Precision Drilling Corporation Announces New International Contract Awards and
Update to 2014 Capital Expenditure Plan
CALGARY, ALBERTA -- (Marketwired) -- 03/24/14 -- (Canadian dollars,
unless otherwise indicated)
Precision Drilling Corporation (TSX: PD)(NYSE: PDS) ("Precision" or
the "Corporation") announced today new international contract awards
and an update on its 2014 capital expenditure plan, which is now $634
International Contract Award Summary
In the Middle East, we have signed a multi-year contract for a Super
Triple new build ST-2000 drilling rig that will be delivered late in
the fourth quarter of this year. In Mexico, we have signed multi-year
contracts for a total of six drilling rigs, including re-contracting
three existing 3,000 horsepower rigs working for a major integrated
project management (IPM) service provider and contracting, as part of
a consortium, for three 1,000 horsepower rigs.
2014 Capital Plan Update
The 2014 capital expenditure plan of $634 million is an increase of
$119 million from the plan announced during our February 14, 2014
fourth quarter and year end press release.
The updated 2014 plan includes $320 million for expansion capital,
$195 million for sustaining and infrastructure expenditures, and $119
million to upgrade existing rigs. We expect that the $634 million
will be split $597 million in the Contract Drilling segment and $37
million in the Completion and Production Services segment.
Precision's expansion capital plan includes the completion and
deployment of twelve new build drilling rigs, eleven of which were
previously announced. In 2014, we now plan to deliver six new build
rigs to Canada, two new build rigs to the United States, three new
build rigs to international locations and one new build rig that will
only be completed once a firm customer contract is secured.
Additional expansion capital is allocated to equipment for Completion
and Production services and long-lead items.
The plan includes the cost to complete four rig upgrades previously
announced in 2013 and 11 to 15 additional rig upgrades in 2014. The
increase in the expected number of rig upgrades this year is driven
by strengthening customer demand for contracted rig upgrades in both
North America and internationally.
Sustaining and infrastructure expenditures are based on currently
anticipated activity levels, and include the cost to consolidate and
upgrade our operations facility in Nisku, Alberta.
Quote from Precision's CEO
"Today's international contract award announcements demonstrate the
effectiveness of our High Performance, High Value strategy in our key
international markets. These new contracts will grow our share of the
technically challenging portion of the market and create scale
benefits in our core geographic operating regions."
"The interest in contracted upgrades in all of our markets also is
encouraging with greater customer demand in North America from areas
such as the Permian in West Texas and from LNG related activity in
deep basins in Canada potentially leading to contracted new builds
later in the year."
"We will continue to prudently deploy capital toward projects
generating attractive returns. Our footprint and customer base
affords us excellent 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
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
In particular, forward-looking information and statements include,
but are not limited to, the level, timing and planned uses of capital
expenditures, plans regarding the completion and delivery of
additional new build drilling rigs and rig upgrades, and the
potential growth in market share.
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 including the
performance of contracts in accordance with their terms, the delivery
of contracted rigs on a timely basis, strengthening customer demand
translating into the need for additional new build rigs and upgrades,
Precision's expectations regarding its customers' capital budgets and
geographical areas of focus and the general economic, regulatory and
political stability of the foreign jurisdictions in which Precision
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; 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.
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 Corporation
Vice President, Finance and Investor Relations
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