(Canadian Dollars Except as Indicated)
This news release contains "forward-looking information and
statements" within the meaning of applicable securities laws. For a
full disclosure of the forward-looking information and statements
and the risks to which they are subject, see the "Cautionary
Statement Regarding Forward-Looking Information and Statements"
later in this news release.
The Board of Directors of Precision Drilling Corporation
(TSX:PD) (NYSE:PDS) ("Precision" or the "Corporation") has declared
a first quarter dividend on its common shares of $0.05 per common
share, payable on March 15, 2013, to shareholders of record on
February 28, 2013. For Canadian income tax purposes, all dividends
paid by Precision on its common shares are designated as "eligible
dividends", unless otherwise indicated by Precision.
Precision reported a net loss of $116 million or $0.42 per
diluted share for the three months ended December 31, 2012 compared
to net earnings of $28 million for the fourth quarter of 2011. In
the quarter Precision recognized an after tax asset decommissioning
charge and goodwill impairment charge that combined reduced net
earnings by $179 million and net earnings per diluted share by
$0.63 compared to the prior year when an after tax asset
decommissioning charge was recognized that reduced net earnings by
$76 million and net earnings per diluted share by $0.26.
Revenue for the fourth quarter of 2012 was $534 million and
earnings before income taxes, finance charges, foreign exchange,
impairment of goodwill, loss on asset decommissioning and
depreciation and amortization ("Adjusted EBITDA") totaled $177
million compared to $587 million and $230 million, respectively,
during the comparable period in 2011. The decrease in revenue and
Adjusted EBITDA was primarily the result of lower activity levels
across most business lines over the prior year period and higher
operating costs partially offset by increases in pricing. Activity
for Precision in the fourth quarter of 2012, as measured by
drilling rig utilization days, decreased 23% in Canada and 19% in
the United States compared to 2011.
Fourth quarter 2012 revenue and Adjusted EBITDA were higher than
the third quarter 2012 revenue and Adjusted EBITDA of $485 million
and $151 million, respectively, primarily as a result of higher
dayrates and margins in the United States and Canada coupled with
increased activity levels in Canada.
For the year ended December 31, 2012, Precision reported net
earnings of $52 million or $0.18 per diluted share compared to net
earnings of $193 million or $0.67 per diluted share for 2011.
Excluding the impact of the asset decommissioning and goodwill
impairment, net earnings per diluted share would have been $0.81 in
2012 compared to $0.93 in 2011. Revenue for the year was $2,041
million compared to $1,951 million in 2011. Adjusted EBITDA totaled
$671 million for 2012 compared to $695 million in 2011, a decrease
of 3%. Improved pricing was offset by lower activity levels in both
operating segments. Activity for Precision in 2012, as measured by
drilling rig utilization days, decreased 15% in Canada and 9% in
the United States compared to 2011.
Precision's wholly-owned international subsidiary, Grey Wolf
Drilling International Ltd., recently contracted two rigs with a
customer for deep drilling operations in Kurdistan. The two 2000 HP
rigs are existing Precision rigs that will be upgraded for desert
operations. These rigs are expected to be deployed mid 2013 under a
long-term contract. Additionally, Precision has signed a contract
for operations in Mexico that will add one additional rig to its
Mexican fleet during the second quarter of 2013.
During the fourth quarter of 2012 Precision provided an update
on its 2012 and 2013 capital expenditure programs. Precision
concluded 2012 with $868 million in capital expenditures,
approximately $52 million lower than planned. Of the $52 million in
underspent capital from 2012, $41 million is targeted for specific
projects and will be carried forward and spent in early 2013.
Planned capital expenditures for 2013 are now $526 million and
include capital expenditures from new build announcements in 2012
that will be completed in 2013 and approximately 50% of the costs
associated with the two rig contract in Kuwait. A substantial
portion of the 2013 capital plan is utilization and demand based
and if activity levels increase or decline, Precision has the
ability to adjust the plan accordingly.
Kevin Neveu, Precision's President and Chief Executive Officer,
stated: "While 2012 finished with softening demand for our services
in our Canadian and U.S. markets I am pleased that we continue to
see excellent opportunities to deploy our High Performance, High
Value rigs internationally, expanding our breadth in the Arabian
Gulf and with integrated service providers in Mexico. Like most, we
remain cautious on our outlook for near term energy services growth
in North America, but remain firm believers in the long term
opportunities for drilling and development of unconventional
hydrocarbon resources."
"Precision's contract for two rigs for deployment to Northern
Iraq in the Kurdistan Region is the most recent step in our
international expansion. These rigs will be mobilized from our U.S.
fleet and will operate for an international oil company on
long-term contracts. Including the two new builds announced in
December for Kuwait, by mid-2014 we expect to have seven rigs
operating in the Arabian Gulf region and believe additional
opportunities for Precision's High Performance, High Value services
will emerge. The additions to our Mexican fleet include one rig to
be deployed late in the first quarter and a second rig in the
second quarter moving our Mexican fleet to seven rigs, with six
currently contracted to drill deep, high pressure oil wells for
international integrated project service providers."
"While overall North American opportunities ebbed during 2012,
due primarily to capital budget restraint by our customers, demand
for our Tier 1 assets remained firm and Precision's fleet
transformation continued throughout the year. The Corporation
deployed 36 new build Super Series drilling rigs, almost twice as
many as any previous year in the Corporation's history, and all
delivered to long-term customer contracts. In addition, during 2012
we upgraded 11 drilling rigs under long-term customer
contracts."
"Precision now has 188 Tier 1 rigs, compared to 109 just three
years ago. Adding our 107 Tier 2 rigs, Precision has 295 High
Performance rigs ideally suited to drill effective, predictable and
repeatable horizontal wells. Precision's decision to accelerate our
exit of the Tier 3 business at the end of 2012 reflects our
capability to respond changing customer dynamics and the long-term
value customers see in high performance services."
"In late 2011, Precision opened its Houston Technology Center
which includes a permanent state of the art, fully functional Super
Series training drilling rig. During 2012, Precision trained nearly
1,500 employees at this facility. In mid-2012 at our Red Deer Well
Service Technology Center we constructed a similar fully functional
well service rig to support the ongoing training and development of
our well service field personnel. Combined training activities in
Canada, the U.S. and our International operations touched most of
our employees, including the 3,000 new employees added to Precision
during 2012. The result of this strategic investment in our people
is a high performance, highly trained field work force that
delivered Precision the best safety performance in our history with
269 drilling rigs and 187 well service rigs without a single
recordable safety incident in 2012. While customers view safety as
a key differentiator, we consider as our foundation the safety of
our people and believe our safety performance is one of our most
important competitive advantages."
"During 2013 we plan to expand our Nisku, Alberta Operations and
Technology Center and initiate the construction of a second state
of the art drilling rig training facility employing modern drilling
technology to continue the ongoing training and development of our
field work force."
"In our Completion and Production Services segment, Precision
continues to expand both its service lines and geographic presence
to meet our customer needs. We have made investments in people and
equipment to align ourselves with the demands of unconventional
field development. Additionally, we continue to grow our integrated
directional drilling service and see interest from our customers
for an integrated model that results in cost savings and
reliability for our customers."
"Precision continued to exercise capital discipline by reducing
its capital expenditure plan several times throughout 2012 in
response to softening industry conditions and by maintaining rigid
return hurdles for evaluating investment opportunities. Also, as
our free cash flow outlook improved, we were pleased to be able to
institute a quarterly dividend. Finally, we continued to maintain
financial flexibility, at year-end 2012 Precision had $153 million
of cash on hand and US$823 million undrawn availability in our
revolving credit facility."
"Customer demand for Precision's services is reflected in the
solid dayrates generated by our drilling rigs in Canada and the
U.S., despite reduced industry rig counts. Canadian drilling
dayrates increased by $2,026 over the previous year comparable
quarter while U.S. drilling dayrates increased by $2,270. The
operating results in both Canada and the U.S. point to the strength
of the Tier 1 market in Canada and the U.S. as well as Precision's
ability to deploy new build and upgraded drilling rigs to its
active fleet at higher dayrates in 2012. In the U.S., turnkey
activity in the quarter accounted for the majority of the dayrate
and operating cost increases from the prior year."
"Canadian oil directed drilling activity has been strong in the
first quarter of 2013. Precision's current active rig count in
Canada is 152 and its average rig count of 90 during the fourth
quarter of 2012 was 23% lower than the average rig count of 117
during the comparable quarter of 2011. Dayrate increases realized
throughout 2012 reflect continued demand for high performance
assets in the Canadian marketplace, Precision's improved rig mix
with the addition of new build and upgraded rigs, and pass through
of wage increases."
"U.S. drilling activity decreased in 2012 as overall industry
activity declined. Precision's current active U.S. rig count is 83
and its average rig count of 87 during the fourth quarter of 2012
was 19% lower than the average rig count during the comparable
quarter in 2011. Despite the active rig count decline, Precision
realized dayrate increases year over year."
"Precision's High Performance, High Value reputation with
customers, multiple growth avenues in North American and
international markets and our focus on unconventional and
technically challenging applications provide the foundation for
future revenue and earnings growth. I believe we have positioned
Precision for market success today and into the future," concluded
Mr. Neveu.
SELECT FINANCIAL AND OPERATING INFORMATION
(Stated in thousands of Canadian
dollars, except per share Three months ended
amounts) December 31,
2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 533,948 $ 587,408 (9.1)
Adjusted EBITDA(1) 177,026 229,839 (23.0)
Net earnings (loss) (116,339) 28,046 n/m
Cash provided by operations 136,317 218,857 (37.7)
Funds provided by operations(1) 142,576 256,103 (44.3)
Capital spending:
Expansion 123,063 221,195 (44.4)
Upgrade 22,706 56,078 (59.5)
Maintenance and infrastructure 40,881 50,714 (19.4)
Proceeds on sale (17,603) (7,289) 141.5
-----------------------------------------
Net capital spending 169,047 320,698 (47.3)
Net earnings (loss) per share:
Basic (0.42) 0.10 n/m
Diluted (0.42) 0.10 n/m
----------------------------------------------------------------------------
Contract drilling rig fleet 321 337 (4.7)
Drilling rig utilization days:
Canada 8,242 10,724 (23.1)
United States 8,014 9,834 (18.5)
International 736 172 327.9
Service rig fleet 214 207 3.4
Service rig operating hours(2) 77,234 88,131 (12.4)
----------------------------------------------------------------------------
(Stated in thousands of Canadian
dollars, except per share
amounts) Year ended December 31,
2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 2,040,741 $ 1,951,027 4.6
Adjusted EBITDA(1) 670,792 695,064 (3.5)
Net earnings (loss) 52,360 193,477 (72.9)
Cash provided by operations 635,286 532,772 19.2
Funds provided by operations(1) 598,812 592,388 1.1
Capital spending:
Expansion 596,194 455,302 30.9
Upgrade 130,094 149,811 (13.2)
Maintenance and infrastructure 141,769 121,244 16.9
Proceeds on sale (31,423) (15,983) 96.6
------------------------------------------
Net capital spending 836,634 710,374 17.8
Net earnings (loss) per share:
Basic 0.19 0.70 (72.9)
Diluted 0.18 0.67 (73.1)
----------------------------------------------------------------------------
Contract drilling rig fleet 321 337 (4.7)
Drilling rig utilization days:
Canada 32,352 37,970 (14.8)
United States 34,597 37,887 (8.7)
International 2,086 702 197.2
Service rig fleet 214 207 3.4
Service rig operating hours(2) 294,681 317,418 (7.2)
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Prior year comparatives have changed to include United States based
service rig activity.
n/m - calculation not meaningful.
FINANCIAL POSITION AND RATIOS
(Stated in thousands of Canadian December 31, December 31,
dollars, except ratios) 2012 2011
----------------------------------------------------------------------------
Working capital $ 278,021 $ 610,429
Long-term debt(1) $ 1,218,796 $ 1,239,616
Total long-term financial liabilities $ 1,245,290 $ 1,267,040
Total assets $ 4,300,263 $ 4,427,874
Long-term debt to long-term debt plus
equity ratio(1) 0.36 0.37
----------------------------------------------------------------------------
(1) Net of unamortized debt issue costs.
Revenue in the fourth quarter of 2012 was $53 million lower than
the prior year period. The decrease was mainly due to lower
equipment utilization in both Canada and the United States
partially offset by a period-over-period increase in dayrates.
Compared to the prior year, revenue in Precision's Contract
Drilling Services segment decreased by 9% in the fourth quarter
while in the Completion and Production Services revenue decreased
11%.
Adjusted EBITDA margin (Adjusted EBITDA as a percentage of
revenue) was 33% for the fourth quarter of 2012 compared to 39% for
the same period in 2011. The decrease in EBITDA margin was
primarily attributable to higher average costs and lower
utilization in both Canada and the United States in the fourth
quarter of 2012 versus the prior year period. Higher operating
costs in the quarter were the result of labour related costs and
higher costs internationally. Precision's term contract position
with customers, a highly variable operating cost structure and
economies achieved through vertical integration continue to support
EBITDA margins.
Precision's 2013 priorities are threefold:
1. Continue to execute and deliver our High Performance, High Value
services to our customers. We will continue to uphold Precision's
reputation and market breadth in North America while strengthening our
presence in select international oilfield markets.
2. Continue to drive execution excellence in Precision's people, internal
systems and infrastructure including supporting our world class safety,
training and development programs, upgrading and consolidating our Nisku
operations facilities, fully implementing the Precision model through
vertical integration in the United States, and ensuring our processes
are fully supporting international operations.
3. Remain poised to seize growth opportunities in 2013, leveraging our
balance sheet strength and flexibility. Precision is positioned to
execute on established growth strategies and capitalize on additional
growth opportunities as they emerge but, as always when considering
growth investments, our long-term investment hurdles remain in place as
we strive to maximize value for our investors.
After the decommissioning of the previously announced 52
drilling rigs (30 in the United States and 22 in Canada),
Precision's current fleet consists of 321 contract drilling rigs,
including 186 in Canada, 127 in the United States and eight rigs in
international locations. Consistent with Precision's High
Performance, High Value strategy, the Corporation performed a
thorough review of its rig fleet in 2012, resulting in a fourth
quarter decommissioning of 52 legacy drilling rigs. This
decommissioning marked Precision's exit of the Tier 3 contract
drilling business and the Corporation's continued focus on the high
performance segment of the market. Precision will retain 26 legacy
drilling rigs for seasonal, stratification and turnkey drilling
work ("PSST rigs"). Precision currently maintains directional
drilling equipment and personnel capacity to run 91 jobs.
Precision's Completion and Production Services segment includes 214
service rigs (which include service rigs, snubbing units and coil
tubing units), 57 drilling and base camps and a broad mix of rental
equipment.
For the fourth quarter of 2012, West Texas Intermediate crude
oil averaged US$88.10 per barrel, 6% lower when compared to
US$93.88 per barrel in the same period in 2011. Brent crude prices
averaged US$108.15 per barrel during the fourth quarter of 2012, 5%
higher when compared to US$102.75 per barrel for the same period in
2011. AECO natural gas spot prices averaged $3.20 per MMBtu, 1%
higher than the fourth quarter 2011 average of $3.18 per MMBtu. In
the United States, Henry Hub natural gas spot prices averaged
US$3.40 per MMBtu in the fourth quarter of 2012, an increase of 3%
over the fourth quarter 2011 average of US$3.31 per MMBtu.
Summary for the three months ended December 31, 2012:
-- Precision realized an operating loss of $105 million, a decrease of $149
million from the 2011 fourth quarter operating earnings of $44 million.
In the fourth quarter of 2012, Precision recorded an impairment charge
of $192 million related to the decommissioning of 52 drilling rigs. This
compares to a fourth quarter impairment charge in 2011 of $115 million
related to the decommissioning of 36 drilling rigs and 13 well servicing
rigs. Excluding the decommissioning charges, operating earnings were $88
million or 16% of revenue, compared to $159 million or 27% in 2011.
Operating earnings were negatively impacted by the costs of
international operations and the decrease in activity in most of
Precision's operations.
-- General and administrative expenses were $30 million, $6 million lower
than the fourth quarter of 2011. Lower costs associated with declines in
activity combined with lower incentive compensation costs tied to the
price of Precision's common shares.
-- Under International Financial Reporting Standards, Precision is required
to assess the carrying value of assets in its cash generating units
annually. Due to the decrease in natural gas well drilling in Canada and
the outlook for natural gas pricing, Precision recognized a $53 million
impairment charge on goodwill in the quarter which represents the full
amount of goodwill attributable to its Canadian Directional Drilling
operations.
-- Finance charges were $22 million an increase of $3 million compared with
the fourth quarter of 2011. The increase is primarily due to a one-time
gain recognized in 2011.
-- Average revenue per utilization day for contract drilling rigs increased
in the fourth quarter of 2012 to US$25,465 from the prior year fourth
quarter of US$23,195 in the United States and increased in Canada to
$21,997 in the fourth quarter of 2012 from $19,971 for the fourth
quarter of 2011. The increase in revenue rates for the fourth quarter in
Canada and the United States reflects the additional Tier 1 and upgraded
rigs entering the fleet compared to the prior year quarter, the pass
through of increased labour costs and higher turnkey revenue in the
United States. In Canada, for the fourth quarter of 2012, 41% of
Precision's utilization days were achieved from drilling rigs working
under term contracts compared to 38% in the 2011 comparative period. In
the United States, for the fourth quarter of 2012, 68% of Precision's
utilization days were generated from rigs working under term contracts
compared to 79% in the 2011 comparative period. Turnkey revenue for the
fourth quarter of 2012 was US$32 million compared with US$15 million in
the 2011 comparative period. Within Precision's Completion and
Production Services segment, average hourly rates for service rigs were
$740 in the fourth quarter of 2012 compared to $731 in the fourth
quarter of 2011.
-- Average operating costs per utilization day for drilling rigs increased
in the fourth quarter of 2012 to US$16,103 from the prior year fourth
quarter of US$13,737 in the United States while in Canada costs
increased to $10,141 in 2012 from $9,326 in 2011. The cost increase in
the United States was primarily due to a higher proportion of turnkey
activity and increased labour related costs. The cost increase in Canada
was primarily due to a labour rate increase that became effective in the
fourth quarter of 2012 and higher repairs and maintenance cost. Within
Precision's Completion and Production Services segment, average hourly
operating costs for service rigs in Canada increased to $572 in the
fourth quarter of 2012 as compared to $516 in the fourth quarter of 2011
primarily due to costs associated with coil tubing and higher fuel
costs. Typically, labour rate increases in both operating segments are
recovered in dayrate increases.
-- Precision realized revenue from directional services of $35 million in
the fourth quarter of 2012 compared with $38 million in the prior year
period.
-- Funds provided by operations in the fourth quarter of 2012 were $143
million, a decrease of $113 million from the prior year comparative
quarter of $256 million. The decrease was due to weaker operating
results compared to the prior year period and the recording of income
tax recoveries in 2011.
-- Capital expenditures for the purchase of property, plant and equipment
were $187 million in the fourth quarter, a decrease of $141 million over
the same period in 2011. Capital spending for the fourth quarter of 2012
included $123 million for expansion capital, $23 million for upgrade
capital and $41 million for the maintenance of existing assets and
infrastructure spending.
Summary for the year ended December 31, 2012:
-- Revenue for 2012 was $2,041 million an increase of 5% over 2011.
-- Operating earnings were $171 million, a decrease of $158 million or 48%
over 2011. Excluding the asset decommissioning charge, operating
earnings were $363 million in 2012 or 18% of revenue, compared to $444
million or 23% in 2011.
-- General and administrative costs were $127 million, an increase of $2
million compared to 2011 primarily as a result of increased activity
partially offset by a decrease for stock-based compensation cost in
2012.
-- Finance charges were $87 million, a decrease of $25 million from 2011
due to the 2011 charge of $27 million for the make-whole premium from
refinancing a previously outstanding debt and interest expense
associated with Canadian income tax settlements offset by higher
interest costs from an increased average long-term debt balance and a
one-time gain recognized in 2011.
-- Funds provided by operations for 2012 were $599 million, an increase of
$7 million from the prior year of $592 million.
-- Capital expenditures for the purchase of property, plant and equipment
were $868 million in 2012, an increase of $142 million from 2011.
Capital spending for 2012 included $596 million for expansion capital,
$130 million for upgrade capital and $142 million for the maintenance of
existing assets and infrastructure.
OUTLOOK
Precision's average active rig count of 87 rigs in the United
States for the fourth quarter of 2012 was down 20 rigs over the
same period of 2011 and three rigs over the third quarter of 2012.
Precision is currently running 83 rigs in the United States and
expects its active rig count in the United States to remain flat
over the coming months. Internationally in 2013, Precision's rig
count is expected to grow from eight rigs to 11 rigs as the two
recently contracted rigs begin drilling in Kurdistan and the
Mexican rig count is expected to increase from five rigs drilling
to six.
In Canada, Precision averaged 90 rigs operating during the
fourth quarter of 2012, down 27 rigs over the same period in 2011
and up six rigs over the third quarter of 2012. Precision expects
strong levels of market activity to continue during the first
quarter of 2013 until spring break-up and expects to benefit from
the fleet enhancements made throughout 2012.
Precision has a strong portfolio of term contracts that provide
a base level of activity and cash flow. Precision currently has 109
rigs committed under term contracts for the first quarter of 2013
and 104 rigs contracted for the second quarter of 2013. In Canada,
term contracted rigs normally generate 250 utilization days per rig
year due to the seasonal nature of Canadian activity, whereas in
the United States they normally generate 365 utilization days per
rig year in most regions.
For 2013, based on current drilling rig contracts, Precision has
term contracts for 52 rigs in Canada, 36 rigs in the United States
and eight internationally. Since the third quarter of 2012 earnings
release, Precision has added term contracts that increased the
contracted rig average for 2013 from 86 rigs to 96 rigs.
Capital expenditures are expected to be approximately $526
million for 2013 and include:
-- $205 million for expansion capital which includes the cost to complete
construction of the two remaining rigs from the 2012 new build program,
one new build rig for the North American market and the cost to complete
about 50% of two new build rigs for operation in Kuwait;
-- $127 million for upgrade capital which includes the cost to upgrade
approximately 20 rigs, including the two rigs for operation in
Kurdistan; and
-- $194 million for sustaining and infrastructure expenditures which is
based upon currently anticipated activity levels and the cost to
consolidate and upgrade our Nisku operations facility.
Precision expects that the $526 million will be split $434
million for the Contract Drilling segment and $92 million for the
Completion and Production Services segment.
To date in 2013, there has been lower drilling activity in
Canada and the United States than in the prior year. According to
industry sources, as at February 8, 2013, the U.S. active land
drilling rig count was down about 13% from the same point in the
prior year and the Canadian drilling rig count had decreased by
about 11%. Although the industry and Precision have experienced
year-over-year declines in rig utilization, continued demand for
Tier 1 assets has supported dayrates charged to customers in both
Canada and the United States.
Natural gas production in the United States has remained strong
despite reduced natural gas drilling activity. The United States
natural gas storage levels as at February 1, 2013 were 15% above
the five-year average and 8% below storage levels of a year ago.
The increase in oil and liquids-rich drilling in areas like West
Texas, the Bakken and the Eagle Ford has resulted in the United
States oil rig count as at February 8, 2013 to be 6% higher than it
was a year ago. To date, customer changes in natural gas drilling
plans are reflected in a decline in the rig count targeting dry gas
plays. If low natural gas prices continue, Precision and the North
American drilling industry could see a further reduction in demand
for natural gas drilling.
Precision, along with the land drilling industry, is in the
process of upgrading the fleet of drilling rigs through newly built
rigs and upgraded existing rigs. Precision believes that this
"retooling" of the industry wide fleet will result in the virtual
obsolescence of Tier 3 rigs in North America over the next few
years. In the fourth quarter of 2012 Precision decommissioned 42
Tier 3 drilling rigs and 10 Tier 2 rigs from its fleet. Precision
is exiting the Tier 3 contract drilling business but will retain 26
drilling rigs for seasonal, stratification and turnkey drilling
work, these rigs will be categorized as "PSST" rigs. Precision's
focus on the Tier 1 and Tier 2 market is aligned with the
Corporation's strategy, customer relationships and competitive
position.
SEGMENTED FINANCIAL RESULTS
Precision's operations are reported in two segments: the
Contract Drilling Services segment which includes the drilling rig,
directional drilling, oilfield supply and manufacturing divisions;
and the Completion and Production Services segment which includes
the service rig, snubbing, coil tubing, rental, camp and catering
and wastewater treatment divisions.
(Stated in
thousands of
Canadian Three months ended
dollars) December 31, Year ended December 31,
% %
2012 2011 Change 2012 2011 Change
----------------------------------------------------------------------------
Revenue:
Contract
Drilling
Services $ 452,104 $ 494,397 (8.6) $1,725,240 $1,632,037 5.7
Completion and
Production
Services 85,225 95,265 (10.5) 326,079 330,225 (1.3)
Inter-segment
eliminations (3,381) (2,254) 50.0 (10,578) (11,235) (5.8)
----------------------------------------------------------------------------
$ 533,948 $ 587,408 (9.1) $2,040,741 $1,951,027 4.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted
EBITDA:(1)
Contract
Drilling
Services $ 172,169 $ 216,720 (20.6) $ 649,281 $ 665,389 (2.4)
Completion and
Production
Services 22,222 33,558 (33.8) 93,554 104,252 (10.3)
Corporate and
Other (17,365) (20,439) (15.0) (72,043) (74,577) (3.4)
----------------------------------------------------------------------------
$ 177,026 $ 229,839 (23.0) $ 670,792 $ 695,064 (3.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES
(Stated in thousands of
Canadian dollars, except where
noted) Three months ended December 31,
2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 452,104 $ 494,397 (8.6)
Expenses:
Operating 270,804 266,027 1.8
General and administrative 9,131 11,650 (21.6)
----------------------------------------------------------------------------
Adjusted EBITDA(1) 172,169 216,720 (20.6)
Depreciation 78,327 62,563 25.2
Loss on asset decommissioning 192,469 113,366 69.8
----------------------------------------------------------------------------
Operating earnings (loss)(1) $ (98,627) $ 40,791 n/m
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings (loss) as a
percentage of revenue (21.8%) 8.3%
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in Canada $ 21,997 $ 19,971 10.1
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in the United
States(2) US$ 25,465 US$ 23,195 9.8
----------------------------------------------------------------------------
(Stated in thousands of
Canadian dollars, except where
noted) Year ended December 31,
2012 2011 % Change
----------------------------------------------------------------------------
Revenue $ 1,725,240 $ 1,632,037 5.7
Expenses:
Operating 1,036,553 931,062 11.3
General and administrative 39,406 35,586 10.7
----------------------------------------------------------------------------
Adjusted EBITDA(1) 649,281 665,389 (2.4)
Depreciation 271,993 219,194 24.1
Loss on asset decommissioning 192,469 113,366 69.8
----------------------------------------------------------------------------
Operating earnings (loss)(1) $ 184,819 $ 332,829 (44.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings (loss) as a
percentage of revenue 10.7% 20.4%
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in Canada $ 21,030 $ 18,442 14.0
----------------------------------------------------------------------------
Drilling rig revenue per
utilization day in the United
States(2) US$ 23,696 US$ 21,744 9.0
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Includes revenue from idle but contracted rig days and lump sum payouts.
n/m - calculation not meaningful.
Three months ended December 31,
Canadian onshore drilling
statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs
(end of period) 186 822 188 805
Drilling rig operating
days (spud to release) 7,269 30,849 9,572 40,538
Drilling rig operating day
utilization 39% 40% 50% 54%
Number of wells drilled 862 2,813 1,074 3,198
Average days per well 8.4 11.0 8.9 12.7
Number of metres drilled
(000s) 1,435 5,856 1,781 6,561
Average metres per well 1,665 2,082 1,658 2,051
Average metres per day 197 190 186 162
----------------------------------------------------------------------------
Year ended December 31,
Canadian onshore drilling
statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs
(end of period) 186 822 188 805
Drilling rig operating
days (spud to release) 28,848 124,319 33,965 144,646
Drilling rig operating day
utilization 40% 42% 46% 49%
Number of wells drilled 3,085 10,753 3,566 11,832
Average days per well 9.4 11.6 9.5 12.2
Number of metres drilled
(000s) 5,233 20,869 5,717 22,613
Average metres per well 1,696 1,941 1,603 1,911
Average metres per day 181 168 168 156
----------------------------------------------------------------------------
(1) Canadian operations only.
(2) Canadian Association of Oilwell Drilling Contractors ("CAODC"), and
Precision - excludes non-CAODC rigs and non-reporting CAODC members.
United States onshore
drilling statistics:(1) 2012 2011
----------------------------------------------------------------------------
Precision Industry(2) Precision Industry(2)
----------------------------------------------------------------------------
Average number of active
land rigs for quarters
ended:
March 31 104 1,947 100 1,695
June 30 97 1,924 102 1,803
September 30 90 1,855 106 1,915
December 31 87 1,759 107 1,972
----------------------------------------------------------------------------
Year to date average 95 1,871 104 1,846
----------------------------------------------------------------------------
(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.
Contract Drilling Services segment revenue for the fourth
quarter of 2012 decreased by 9% to $452 million and Adjusted EBITDA
decreased by 21% to $172 million compared to the same period in
2011. The decrease in revenue and Adjusted EBITDA was due to the
lower drilling rig activity partially offset by higher average
rates per day for both Canada and the United States and increased
revenue in international contract drilling operations.
Activity in North America was impacted by decreased customer
demand for oil and liquids-rich natural gas related drilling
activity as a result of lower global oil prices. In the fourth
quarter, drilling rig revenue per utilization day in both Canada
and the United States was up 10% over the prior year. The increase
in average dayrates for Canada was the result of improved rig mix
and solid demand for Tier 1 assets. In the United States the
majority of the increase was driven by higher turnkey activity.
During the quarter, 41% of Precision's utilization days in Canada
were generated from rigs under term contract compared with 38% in
2011 while in the United States 68% of utilization days were
generated from rigs under term contract as compared to 79% in the
prior year period. At the end of the quarter, Precision had 54
drilling rigs working under term contracts in the United States and
55 in Canada.
Drilling rig utilization days in Canada (drilling days plus move
days) during the fourth quarter of 2012 were 8,242, a decrease of
23% compared to 2011. Drilling rig utilization days for Precision
in the United States were 8,014 or 19% lower than the same quarter
of 2011 due to decreased demand as customer's conserved cash and
deferred drilling programs into 2013. The majority of activity came
from oil and liquids-rich natural gas related plays. On average,
Precision had eight rigs working internationally during the fourth
quarter of 2012 compared with two in the corresponding quarter of
2011.
Contract Drilling Services segment operating costs were 60% of
revenue for the quarter, which is 6 percentage points higher than
the prior year period. Higher operating costs in the quarter were
the result of higher relative costs internationally, increased
labour costs and the decrease in activity as fixed costs were
spread over a lower revenue base. On a per day basis, operating
costs for the drilling rig division in Canada were above the prior
year primarily because of an increase in crew wage expense.
Operating costs for the quarter in the United States on a per day
basis were up from the comparable period in 2011 primarily due to
higher proportionate turnkey activity as well as higher labour and
overall operating costs. Typically, labour rate increases are
recovered in dayrate increases.
During the fourth quarter the Contract Drilling Services segment
recognized a loss of $192 million related to the decommissioning of
52 drilling rigs, 22 in Canada and 30 in the United States.
Quarterly depreciation in the Contract Drilling Services segment
increased 25% from the prior year. As discussed in Management's
Discussion and Analysis for the year ended December 31, 2011,
Precision changed its depreciation policy on certain Tier 3 rigs
from the unit of production method to straight-line over four years
resulting in approximately $5 million in additional depreciation in
the quarter. Additional increases in depreciation are the result of
a greater proportion of operating days from our Tier 1 drilling
rigs in 2012 relative to 2011, losses on asset disposals in the
current quarter and depreciation from the growth in directional
drilling and international contract drilling. With the exception of
certain PSST equipment and directional drilling equipment, contract
drilling operations use the unit of production method of
calculating depreciation.
SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES
(Stated in
thousands of
Canadian dollars,
except where Three months ended
noted) December 31, Year ended December 31,
% %
2012 2011 Change 2012 2011 Change
----------------------------------------------------------------------------
Revenue $ 85,225 $ 95,265 (10.5) $ 326,079 $ 330,225 (1.3)
Expenses:
Operating 59,383 57,983 2.4 217,326 211,195 2.9
General and
administrative 3,620 3,724 (2.8) 15,199 14,778 2.8
----------------------------------------------------------------------------
Adjusted EBITDA(1) 22,222 33,558 (33.8) 93,554 104,252 (10.3)
Depreciation 8,983 6,768 32.7 30,758 25,598 20.2
Loss on asset
decommissioning - 1,527 (100.0) - 1,527 100.0
----------------------------------------------------------------------------
Operating
earnings(1) $ 13,239 $ 25,263 (47.6) $ 62,796 $ 77,127 (18.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings
as a percentage
of revenue 15.5% 26.5% 19.3% 23.4%
----------------------------------------------------------------------------
Well servicing
statistics:
Number of service
rigs (end of
period) 214 207 3.4 214 207 3.4
Service rig
operating
hours(2) 77,234 88,131 (12.4) 294,681 317,418 (7.2)
Service rig
operating hour
utilization 39% 43% 38% 39%
Service rig
revenue per
operating
hour(2) $ 740 $ 731 1.2 $ 744 $ 688 8.1
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Prior year comparatives have changed to include United States based rig
activity.
Completion and Production Services segment revenue for the
fourth quarter decreased by 11% from the fourth quarter of 2011 to
$85 million and Adjusted EBITDA decreased by 34% to $22 million.
The decrease in revenue and Adjusted EBITDA is attributable to
decreased activity in all service lines as customers decreased
spending in response to general economic uncertainty.
Well servicing activity decreased 12% from the prior year
quarter, with the fleet generating 77,234 operating hours in the
fourth quarter of 2012 compared with 88,131 hours in the prior year
quarter for utilization of 39% and 43%, respectively. The decrease
was a result of decreased service rig activity due to reduced
completion and production work on oil wells. Approximately 95% of
the fourth quarter service rig activity was oil related.
Precision's rental division activity was 38% lower than the prior
year comparative period primarily due to lower completion and frac
related activity in the industry offset by new equipment added to
the fleet.
Average service rig revenue increased $9 per operating hour from
the prior year period to $740 primarily due to the start-up of coil
tubing activity in 2012 which operates at higher rates.
Operating costs as a percentage of revenue increased to 70% in
the fourth quarter of 2012 from 61% in the same period of 2011.
Operating costs per service rig operating hour increased over the
comparable period in 2011 due primarily to higher fuel costs and
coil tubing operations.
Depreciation in the Completion and Production Services segment
in the fourth quarter of 2012 was 33% higher than the prior year
due to higher per unit depreciation expense associated with new
equipment and losses on asset disposals in the current quarter. The
well servicing division uses the unit of production method of
calculating depreciation while the other product lines within the
Completion and Production Services segment use the straight-line
method.
SEGMENT REVIEW OF CORPORATE AND OTHER
Precision views its corporate segment as support functions that
provide assistance to more than one segment. The Corporate and
other segment had an Adjusted EBITDA loss of $17 million for the
fourth quarter of 2012, $3 million lower than the prior year
comparative period due to lower share based performance incentive
costs and lower costs as a result of the decrease in activity.
OTHER ITEMS
Net financial charges for the quarter were $22 million an
increase of $3 million from the fourth quarter of 2011 primarily
due to a one-time gain in 2011.
The Corporation had a foreign exchange gain of $2 million during
the fourth quarter of 2012 due to the weakening of the Canadian
dollar versus the U.S. dollar and the impact thereof on the net
U.S. dollar denominated monetary position in the Canadian
dollar-based companies.
Income taxes for the quarter were $51 million lower than the
prior year primarily as a result of reduced operating results and
income taxed at lower rates.
LIQUIDITY AND CAPITAL RESOURCES
The oilfield services business is inherently cyclical in nature.
Precision employs a disciplined approach to minimize costs through
operational management practices and a variable cost structure, and
to maximize revenues through term contract positions with a focus
on maintaining a strong balance sheet. This operational discipline
provides Precision with the financial flexibility to capitalize on
strategic acquisitions and internal growth opportunities at all
points in the business cycle.
Operating within a highly variable cost structure, Precision's
maintenance capital expenditures are tightly governed by and highly
responsive to activity levels with additional cost savings leverage
provided through Precision's internal manufacturing and supply
divisions. Expansion capital for new build rig programs require two
to five year term contracts in order to mitigate capital recovery
risk.
Liquidity remains sufficient as Precision had a cash balance of
$153 million and the US$850 million senior secured revolving credit
facility ("Secured Facility") remains undrawn except for US$27
million in outstanding letters of credit as at December 31, 2012.
In addition to the Secured Facility, Precision has available $55
million in secured operating facilities, excluding letters of
credit of $19 million, which are used for working capital
management and a $25 million secured letter of credit facility.
As at December 31, 2012 and 2011 Precision had the following
long-term debt balances:
(Stated in thousands of Canadian dollars) December 31, December 31,
2012 2011
----------------------------------------------------------------------------
Senior secured revolving credit facility $ - $ -
Unsecured senior notes:
6.625% senior notes due 2020 (US$650
million) 646,685 661,050
6.5% senior notes due 2021 (US$400
million) 397,960 406,800
6.5% senior notes due 2019 200,000 200,000
----------------------------------------------------------------------------
1,244,645 1,267,850
Less net unamortized debt issue costs (25,849) (28,234)
----------------------------------------------------------------------------
$ 1,218,796 $ 1,239,616
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at December 31, 2012, the Corporation was in compliance with
the covenants under the Secured Facility. Precision expects to
remain in compliance with financial covenants under its Secured
Facility and have full access to credit lines during 2013.
The current blended cash interest cost of Precision's debt is
approximately 6.6%.
Precision has designated its U.S. dollar denominated long-term
debt as a hedge of its investment in its United States operations.
To be accounted for as a hedge, the foreign currency denominated
long-term debt must be designated and documented as such and must
be effective at inception and on an ongoing basis.
The following tables reconcile the weighted average shares
outstanding used in computing basic and diluted earnings (loss) per
share:
Three months ended
December 31, Year ended December 31,
2012 2011 2012 2011
----------------------------------------------------------------------------
Weighted average shares
outstanding - basic 276,372 276,073 276,276 275,899
Effect of warrants 8,661 10,610 9,418 11,106
Effect of share options and
other equity compensation
plans 780 1,258 933 1,711
----------------------------------------------------------------------------
Weighted average shares
outstanding - diluted 285,813 287,941 286,627 288,716
----------------------------------------------------------------------------
----------------------------------------------------------------------------
QUARTERLY FINANCIAL SUMMARY
(Stated in thousands of Canadian dollars, except per share amounts)
2012
----------------------------------------------------------------------------
Quarters ended March 31 June 30 September 30 December 31
----------------------------------------------------------------------------
Revenue $ 640,066 $ 381,966 $ 484,761 $ 533,948
Adjusted EBITDA(1) 245,574 97,192 151,000 177,026
Net earnings (loss): 111,081 18,261 39,357 (116,339)
Per basic share 0.40 0.07 0.14 (0.42)
Per diluted share 0.39 0.06 0.14 (0.42)
Funds provided by
operations(1) 247,739 62,373 146,124 142,576
Cash provided by
operations 162,440 275,346 61,183 136,317
----------------------------------------------------------------------------
2011
----------------------------------------------------------------------------
Quarters ended March 31 June 30 September 30 December 31
----------------------------------------------------------------------------
Revenue $ 525,350 $ 345,325 $ 492,944 $ 587,408
Adjusted EBITDA(1) 186,411 92,566 186,248 229,839
Net earnings: 65,560 16,403 83,468 28,046
Per basic share 0.24 0.06 0.30 0.10
Per diluted share 0.23 0.06 0.29 0.10
Funds provided by
operations(1) 192,337 70,766 73,182 256,103
Cash provided by
operations 117,322 176,312 20,281 218,857
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
ADDITIONAL GAAP MEASURES
Precision uses certain additional GAAP measures that are not
defined terms under IFRS to assess performance and believes these
measures provide useful supplemental information to investors. The
following are the measures Precision uses in assessing
performance.
Adjusted EBITDA
Management believes that in addition to net earnings (loss),
earnings before income taxes, financing charges, foreign exchange,
impairment of goodwill, loss on asset decommissioning and
depreciation and amortization ("Adjusted EBITDA"), as derived from
information reported in the Consolidated Statements of Earnings
(Loss), is a useful supplemental measure as it provides an
indication of the results generated by Precision's principal
business activities prior to consideration of how those activities
are financed, the impact of foreign exchange, how the results are
taxed or how depreciation and amortization and asset impairment
charges affect results.
Operating Earnings (Loss)
Management believes that in addition to net earnings (loss),
operating earnings (loss) as reported in the Consolidated
Statements of Earnings (Loss) is a useful supplemental measure as
it provides an indication of the results generated by Precision's
principal business activities prior to consideration of how those
activities are financed, the impact of foreign exchange or how the
results are taxed.
Funds Provided by Operations
Management believes that in addition to cash provided by
operations, funds provided by operations, as reported in the
Consolidated Statements of Cash Flow is a useful supplemental
measure as it provides an indication of the funds generated by
Precision's principal business activities prior to consideration of
working capital, which is primarily made up of highly liquid
balances.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND
STATEMENTS
Certain statements contained in this report, including
statements that contain words such as "could", "should", "can",
"anticipate", "estimate", "intend", "plan", "expect", "believe",
"will", "may", "continue", "project", "potential" 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 statements").
In particular, forward-looking information and statements
include, but are not limited to, the following: the two 2000 HP
rigs contracted for deep drilling operations in Kurdistan are
expected to be deployed mid 2013 under a long-term contract;
Precision signed a customer contract for operations in Mexico that
will add one additional rig to its Mexican fleet during the second
quarter of 2013; by mid-2014, we expect to have seven rigs
operating in the Arabian Gulf region and believe additional
opportunities will emerge; amount and use of planned capital
expenditures; if activity levels increase or decline, Precision can
adjust the capital plan; Precision expects to have six rigs running
in Mexico and five rigs running in the Middle East by the end of
the second quarter of 2013 with two Kuwait rigs to be added to the
fleet in early 2014; Precision believes its customers' long-term
focus and the growing number of unconventional and technically
challenging oil drilling opportunities provide the foundation to
grow its active rig count; Precision believes that throughout 2013,
it will effectively utilize its people, sizeable equipment base and
proven systems to reduce operating costs and expand operating
margins; Precision expects its active rig count in the United
States to remain flat over the coming months and it expects to grow
from eight rigs to 11 rigs internationally; Precision expects
strong levels of market activity to continue during the first
quarter until spring break-up and expects to benefit from the fleet
enhancements made throughout 2012 in the form of higher activity
levels; Precision will retain 26 legacy drilling rigs for seasonal,
stratification and turnkey drilling work; Precision's expected
capital expenditures for 2013; Precision expects that the $526
million will be split $434 million for the Contract Drilling
segment and $92 million for the Completion and Production Services
segment; if low natural gas prices continue, Precision and the
North American drilling industry could see further reduction in
demand for natural gas drilling; Precision believes that the
"retooling" of the industry wide fleet will result in the virtual
obsolescence of Tier 3 rigs in North American markets over the next
few years; and the payment of dividends pursuant to Precision's
dividend plan.
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. 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; fluctuations in the demand
for contract drilling, well servicing and ancillary oilfield
services; capital market liquidity available to fund customer
drilling programs; availability of cash flow, debt and/or equity
sources to fund the Corporation's capital and operating
requirements, as needed; sustainability of our dividend; the
effects of seasonal and weather conditions on operations and
facilities; the existence of competitive operating risks inherent
in its businesses; general economic, market or business conditions;
changes in laws or regulations; the availability of qualified
personnel, management or other key inputs; currency exchange
fluctuations; and other unforeseen conditions which could impact
the use of services supplied by Precision and Precision's ability
to respond to such conditions.
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.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Stated in thousands of Canadian December December 31,
dollars) 31,2012 2011
----------------------------------------------------------------------------
ASSETS
Current assets:
Cash $ 152,768 $ 467,476
Accounts receivable 509,547 576,243
Inventory 13,787 7,163
----------------------------------------------------------------------------
Total current assets 676,102 1,050,882
Non-current assets:
Income tax recoverable 64,579 64,579
Property, plant and equipment 3,242,929 2,942,296
Intangibles 6,101 6,471
Goodwill 310,552 363,646
----------------------------------------------------------------------------
Total non-current assets 3,624,161 3,376,992
----------------------------------------------------------------------------
Total assets $ 4,300,263 $ 4,427,874
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 333,893 $ 436,667
Income tax payable 64,188 3,786
----------------------------------------------------------------------------
Total current liabilities 398,081 440,453
Non-current liabilities:
Share based compensation 8,676 11,303
Provisions and other 17,818 16,121
Long-term debt 1,218,796 1,239,616
Deferred tax liabilities 485,592 587,790
----------------------------------------------------------------------------
Total non-current liabilities 1,730,882 1,854,830
Shareholders' equity:
Shareholders' capital 2,251,982 2,248,217
Contributed surplus 24,474 18,396
Deficit (44,621) (83,160)
Accumulated other comprehensive loss (60,535) (50,862)
----------------------------------------------------------------------------
Total shareholders' equity 2,171,300 2,132,591
----------------------------------------------------------------------------
Total liabilities and shareholders'
equity $ 4,300,263 $ 4,427,874
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED)
Three months ended Year ended
December 31, December 31,
(Stated in thousands of
Canadian dollars, except
per share amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Revenue $ 533,948 $ 587,408 $ 2,040,741 $ 1,951,027
Expenses:
Operating 326,806 321,756 1,243,301 1,131,022
General and
administrative 30,116 35,813 126,648 124,941
----------------------------------------------------------------------------
Earnings before income
taxes, finance charges,
foreign exchange,
impairment of goodwill,
loss on asset
decommissioning and
depreciation and
amortization (Adjusted
EBITDA) 177,026 229,839 670,792 695,064
Depreciation and
amortization 89,278 71,067 307,525 251,483
Loss on asset
decommissioning 192,469 114,893 192,469 114,893
----------------------------------------------------------------------------
Operating earnings (loss) (104,721) 43,879 170,798 328,688
Impairment of goodwill 52,539 - 52,539 -
Foreign exchange (1,857) 7,626 3,753 (23,674)
Finance charges 22,107 18,638 86,829 111,578
----------------------------------------------------------------------------
Earnings (loss) before tax (177,510) 17,615 27,677 240,784
Income taxes:
Current 23,416 2,897 70,576 43,779
Deferred (84,587) (13,328) (95,259) 3,528
----------------------------------------------------------------------------
(61,171) (10,431) (24,683) 47,307
----------------------------------------------------------------------------
Net earnings (loss) $ (116,339) $ 28,046 $ 52,360 $ 193,477
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings(loss) per share:
Basic $ (0.42) $ 0.10 $ 0.19 $ 0.70
Diluted $ (0.42) $ 0.10 $ 0.18 $ 0.67
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three months ended Year ended
December 31, December 31,
(Stated in thousands of
Canadian dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net earnings (loss) $ (116,339) $ 28,046 $ 52,360 $ 193,477
Unrealized gain (loss) on
translation of assets and
liabilities of operations
denominated in foreign
currency 16,598 (26,815) (32,878) 33,050
Foreign exchange gain
(loss) on net investment
hedge with U.S.
denominated debt, net of
tax ($nil; 2011 - $2,148
recovery) (10,228) 25,143 23,205 (37,692)
----------------------------------------------------------------------------
Comprehensive income (loss)$ (109,969) $ 26,374 $ 42,687 $ 188,835
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three months ended Year ended
December 31, December 31,
(Stated in thousands of
Canadian dollars) 2012 2011 2012 2011
----------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Net earnings (loss) $ (116,339) $ 28,046 $ 52,360 $ 193,477
Adjustments for:
Long-term compensation
plans 4,293 5,399 19,350 20,555
Depreciation and
amortization 89,278 71,067 307,525 251,483
Loss on asset
decommissioning 192,469 114,893 192,469 114,893
Impairment of goodwill 52,539 - 52,539 -
Foreign exchange (1,689) 7,366 4,403 (24,330)
Finance charges 22,107 18,638 86,829 111,578
Income taxes (61,171) (10,431) (24,683) 47,307
Other (1,019) (1,494) 1,018 (2,564)
Income taxes paid (3,088) (13,516) (10,403) (124,682)
Income taxes recovered 108 82,483 721 82,883
Interest paid (35,287) (47,256) (85,251) (79,902)
Interest received 375 908 1,935 1,690
----------------------------------------------------------------------------
Funds provided by
operations 142,576 256,103 598,812 592,388
Changes in non-cash working
capital balances (6,259) (37,246) 36,474 (59,616)
----------------------------------------------------------------------------
136,317 218,857 635,286 532,772
Investments:
Business acquisitions, net
of cash acquired - - (25) (92,886)
Purchase of property,
plant and equipment (186,650) (327,987) (868,057) (726,357)
Proceeds on sale of
property, plant and
equipment 17,603 7,289 31,423 15,983
Changes in non-cash
working capital balances (31,052) 77,161 (93,462) 87,798
----------------------------------------------------------------------------
(200,099) (243,537) (930,121) (715,462)
Financing:
Repayment of long-term
debt - - - (175,000)
Premium paid on settlement
of unsecured senior notes - - - (26,688)
Debt issue costs - 1 (2,855) (13,303)
Debt facility amendment
costs - - (149) (1,134)
Dividends paid (13,821) - (13,821) -
Increase in long-term debt - - - 581,520
Issuance of common shares
on the exercise of
options 436 138 1,926 2,238
Changes in non-cash
working capital balances - - - (746)
----------------------------------------------------------------------------
(13,385) 139 (14,899) 366,887
----------------------------------------------------------------------------
Effect of exchange rate
changes on cash and cash
equivalents 3,094 (9,128) (4,974) 26,448
----------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents (74,073) (33,669) (314,708) 210,645
Cash and cash equivalents,
beginning of period 226,841 501,145 467,476 256,831
----------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 152,768 $ 467,476 $ 152,768 $ 467,476
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
Accumulated
other
(Stated in thousands of Shareholders' Contributed comprehensive
Canadian dollars) capital surplus loss
----------------------------------------------------------------------------
Balance at January 1, 2012 $ 2,248,217 $ 18,396 $ (50,862)
Net earnings for the period - - -
Other comprehensive loss for
the period - - (9,673)
Dividends - - -
Share options exercised 3,050 (1,124) -
Issued on redemption of non-
management directors DSUs 706 (706) -
Issued on waiver of right to
dissent by dissenting
unitholder 9 (3) -
Share based compensation
expense - 7,911 -
----------------------------------------------------------------------------
Balance at December 31, 2012 $ 2,251,982 $ 24,474 $ (60,535)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Stated in thousands of Total
Canadian dollars) Deficit equity
----------------------------------------------------------------------------
Balance at January 1, 2012 $ (83,160) $ 2,132,591
Net earnings for the period 52,360 52,360
Other comprehensive loss for
the period - (9,673)
Dividends (13,821) (13,821)
Share options exercised - 1,926
Issued on redemption of non-
management directors DSUs - -
Issued on waiver of right to
dissent by dissenting
unitholder - 6
Share based compensation
expense - 7,911
----------------------------------------------------------------------------
Balance at December 31, 2012 $ (44,621) $ 2,171,300
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accumulated
other
(Stated in thousands of Shareholders' Contributed comprehensive
Canadian dollars) capital surplus loss
----------------------------------------------------------------------------
Balance at January 1, 2011 $ 2,244,417 $ 11,266 $ (46,220)
Net earnings for the period - - -
Other comprehensive loss for
the period - - (4,642)
Share options exercised 3,416 (1,178) -
Issued on redemption of non-
management directors DSUs 384 (384) -
Share based compensation
expense - 8,692 -
----------------------------------------------------------------------------
Balance at December 31, 2011 $ 2,248,217 $ 18,396 $ (50,862)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Stated in thousands of Total
Canadian dollars) Deficit equity
----------------------------------------------------------------------------
Balance at January 1, 2011 $ (276,637) $ 1,932,826
Net earnings for the period 193,477 193,477
Other comprehensive loss for
the period - (4,642)
Share options exercised - 2,238
Issued on redemption of non-
management directors DSUs - -
Share based compensation
expense - 8,692
----------------------------------------------------------------------------
Balance at December 31, 2011 $ (83,160) $ 2,132,591
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FOURTH QUARTER AND YEAR END 2012 EARNINGS CONFERENCE CALL AND
WEBCAST
Precision Drilling Corporation has scheduled a conference call
and webcast to begin promptly at 12:00 noon MT (2:00 p.m. ET) on
Thursday, February 14, 2013.
The conference call dial in numbers are 1-877-240-9772 or
416-340-8530
A live webcast of the conference call will be accessible on
Precision's website at www.precisiondrilling.com by selecting
"Investor Centre", then "Webcasts". Shortly after the live webcast,
an archived version will be available for approximately 30
days.
An archived recording of the conference call will be available
approximately one hour after the completion of the call until
February 21, 2013 by dialing 1-800-408-3053 or 905-694-9451, pass
code 2351454.
About Precision
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 & 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".
Contacts: Precision Drilling Corporation Carey Ford Vice
President, Finance and Investor Relations 403.716.4575 403.716.4755
(FAX) Suite 800, 525 - 8th Avenue S.W. Calgary, Alberta, Canada T2P
1G1 www.precisiondrilling.com
Grafico Azioni Precision Drilling (NYSE:PDS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Precision Drilling (NYSE:PDS)
Storico
Da Lug 2023 a Lug 2024
