By April 25, 2016 Read More →

Precision Drilling posts C$19.9 million quarterly loss

Precision Drilling says since downturn began it has had nine contract cancellations

Precision Drilling

Precision Drilling CEO Kevin Neveu says the company is changing gears from cost reductions and downsizing to stabilization and preparation for a rebound in oil prices.

April 25 (Reuters) – Canadian rig contractor Precision Drilling Corp posted a first-quarter loss, compared with a profit a year earlier, hurt by lower demand for rigs amid a prolonged slump in oil prices.

The company said it received about C$23 million ($18 million) in the quarter for the cancellation of five rig contract in the United States and in Canada.

Precision Drilling has now recorded a total of nine contract cancellations since the downturn started towards the end of 2014.

“While the timing for a potential rebound remains uncertain, we are turning our minds from cost reduction and downsizing to stabilization and preparation for a rebound,” Chief Executive Kevin Neveu said in a statement on Monday.

Precision Drilling said it would deliver two rigs in Kuwait one quarter ahead of schedule and expects to commission them in the fourth quarter.

The company suspended its dividend in February in order to strengthen liquidity during the downturn.

The company lost C$19.9 million, or 7 Canadian cents per share, in the three months ended March 31. It earned C$24 million, or 8 Canadian cents per share, a year earlier.

Precision Drilling’s revenue fell 41 percent to C$301.7 million in the latest quarter. ($1 = C$1.27)

(Reporting by Vishaka George in Bengaluru; Editing by Savio D’Souza)

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