Precision Drilling Corporation Reaches Agreement With Canada Revenue Agency to Resolve Previously Disclosed Tax Reassessment
06 Settembre 2011 - 12:00PM
Marketwired
Precision Drilling Corporation ("Precision") announced today that
it has reached an agreement with the Canada Revenue Agency ("CRA")
to resolve a tax reassessment made by the CRA and disputed by
Precision.
As previously disclosed in public filings, on February 9, 2011,
Precision received a notice of reassessment from the CRA for
federal tax and interest totaling $216 million relating to a
transaction that occurred in the 2005 tax year. Precision objected
to the reassessment and was required to pay $108 million toward the
reassessed balance as part of the appeal process.
Based on the settlement agreement, Precision anticipates
receiving an income tax reassessment from the CRA of $26 million
federal tax plus interest of $11 million. The anticipated
reassessed total of $37 million is $179 million less than the
February reassessment and will result in a refund of $71 million to
Precision. As part of the settlement agreement, Precision will
waive all rights to appeal the reassessment. Additionally,
Precision anticipates that the CRA settlement should result in an
Alberta income tax reassessment and interest charges totaling $13
million.
A $50 million onetime charge related to the CRA settlement and
expected provincial tax reassessment will be reflected in
Precision's third quarter net earnings. Also, as a result of the
settlement, Precision's contingent tax liability previously
disclosed in Note 16 of its second quarter financial statements
will be reduced from $350 million to $58 million, a reduction of
$292 million.
"We believe the settlement, which eliminates a potentially
significant tax liability, is in the best long-term interests of
Precision and its shareholders. We are pleased to have resolution
to this matter and close the final chapter of a 2005 transaction."
said Rob McNally, Precision's Executive Vice President and Chief
Financial Officer.
About Precision
Precision is a leading provider of safe and High Performance,
High Value services to the North American oil and gas industry.
Precision provides customers with access to an extensive fleet of
contract drilling rigs, service rigs, directional drilling
services, camps, snubbing units, water treatment units and rental
equipment 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".
Contacts: Precision Drilling Corporation Carey Ford Vice
President, Finance and Investor Relations 403.716.4575 403.716.4755
(FAX) Precision Drilling Corporation 4200, 150 - 6th Avenue S.W.
Calgary, Alberta, Canada T2P 3Y7 www.precisiondrilling.com
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