Precision Drilling swings to Q4 loss sees challenging year

(MENAFN- ProactiveInvestors) Precision Drilling (TSE:PD) Canada's largest oil and gas drilling contractor swung to a fourth-quarter loss and said that this year is likely to be the most challenging year for rig contractors this decade pressured by weak crude prices.

Net loss was C$114 million or C$0.39 loss per share for the October-to-December quarter compared with a profit of C$67.9 million or C$0.24 per share a year earlier the Calgary Alberta-based company said in a statement today. On average 12 analysts surveyed by Capital IQ expected the company to report earnings of C$0.23 per share for the quarter.

The company said it took an asset and goodwill impairment charge due to low oil prices.

Global crude prices have more than halved since June forcing producers to cut back on spending as they pare exploration and production activities and cut the number of drilling rigs they will deploy this year.

Revenue rose 9.1 percent to C$618.53 million but trailed market expectations of C$625.86. 

"The clearest picture of this adjustment is in the reported North America industry rig count declines which we expect will continue in the near term" chief executive officer Kevin Neveu said in the statement.

Precision Drilling's rig count in the United States fell to 86 from 100 in the fourth quarter while that in Canada fell to 79 from 93.

The company said two new build rigs scheduled for customer delivery in 2015 have been deferred.

Shares were up 1.5 percent at C$7.27 at 10:31 a.m. in Toronto. The stock has lost 44 percent over the past six months.

Precision Drilling said today that it now expects capital expenses of C$467 million in 2015 lower than the C$493 million it had forecast in December.

Also today the company declared a dividend of $0.07 per share payable on March 12 to shareholders of record on February 27.