Precision
Drilling’s (NYSE:PDS) growth has stalled since 2012 but the company appears to
be on the verge of a turnaround, which is evident in the improving drilling rig
revenues per utilization day and active rig count. More importantly, the
business is in a good position to capitalize on favorable secular trends coming
from LNG development at the west coast.
Calgary based Precision
Drilling (PDS) is Canada's
leading oilfield services firm which provides contract drilling, well servicing
and strategic support services to its customers. The company was formed as a
private drilling contractor in the early 1950s and has grown on the back of
fleet expansion and acquisitions, most notably, the $2 billion acquisition of
Grey Wolf Inc in 2008. The business owns a large fleet of horizontally capable
drilling rigs.
Earlier in December, the Alberta Investment Management (AIM) Company, which
owned 56 million shares of Precision Drilling, sold its
entire stake in the Canadian driller in an overnight transaction. This came
after the company announced disappointing quarterly results in late November.
As a result, Precision Drilling's shares dropped by more than 9% on December 5.
This was largely due to the overreaction by the shareholders as the company's
future outlook is still bright.
Business Segments
Precision
Drilling has two business segments; contract drilling services and completion
services.
Under contract drilling, Precision
Drilling operates its rigs and provides onshore well drilling services to
E&P firms, mainly in Canada and the United States. Until the end of 2012,
Precision Drilling had 321 land drilling rings, including 186 rigs in Canada,
127 in the United States, 5 in Mexico and 3 in Saudi Arabia. In a recent
presentation held earlier in December, Precision Drilling's management pointed
out that their onshore drilling fleet has now grown to 334 drilling rigs,
including 206 …. Read full article at Seeking Alpha
