Precision Drilling Corporation Announces 2014 Capital Expenditure
Plan
CALGARY, ALBERTA--(Marketwired - Dec 10, 2013) -
(Canadian dollars, unless otherwise indicated)
Precision Drilling Corporation (TSX:PD) (NYSE:PDS) ("Precision"
or the "Corporation") announced today that planned capital
expenditures for 2014 are $504 million.
2014 Capital Plan and
Update on 2013 Capital Plan
The 2014 capital expenditure plan includes $255 million for
expansion capital, $192 million for sustaining and infrastructure
expenditures, and $57 million to upgrade existing rigs. We expect
that the $504 million will be split $468 million in the Contract
Drilling segment and $36 million in the Completion and Production
Services segment.
Precision's expansion capital plan includes five new build
drilling rigs and the completion and deployment of six previously
announced new build drilling rigs. The new rigs announced today
include four new build drilling rigs in Canada; one Super Single
for heavy oil development drilling, and three additional ST-1500
rigs for northern gas and gas liquids drilling. The plan also
includes one additional ST-1500, which will only be completed once
a firm customer contract is secured. The previously announced new
build drilling rigs include: two ST-1500 rigs for West Texas
deployment in the first and second quarters of 2014; two ST-1500
rigs to be deployed in early 2014 for gas and gas liquids drilling
in Northern Canada; and two ST-3000 rigs expected to be deployed in
Kuwait late in the second quarter. Additional expansion capital is
allocated to equipment for Completion and Production Services and
long-lead items.
The 2014 capital plan includes the completion of the rig
upgrades previously announced in 2013 and six to ten additional rig
upgrades in 2014.
Precision's sustaining and infrastructure capital plan is based
upon currently anticipated activity levels for 2014 and scheduled
infrastructure projects, including the Nisku, Alberta combined
technical and operations support centre, additional regional
support facilities and corporate systems. The Nisku centre
consolidates Precision's existing Canadian operations and
technology support centres and will contain a new employee training
centre complete with a fully functioning training rig equipped with
the latest drilling technology. The Nisku facility is expected to
support Canadian operations for several decades, provide increased
capacity and efficiency, and ensure that we continue to meet the
needs of our customers with highly skilled and well trained field
personnel. The portion of the 2014 budget allocated to completing
this facility is approximately $30 million.
We anticipate 2013 capital expenditures to be approximately $561
million, a $48 million decrease from our previous guidance. Carry
forward capital expenditures of $183 million have been included in
the 2014 capital expenditure guidance of $504 million.
Operational Update and
Near Term Outlook
Precision's active drilling rig count in both Canada and the
United States has been increasing throughout the fourth quarter. As
of today, Precision has 109 active drilling rigs in Canada, 93 in
the United States and 12 in international locations.
We expect Precision's Canadian drilling rig count to remain at
current levels until industry activity breaks for the holiday
season before returning to higher activity after the first of the
year. We expect our first quarter peak activity levels to be
similar to winter 2013. In the United States, we expect recent
market share gains to be maintained in the near term and activity
levels to increase or decrease with industry activity.
Precision currently has 200 Tier 1 rigs and will have 211 Tier 1
drilling rigs upon delivery of all announced new builds, up from 93
Tier 1 rigs in 2009. To date in 2013, we have completed and
delivered eight new build drilling rigs.
Quote from Precision's
CEO
"Precision continues to enhance its ability to deliver High
Performance, High Value services. Our positioning in the North
American Tier 1 market has never been stronger. We remain focused
on potential LNG-related drilling as we now have signed contracts
or firm customer commitments for five new build Super Triple
drilling rigs for drilling programs supported by foreign capital
tied to LNG. While the full potential of the Canadian LNG export
opportunity has hurdles to pass, we are encouraged by the interest
in our services highlighted by these new builds, which positions us
for further growth supporting these projects. These rigs are in
addition to the eight new build Super Triple drilling rigs we have
deployed to the Canadian market in the past two years."
"Our 2014 capital expenditure plan demonstrates how Precision
prudently deploys capital toward projects generating attractive
returns. Our footprint and customer base affords us numerous
opportunities to invest capital and our focus remains on selecting
the best projects producing returns on the capital we deploy and
returning value to shareholders in the form of share price
appreciation and dividends."
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: guidance on our 2013 and 2014
capital plans including the level, timing and planned uses of
capital expenditures, the deployment and purpose of new build rigs,
the allocation of additional expansion capital to equipment for
Completion and Production services and long-lead items to meet
additional expected new build and rig upgrade demand in 2014, the
amount and timing of planned sustaining and infrastructure capital
based upon currently anticipated activity levels for 2014 and
completion of scheduled infrastructure projects, that Precision's
Canadian drilling rig count is expected to remain at current levels
until industry activity breaks for the holiday season before
returning to higher activity after the first of the year, that our
first quarter peak activity levels are expected to be similar to
winter 2013 and that in the United States, we expect recent market
share gains to be maintained in the near term and activity levels
to increase or decrease with industry activity.
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, realizing contracts from firm customer
commitments; 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 oil and gas industry. Precision provides
customers with access to an extensive fleet of contract drilling
rigs, directional drilling services, well service and snubbing
rigs, coil tubing services, camps, rental equipment, and wastewater
treatment units 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".
Precision Drilling CorporationCarey FordVice President, Finance
and Investor Relations403.716.4575403.716.4755Precision Drilling
Corporation800, 525 - 8th Avenue S.W.Calgary, Alberta, Canada T2P
1G1www.precisiondrilling.com
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