Precision Drilling Corporation Announces 2014 Capital ExpenditurePlan
CALGARY, ALBERTA, Dec 10, 2013 (Menafn - Marketwired via COMTEX) --(Canadian dollars, unless otherwise indicated)
Precision Drilling Corporation PDS ("Precision" orthe "Corporation") announced today that planned capital expendituresfor 2014 are 504 million.
2014 Capital Plan and Update on 2013 Capital Plan
The 2014 capital expenditure plan includes 255 million for expansioncapital, 192 million for sustaining and infrastructure expenditures,and 57 million to upgrade existing rigs. We expect that the 504million will be split 468 million in the Contract Drilling segmentand 36 million in the Completion and Production Services segment.
Precision's expansion capital plan includes five new build drillingrigs and the completion and deployment of six previously announcednew build drilling rigs. The new rigs announced today include fournew build drilling rigs in Canada; one Super Single for heavy oildevelopment drilling, and three additional ST-1500 rigs for northerngas and gas liquids drilling. The plan also includes one additionalST-1500, which will only be completed once a firm customer contractis secured. The previously announced new build drilling rigs include:two ST-1500 rigs for West Texas deployment in the first and secondquarters of 2014; two ST-1500 rigs to be deployed in early 2014 forgas and gas liquids drilling in Northern Canada; and two ST-3000 rigsexpected to be deployed in Kuwait late in the second quarter.Additional expansion capital is allocated to equipment for Completionand Production Services and long-lead items.
The 2014 capital plan includes the completion of the rig upgradespreviously announced in 2013 and six to ten additional rig upgradesin 2014.
Precision's sustaining and infrastructure capital plan is based uponcurrently anticipated activity levels for 2014 and scheduledinfrastructure projects, including the Nisku, Alberta combinedtechnical and operations support centre, additional regional supportfacilities and corporate systems. The Nisku centre consolidatesPrecision's existing Canadian operations and technology supportcentres and will contain a new employee training centre complete witha fully functioning training rig equipped with the latest drillingtechnology. The Nisku facility is expected to support Canadianoperations for several decades, provide increased capacity andefficiency, and ensure that we continue to meet the needs of ourcustomers with highly skilled and well trained field personnel. Theportion of the 2014 budget allocated to completing this facility isapproximately 30 million.
We anticipate 2013 capital expenditures to be approximately 561million, a 48 million decrease from our previous guidance. Carryforward capital expenditures of 183 million have been included inthe 2014 capital expenditure guidance of 504 million.
Operational Update and Near Term Outlook
Precision's active drilling rig count in both Canada and the UnitedStates has been increasing throughout the fourth quarter. As oftoday, Precision has 109 active drilling rigs in Canada, 93 in theUnited States and 12 in international locations.
We expect Precision's Canadian drilling rig count to remain atcurrent levels until industry activity breaks for the holiday seasonbefore returning to higher activity after the first of the year. Weexpect our first quarter peak activity levels to be similar to winter2013. In the United States, we expect recent market share gains to bemaintained in the near term and activity levels to increase ordecrease with industry activity.
Precision currently has 200 Tier 1 rigs and will have 211 Tier 1drilling rigs upon delivery of all announced new builds, up from 93Tier 1 rigs in 2009. To date in 2013, we have completed and deliveredeight new build drilling rigs.
Quote from Precision's CEO
"Precision continues to enhance its ability to deliver HighPerformance, High Value services. Our positioning in the NorthAmerican Tier 1 market has never been stronger. We remain focused onpotential LNG-related drilling as we now have signed contracts orfirm customer commitments for five new build Super Triple drillingrigs for drilling programs supported by foreign capital tied to LNG.While the full potential of the Canadian LNG export opportunity hashurdles to pass, we are encouraged by the interest in our serviceshighlighted by these new builds, which positions us for furthergrowth supporting these projects. These rigs are in addition to theeight new build Super Triple drilling rigs we have deployed to theCanadian market in the past two years."
"Our 2014 capital expenditure plan demonstrates how Precisionprudently deploys capital toward projects generating attractivereturns. Our footprint and customer base affords us numerousopportunities to invest capital and our focus remains on selectingthe best projects producing returns on the capital we deploy andreturning value to shareholders in the form of share priceappreciation and dividends."
Cautionary Statement Regarding Forward-Looking Information andStatements
Certain statements contained in this report, including statementsthat contain words such as "could", "should", "can", "anticipate","estimate", "propose", "plan", "expect", "believe", "will", "may" andsimilar expressions and statements relating to matters that are nothistorical facts constitute "forward-looking information" within themeaning of applicable Canadian securities legislation and"forward-looking statements" within the meaning of the "safe harbor"provisions of the United States Private Securities Litigation ReformAct of 1995 (collectively, "forward-looking information andstatements").
In particular, forward-looking information and statements include,but are not limited to: guidance on our 2013 and 2014 capital plansincluding the level, timing and planned uses of capital expenditures,the deployment and purpose of new build rigs, the allocation ofadditional expansion capital to equipment for Completion andProduction services and long-lead items to meet additional expectednew build and rig upgrade demand in 2014, the amount and timing ofplanned sustaining and infrastructure capital based upon currentlyanticipated activity levels for 2014 and completion of scheduledinfrastructure projects, that Precision's Canadian drilling rig countis expected to remain at current levels until industry activitybreaks for the holiday season before returning to higher activityafter the first of the year, that our first quarter peak activitylevels are expected to be similar to winter 2013 and that in theUnited States, we expect recent market share gains to be maintainedin the near term and activity levels to increase or decrease withindustry activity.
These forward-looking information and statements are based on certainassumptions and analysis made by the Corporation in light of itsexperience and its perception of historical trends, currentconditions and expected future developments, as well as other factorsit believes are appropriate in the circumstances. However, whetheractual results, performance or achievements will conform to theCorporation's expectations and predictions is subject to a number ofknown and unknown risks and uncertainties which could cause actualresults 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 anddevelopment activities; general economic, market or businessconditions, realizing contracts from firm customer commitments; andother unforeseen conditions which could impact the use of servicessupplied by Precision.
Consequently, all of the forward-looking information and statementsmade in this report are qualified by these cautionary statements andthere can be no assurance that the actual results or developmentsanticipated by the Corporation will be realized or, even ifsubstantially realized, that they will have the expected consequencesto, or effects on, the Corporation or its business or operations.Readers are therefore cautioned not to place undue reliance on suchforward-looking information and statements. Except as may be requiredby law, the Corporation assumes no obligation to update publicly anysuch forward-looking information and statements, whether as a resultof new information, future events or otherwise.
Precision is a leading provider of safe and High Performance, HighValue services to the oil and gas industry. Precision providescustomers with access to an extensive fleet of contract drillingrigs, directional drilling services, well service and snubbing rigs,coil tubing services, camps, rental equipment, and wastewatertreatment units backed by a comprehensive mix of technical supportservices and skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta, Canada. Precision islisted 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
Precision Drilling Corporation
800, 525 - 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
SOURCE: Precision Drilling Corporation
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