Precision Drilling Eyes Kuwait Growth Once Oil Prices Recoverby
Precision Drilling Corp. is eyeing growth in Kuwait and other Middle Eastern countries once crude prices recover as a way to reduce dependency on North American markets, Chief Executive Officer Kevin Neveu said.
The Canadian oil-service provider will have five rigs operating in Kuwait by the end of the year, Neveu said in an interview with Pamela Ritchie on Bloomberg TV. The equipment deployed there will generate about three times as much revenue as rigs in North America, he said. But the expansion will have to wait until crude prices, currently hovering around $45 a barrel, rise further.
“Long term we see Kuwait as a good growth market” with between 10 to 15 rigs in operation for the company, he said. Other markets with opportunities for expansion include Saudi Arabia and Kurdistan, he added. “At $45, it’s just not good enough” to see growth in those markets.
Precision Drilling has scaled back its operations as customers reduced spending in the past year. The company is currently operating 60 rigs and could boost that number to 150 with “virtually” no new capital spending as a recovery takes hold, he said.
The company on Thursday said its loss widened to C$57.7 million ($44 million), or 20 cents a share, in the second quarter, from C$29.8 million, or 10 cents, in the year-earlier period. Revenue fell 51 percent to about C$164 million. The shares fell 4.6 percent to C$5.87 at the close in Toronto.