast of the conference call will be
accessible on Precision’s website at www.precisiondrilling.com by
selecting “Investor Relations”, then “Webcasts &
Presentations”. Shortly after the live webcast, an archived version
will be available for approximately 60 days.
An archived version of the webcast will be
available for approximately 60 days. An archived recording of the
conference call will be available approximately one hour after the
completion of the call until May 6, 2020 by dialing 855-859-2056 or
404-537-3406, passcode 7087264.
About Precision
Precision 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 innovative drilling solutions to
deliver efficient, predictable and repeatable results through
service differentiation. Precision also offers well service rigs,
camps, rental equipment and directional drilling services 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, Senior Vice President and Chief
Financial Officer713.435.6100
Dustin Honing, Manager, Investor Relations and
Corporate Development403.716.4500
800, 525 - 8th Avenue S.W.Calgary, Alberta,
Canada T2P 1G1Website: www.precisiondrilling.com
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