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Name | Symbol | Market | Type |
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Precision Drilling Corporation New | NYSE:PDS | NYSE | Trust |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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-0.10 | -0.14% | 70.34 | 71.40 | 70.22 | 70.76 | 34,013 | 22:39:24 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2023
Commission File Number: 001-14534
Precision Drilling Corporation
(Exact name of registrant as specified in its charter)
800, 525 - 8 Avenue S.W.
Calgary, Alberta
Canada T2P 1G1
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [ X ]
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Precision Drilling Corporation | ||
(Registrant) | ||
Date: October 26, 2023 | /s/ Carey T Ford | |
Carey T Ford | ||
Chief Financial Officer | ||
Exhibit | DESCRIPTION | |
99.1 | PRECISION DRILLING ANNOUNCES 2023 THIRD QUARTER UNAUDITED FINANCIAL RESULTS |
EXHIBIT 99.1
Precision Drilling Announces 2023 Third Quarter Unaudited Financial Results
CALGARY, Alberta, Oct. 26, 2023 (GLOBE NEWSWIRE) -- 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. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, loss (gain) on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see “Financial Measures and Ratios” later in this news release.
Precision Drilling announces strong 2023 third quarter financial results:
(1) See “FINANCIAL MEASURES AND RATIOS.”
Precision’s President and CEO, Kevin Neveu, stated:
“Precision’s third quarter financial results and recent customer contracting demonstrate strong demand for our Super Series rigs, AlphaTM technologies, and EverGreenTM products. The North American land drilling market has matured with participants demonstrating capital discipline and operators rewarding the highest performance drilling contractors.
“Our Canadian business continues to showcase this trend. While Canada’s industry activity during the third quarter was 6% lower than the same period last year, utilization of Precision’s Super Triple and Super Single rigs was up year over year, with 29 Super Triples and 32 Super Singles active during the quarter. Despite customer capital discipline and lower industry activity, customer demand for Super-Spec rigs has never been higher and we continue to strengthen our contract book. Since the end of the second quarter, we have added thirteen term contracts with take-or-pay provisions for our Super Triples and customer-funded upgrades for our Super Singles. The outlook for Canada remains encouraging with 67 rigs active today, significant oil and natural gas pipeline takeaway capacity coming online in early 2024, and current customer conversations indicating incremental demand for Super Triple and Super Single drilling programs in 2024.
“In the U.S., our rig count was stable throughout the third quarter, and we currently have 44 rigs active. Customer interest in AlphaTM digital technologies and our EverGreenTM suite of environmental solutions remains strong, with virtually all our U.S. Super Triple rigs utilizing AlphaAutomationTM and 60% generating incremental revenue from EverGreenTM products. With firm oil prices and a new budget cycle, we expect customer outlook to improve and drive more drilling activity later this year and into 2024.
“Internationally, we currently have seven rigs running and expect to activate our eighth rig within the next few weeks. With our additional rig activations this year, we expect our 2024 international earnings to increase by approximately 50% over 2023, and should remain at this higher level for the next several years as our recent contract awards are under five-year terms.
“During the third quarter, our Adjusted EBITDA was $115 million and excluding our share-based compensation of $31 million increased year over year. This increase was driven by our Canadian drilling operations where strong fundamentals continue to support improving returns. Net earnings were $20 million for the quarter and year to date we have delivered earnings of $10.45 on a per share basis.
“Cash generated from operations during the third quarter was $89 million compared to $8 million last year, reflecting the efforts of our team to focus on cash generation. Year to date, we have reduced our total debt by $126 million and returned $13 million to shareholders through share repurchases and are well on track to achieve the targets we set at the beginning of the year. With strong demand for our Super Series rigs, we are increasing our 2023 capital budget by $20 million to support customer-funded rig upgrades and the purchase of certain long-lead items.
“In September, we announced the acquisition of CWC, which will position Precision as the premier well service provider in Canada and bolster our drilling operations in both the U.S. and Canada. We expect to realize $20 million in operational synergies and generate accretive cash flow on a per share basis in 2024.
“I am proud of the discipline Precision continues to show throughout the organization despite short-term industry cyclicality. We remain focused on our strategic priorities, which include delivering operational excellence, maximizing free cash flow, and improving our balance sheet. With a focused strategy and discipline, I am confident Precision will continue to deliver increased shareholder value,” concluded Mr. Neveu.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights | |||||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
(Stated in thousands of Canadian dollars, except per share amounts) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||
Revenue | 446,754 | 429,335 | 4.1 | 1,430,983 | 1,106,690 | 29.3 | |||||||||||||||||
Adjusted EBITDA(1) | 114,575 | 119,561 | (4.2 | ) | 459,887 | 220,515 | 108.6 | ||||||||||||||||
Net earnings (loss) | 19,792 | 30,679 | (35.5 | ) | 142,522 | (37,776 | ) | (477.3 | ) | ||||||||||||||
Cash provided by operations | 88,500 | 8,142 | 987.0 | 330,316 | 78,022 | 323.4 | |||||||||||||||||
Funds provided by operations(1) | 91,608 | 81,327 | 12.6 | 388,220 | 171,655 | 126.2 | |||||||||||||||||
Cash used in investing activities | 34,278 | 31,711 | 8.1 | 157,157 | 98,836 | 59.0 | |||||||||||||||||
Capital spending by spend category(1) | |||||||||||||||||||||||
Expansion and upgrade | 13,479 | 25,461 | (47.1 | ) | 39,439 | 50,606 | (22.1 | ) | |||||||||||||||
Maintenance and infrastructure | 38,914 | 25,642 | 51.8 | 108,463 | 76,335 | 42.1 | |||||||||||||||||
Proceeds on sale | (6,698 | ) | (22,337 | ) | (70.0 | ) | (20,724 | ) | (32,033 | ) | (35.3 | ) | |||||||||||
Net capital spending(1) | 45,695 | 28,766 | 58.9 | 127,178 | 94,908 | 34.0 | |||||||||||||||||
Net earnings (loss) per share: | |||||||||||||||||||||||
Basic | 1.45 | 2.26 | (35.8 | ) | 10.45 | (2.79 | ) | (474.6 | ) | ||||||||||||||
Diluted | 1.45 | 2.03 | (28.6 | ) | 9.84 | (2.79 | ) | (452.7 | ) |
(1) See “FINANCIAL MEASURES AND RATIOS.”
Operating Highlights | |||||||||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||
Contract drilling rig fleet | 224 | 225 | (0.4 | ) | 224 | 225 | (0.4 | ) | |||||||||||||||
Drilling rig utilization days: | |||||||||||||||||||||||
U.S. | 3,815 | 5,287 | (27.8 | ) | 13,823 | 14,914 | (7.3 | ) | |||||||||||||||
Canada | 5,284 | 5,432 | (2.7 | ) | 15,247 | 14,461 | 5.4 | ||||||||||||||||
International | 554 | 552 | 0.4 | 1,439 | 1,638 | (12.1 | ) | ||||||||||||||||
Revenue per utilization day: | |||||||||||||||||||||||
U.S. (US$) | 35,135 | 27,847 | 26.2 | 35,216 | 25,864 | 36.2 | |||||||||||||||||
Canada (Cdn$) | 32,224 | 26,927 | 19.7 | 32,583 | 25,843 | 26.1 | |||||||||||||||||
International (US$) | 51,570 | 50,216 | 2.7 | 51,306 | 51,687 | (0.7 | ) | ||||||||||||||||
Operating costs per utilization day: | |||||||||||||||||||||||
U.S. (US$) | 21,655 | 18,220 | 18.9 | 20,217 | 18,484 | 9.4 | |||||||||||||||||
Canada (Cdn$) | 18,311 | 16,893 | 8.4 | 19,239 | 16,803 | 14.5 | |||||||||||||||||
Service rig fleet | 121 | 135 | (10.4 | ) | 121 | 135 | (10.4 | ) | |||||||||||||||
Service rig operating hours | 46,894 | 52,340 | (10.4 | ) | 144,944 | 120,994 | 19.8 |
Financial Position | ||||||||
(Stated in thousands of Canadian dollars, except ratios) | September 30, 2023 | December 31, 2022 | ||||||
Working capital(1) | 177,740 | 60,641 | ||||||
Cash | 49,065 | 21,587 | ||||||
Long-term debt | 963,827 | 1,085,970 | ||||||
Total long-term financial liabilities | 1,054,661 | 1,206,619 | ||||||
Total assets | 2,808,201 | 2,876,123 | ||||||
Long-term debt to long-term debt plus equity ratio (1) | 0.41 | 0.47 |
(1) See “FINANCIAL MEASURES AND RATIOS.”
Summary for the three months ended September 30, 2023:
Summary for the nine months ended September 30, 2023:
STRATEGY
Precision’s vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities that we establish at the beginning of every year.
Precision’s 2023 strategic priorities and the progress made during the third quarter and year to date are as follows:
(1) See “FINANCIAL MEASURES AND RATIO.”
OUTLOOK
Energy industry fundamentals continue to support drilling activity for oil and natural gas despite economic uncertainty and geopolitical instability. During the third quarter, persistent challenges and stresses from interest rate hikes and recessionary risks began to weaken, and commodity prices moved higher. While the recent conflict in the Middle East has had little direct impact on global oil and natural gas supply, an escalation of events and involvement from additional regional powers could disrupt supply in the world’s top oil producing region.
Today, oil prices are supported by increasing global demand and limited supply growth as OPEC continues to honour its lower production quotas and producers remain committed to returning capital to shareholders versus increasing production. Natural gas has demonstrated short-term price weaknesses; however, this lower-carbon energy source is becoming increasingly favored as countries around the world stress the importance of sustainability, decarbonization and energy security. With demand for Liquefied Natural Gas (LNG) exports grog and the next wave of North American LNG projects expected to begin coming online in 2025 (including LNG Canada), we anticipate a sustained period of elevated natural gas drilling activity in both the U.S. and Canada.
In Canada, Precision’s year to date drilling activity has surpassed 2022 levels and we expect high activity levels to continue into 2024, due to strong oil prices and increases in hydrocarbon export capacity. The Trans Mountain oil pipeline expansion and the Coastal GasLink pipeline are each expected to begin operations in the first quarter of 2024. Northwestern Alberta and Northeastern British Columbia natural gas developments are prime beneficiaries of the LNG Canada project and the January 2023 agreement between the Government of British Columbia and the Blueberry River First Nation, which has facilitated a significant increase in drilling license approvals and should lead to more drilling activity in the region. Large pad drilling programs are ideally suited for our Super Triple rigs, resulting in strong customer interest for these rigs for the next several years. Our Super Triple fleet is currently fully utilized and we expect customer demand to continue to exceed supply, driving higher day rates, daily operating margins and longer-term take-or-pay contracts. We are currently upgrading one of our Canadian rigs and expect to add it to our Super Triple Canadian fleet in January 2024 on a three-year term contract, bringing our fleet size to 30.
In the Canadian heavy oil market, we expect activity levels to remain strong as Canadian producers are benefiting from favorable oil pricing due to a weaker Canadian dollar exchange rate and improving heavy oil differentials. Precision’s Super Single rigs are well suited for long-term conventional heavy oil development in the oil sands and Clearwater formation. We expect our Super Single pad-capable rigs to be fully utilized well into 2024, driving higher day rates.
In the U.S., drilling activity had been increasing since mid-2020 but began to weaken in early 2023 due to lower natural gas prices and oil price volatility. As at October 25, 2023, the Baker Hughes’ active U.S. land rig count declined 21% from the start of the year. If oil prices remain stable and around today’s level, we expect demand to improve late in the fourth quarter and gain momentum in 2024 as customers embark on a new budget cycle and seek to maintain or possibly increase production levels and replenish inventories.
Our Alpha technologies and EverGreen suite of environmental solutions continue to gain momentum and have become key competitive differentiators for our rigs as these offerings deliver exceptional value to our customers by reducing risks, well construction costs and carbon footprint. We currently have 11 EverGreen BESS deployed in the field and have commitments for two additional deployments by year end. Precision’s EverGreen BESS have proven to be an economically viable emissions reduction solution for our customers and we anticipate continued demand for additional deployments in 2024.
Internationally, we currently have seven rigs working on term contracts, four in Kuwait and three in the Kingdom of Saudi Arabia, increasing to eight in the next few weeks. In 2024, our international earnings are expected to increase approximately 50% over 2023 levels and provide stable and predictable cash flow that stretches into 2028. We continue to bid our remaining idle rigs within the region and remain optimistic about our ability to secure rig reactivations.
Precision is the leading provider of high-quality and reliable well services in Canada and the outlook for this business is positive. High customer demand for well maintenance and completion services is expected to add tightness to the availability of staffed service rigs, supporting healthy activity and pricing into the foreseeable future. In September, Precision announced the acquisition of CWC, which will allow us to enhance our Canadian well service offering with high-quality rigs in complementary geographic regions. The acquisition is expected to close in the fourth quarter of 2023 and provide accretive cash flow on a per share basis in 2024.
Contracts
The following chart outlines the average number of drilling rigs under term contract by quarter as at October 25, 2023. For those quarters ending after September 30, 2023, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.
Average for the quarter ended 2022 | Average for the quarter ended 2023 | |||||||||||||||||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | Mar. 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||||||||||||||
Average rigs under term contract as of October 25, 2023: | ||||||||||||||||||||||||||||||||
U.S. | 27 | 29 | 31 | 35 | 40 | 37 | 32 | 28 | ||||||||||||||||||||||||
Canada | 6 | 8 | 10 | 16 | 19 | 23 | 23 | 21 | ||||||||||||||||||||||||
International | 6 | 6 | 6 | 6 | 4 | 5 | 7 | 8 | ||||||||||||||||||||||||
Total | 39 | 43 | 47 | 57 | 63 | 65 | 62 | 57 | ||||||||||||||||||||||||
The following chart outlines the average number of drilling rigs that we had under term contract for 2022 and the average number of rigs we have under term contract as at October 25, 2023.
Average for the year ended | ||||||||||
2022 | 2023 | |||||||||
Average rigs under term contract as of October 25, 2023: | ||||||||||
U.S. | 31 | 34 | ||||||||
Canada | 10 | 22 | ||||||||
International | 6 | 6 | ||||||||
Total | 47 | 62 | ||||||||
In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. Accordingly, our anticipated Canadian rigs under term contract may fluctuate as customers complete their commitments earlier than projected. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year. Internationally, we expect to have eight rigs operating under long-term contract by the end of 2023.
Drilling Activity
The following chart outlines the average number of drilling rigs that we had working or moving by quarter for the periods noted.
Average for the quarter ended 2022 | Average for the quarter ended 2023 | ||||||||||||||||||||||||||
Mar. 31 | June 30 | Sept. 30 | Dec. 31 | Mar. 31 | June 30 | Sept. 30 | |||||||||||||||||||||
Average Precision active rig count: | |||||||||||||||||||||||||||
U.S. | 51 | 55 | 57 | 60 | 60 | 51 | 41 | ||||||||||||||||||||
Canada | 63 | 37 | 59 | 66 | 69 | 42 | 57 | ||||||||||||||||||||
International | 6 | 6 | 6 | 6 | 5 | 5 | 6 | ||||||||||||||||||||
Total | 120 | 98 | 122 | 132 | 134 | 98 | 104 | ||||||||||||||||||||
According to industry sources, as at October 25, 2023, the U.S. active land drilling rig count has decreased 21% from the same point last year while the Canadian active land drilling rig count has decreased 6%. To date in 2023, approximately 79% of the U.S. industry’s active rigs and 59% of the Canadian industry’s active rigs were drilling for oil targets, compared with 79% for the U.S. and 63% for Canada at the same time last year.
Capital Spending and Free Cash Flow Allocation
We remain committed to disciplined cash flow management, capital spending and returning capital to shareholders. In response to increased customer contracted rig upgrades and to facilitate the strategic purchase of certain long-lead items, capital spending in 2023 is expected to increase by $20 million to $215 million. By spend category, we expect to incur $155 million for sustaining, infrastructure and intangibles and $60 million for expansion and upgrades. We expect that the $215 million will be split as follows: $201 million in the Contract Drilling Services segment, $11 million in the Completion and Production Services segment, and $3 million in the Corporate segment. As at September 30, 2023, Precision had capital commitments of approximately $229 million with payments expected through 2026.
SEGMENTED FINANCIAL RESULTS
Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rig, oilfield supply and manufacturing divisions; and Completion and Production Services, which includes our service rig, rental and camp and catering divisions.
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||
Revenue: | |||||||||||||||||||||||
Contract Drilling Services | 390,728 | 374,465 | 4.3 | 1,257,762 | 982,909 | 28.0 | |||||||||||||||||
Completion and Production Services | 57,573 | 56,642 | 1.6 | 178,257 | 127,921 | 39.3 | |||||||||||||||||
Inter-segment eliminations | (1,547 | ) | (1,772 | ) | (12.7 | ) | (5,036 | ) | (4,140 | ) | 21.6 | ||||||||||||
446,754 | 429,335 | 4.1 | 1,430,983 | 1,106,690 | 29.3 | ||||||||||||||||||
Adjusted EBITDA:(1) | |||||||||||||||||||||||
Contract Drilling Services | 131,701 | 118,599 | 11.0 | 468,302 | 260,202 | 80.0 | |||||||||||||||||
Completion and Production Services | 14,118 | 14,788 | (4.5 | ) | 39,031 | 26,166 | 49.2 | ||||||||||||||||
Corporate and Other | (31,244 | ) | (13,826 | ) | 126.0 | (47,446 | ) | (65,853 | ) | (28.0 | ) | ||||||||||||
114,575 | 119,561 | (4.2 | ) | 459,887 | 220,515 | 108.6 |
(1) See “FINANCIAL MEASURES AND RATIOS.”
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
(Stated in thousands of Canadian dollars, except where noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||
Revenue | 390,728 | 374,465 | 4.3 | 1,257,762 | 982,909 | 28.0 | |||||||||||||||||
Expenses: | |||||||||||||||||||||||
Operating | 247,937 | 246,442 | 0.6 | 759,750 | 692,169 | 9.8 | |||||||||||||||||
General and administrative | 11,090 | 9,424 | 17.7 | 29,710 | 30,538 | (2.7 | ) | ||||||||||||||||
Adjusted EBITDA(1) | 131,701 | 118,599 | 11.0 | 468,302 | 260,202 | 80.0 | |||||||||||||||||
Adjusted EBITDA as a percentage of revenue(1) | 33.7 | % | 31.7 | % | 37.2 | % | 26.5 | % |
(1) See “FINANCIAL MEASURES AND RATIOS.”
United States onshore drilling statistics:(1) | 2023 | 2022 | ||||||||||||||
Precision | Industry(2) | Precision | Industry(2) | |||||||||||||
Average number of active land rigs for quarters ended: | ||||||||||||||||
March 31 | 60 | 744 | 51 | 603 | ||||||||||||
June 30 | 51 | 700 | 55 | 687 | ||||||||||||
September 30 | 41 | 631 | 57 | 746 | ||||||||||||
Year to date average | 51 | 692 | 54 | 679 |
(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.
Canadian onshore drilling statistics:(1) | 2023 | 2022 | ||||||||||||||
Precision | Industry(2) | Precision | Industry(2) | |||||||||||||
Average number of active land rigs for quarters ended: | ||||||||||||||||
March 31 | 69 | 221 | 63 | 205 | ||||||||||||
June 30 | 42 | 117 | 37 | 113 | ||||||||||||
September 30 | 57 | 188 | 59 | 199 | ||||||||||||
Year to date average | 56 | 175 | 53 | 172 |
(1) Canadian operations only.
(2) Baker Hughes rig counts.
SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
(Stated in thousands of Canadian dollars, except where noted) | 2023 | 2022 | % Change | 2023 | 2022 | ||||||||||||||||||
Revenue | 57,573 | 56,642 | 1.6 | 178,257 | 127,921 | 39.3 | |||||||||||||||||
Expenses: | |||||||||||||||||||||||
Operating | 41,612 | 40,198 | 3.5 | 133,325 | 96,365 | 38.4 | |||||||||||||||||
General and administrative | 1,843 | 1,656 | 11.3 | 5,901 | 5,390 | 9.5 | |||||||||||||||||
Adjusted EBITDA(1) | 14,118 | 14,788 | (4.5 | ) | 39,031 | 26,166 | 49.2 | ||||||||||||||||
Adjusted EBITDA as a percentage of revenue(1) | 24.5 | % | 26.1 | % | 21.9 | % | 20.5 | % | |||||||||||||||
Well servicing statistics: | |||||||||||||||||||||||
Number of service rigs (end of period) | 121 | 135 | (10.4 | ) | 121 | 135 | (10.4 | ) | |||||||||||||||
Service rig operating hours | 46,894 | 52,340 | (10.4 | ) | 144,944 | 120,994 | 19.8 | ||||||||||||||||
Service rig operating hour utilization | 42 | % | 47 | % | 44 | % | 43 | % |
(1) See “FINANCIAL MEASURES AND RATIOS.”
SEGMENT REVIEW OF CORPORATE AND OTHER
Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA of $31 million as compared with $14 million in 2022. Our higher current quarter Adjusted EBITDA was impacted by higher share-based compensation charges and higher translated U.S. dollar-denominated costs.
OTHER ITEMS
Share-based Incentive Compensation Plans
We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2022 Annual Report.
A summary of expense amounts under these plans during the reporting periods are as follows:
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Cash settled share-based incentive plans | 30,105 | 5,543 | 20,091 | 57,802 | |||||||||||
Equity settled share-based incentive plans | 701 | — | 1,834 | 427 | |||||||||||
Total share-based incentive compensation plan expense | 30,806 | 5,543 | 21,925 | 58,229 | |||||||||||
Allocated: | |||||||||||||||
Operating | 7,692 | 1,922 | 6,732 | 14,694 | |||||||||||
General and Administrative | 23,114 | 3,621 | 15,193 | 43,535 | |||||||||||
30,806 | 5,543 | 21,925 | 58,229 | ||||||||||||
Cash settled share-based compensation expense for the quarter was $30 million as compared with $6 million in 2022. The higher expense in 2023 was primarily due to our improved share price performance as compared with 2022.
During the first quarter of 2023, we issued Executive Restricted Share Units (Executive RSUs) to certain senior executives. Accordingly, our equity-settled share-based compensation expense for the quarter was $1 million as compared with nil in 2022.
As at September 30, 2023, the majority of our share-based compensation plans were classified as cash-settled and will be impacted by changes in our share price. Although accounted for as cash-settled, Precision retains the ability to settle certain vested units in common shares at its discretion.
Finance Charges
Net finance charges were $20 million, a decrease of $3 million compared with 2022 and the result of lower outstanding long-term debt. Interest charges on our U.S. dollar-denominated long-term debt were US$13 million ($17 million) as compared with US$16 million ($20 million) in 2022.
Income Tax
Income tax expense for the quarter was $8 million as compared with $6 million in 2022. During the third quarter, we continued to not recognize deferred tax assets on certain Canadian and international operating losses.
Normal Course Issuer Bid
During the quarter, the Toronto Stock Exchange (TSX) approved the renewal of our Normal Course Issuer Bid. Pursuant to the NCIB, we are authorized to repurchase and cancel up to a maximum of 1,326,321 common shares. Purchases under the renewed NCIB may commence on September 19, 2023 and will terminate no later than September 18, 2024, or such earlier time as we complete our maximum purchases pursuant to the NCIB or provide notice of termination.
Cathedral Energy Services Ltd.
During the third quarter of 2023, we exercised 2 million warrants for $1 million in exchange for 2 million common shares of Cathedral Energy Services Ltd. (Cathedral). In addition, we divested 11 million common shares of Cathedral for net proceeds of $10 million.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Amount | Availability | Used for | Maturity | |||
Senior Credit Facility (secured) | ||||||
US$447 million (extendible, revolving term credit facility with US$353 million accordion feature) | Nil drawn and US$55 million in outstanding letters of credit | General corporate purposes | June 18, 2025 | |||
Real estate credit facilities (secured) | ||||||
US$9 million | Fully drawn | General corporate purposes | November 19, 2025 | |||
$17 million | Fully drawn | General corporate purposes | March 16, 2026 | |||
Operating facilities (secured) | ||||||
$40 million | Undrawn, except $20 million in outstanding letters of credit | Letters of credit and general corporate purposes | ||||
US$15 million | Undrawn | Short-term working capital requirements | ||||
Demand letter of credit facility (secured) | ||||||
US$40 million | Undrawn, except US$21 million in outstanding letters of credit | Letters of credit | ||||
Unsecured senior notes (unsecured) | ||||||
US$299 million – 7.125% | Fully drawn | Debt redemption and repurchases | January 15, 2026 | |||
US$400 million – 6.875% | Fully drawn | Debt redemption and repurchases | January 15, 2029 | |||
As at September 30, 2023, we had $978 million outstanding under our Senior Credit Facility, Real Estate Credit Facilities and unsecured senior notes as compared with $1,103 million at December 31, 2022. The current blended cash interest cost of our debt is approximately 7.0%.
During the quarter, we repurchased and cancelled US$18 million principal amount of our 2026 unsecured senior notes.
Covenants
As at September 30, 2023, we were in compliance with the covenants of our Senior Credit Facility and Real Estate Credit Facilities.
Covenant | At September 30, 2023 | |||||
Senior Credit Facility | ||||||
Consolidated senior debt to consolidated covenant EBITDA(1) | < 2.50 | 0.05 | ||||
Consolidated covenant EBITDA to consolidated interest expense | > 2.50 | 6.74 | ||||
Real Estate Credit Facilities | ||||||
Consolidated covenant EBITDA to consolidated interest expense | > 2.50 | 6.74 |
(1) For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.
Average shares outstanding
The following tables reconcile net earnings (loss) and the weighted average shares outstanding used in computing basic and diluted net earnings (loss) per share:
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net earnings (loss) – basic | 19,792 | 30,679 | 142,522 | (37,776 | ) | ||||||||||
Effect of share options and other equity compensation plans | — | (94 | ) | 3,679 | — | ||||||||||
Net earnings (loss) – diluted | 19,792 | 30,585 | 146,201 | (37,776 | ) |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
(Stated in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Weighted average shares outstanding – basic | 13,607 | 13,580 | 13,643 | 13,549 | |||||||||||
Effect of share options and other equity compensation plans | 3 | 1,464 | 1,215 | — | |||||||||||
Weighted average shares outstanding – diluted | 13,610 | 15,044 | 14,858 | 13,549 | |||||||||||
QUARTERLY FINANCIAL SUMMARY
(Stated in thousands of Canadian dollars, except per share amounts) | 2022 | 2023 | ||||||||||||||
Quarters ended | December 31 | March 31 | June 30 | September 30 | ||||||||||||
Revenue | 510,504 | 558,607 | 425,622 | 446,754 | ||||||||||||
Adjusted EBITDA(1) | 91,090 | 203,219 | 142,093 | 114,575 | ||||||||||||
Net earnings | 3,483 | 95,830 | 26,900 | 19,792 | ||||||||||||
Net earnings per basic share | 0.27 | 7.02 | 1.97 | 1.45 | ||||||||||||
Net earnings per diluted share | 0.27 | 5.57 | 1.63 | 1.45 | ||||||||||||
Funds provided by operations(1) | 111,339 | 159,653 | 136,959 | 91,608 | ||||||||||||
Cash provided by operations | 159,082 | 28,356 | 213,460 | 88,500 |
(Stated in thousands of Canadian dollars, except per share amounts) | 2021 | 2022 | ||||||||||||||
Quarters ended | December 31 | March 31 | June 30 | September 30 | ||||||||||||
Revenue | 295,202 | 351,339 | 326,016 | 429,335 | ||||||||||||
Adjusted EBITDA(1) | 63,881 | 36,855 | 64,099 | 119,561 | ||||||||||||
Net earnings (loss) | (27,336 | ) | (43,844 | ) | (24,611 | ) | 30,679 | |||||||||
Net earnings (loss) per basic share | (2.05 | ) | (3.25 | ) | (1.81 | ) | 2.26 | |||||||||
Net earnings (loss) per diluted share | (2.05 | ) | (3.25 | ) | (1.81 | ) | 2.03 | |||||||||
Funds provided by operations(1) | 62,681 | 29,955 | 60,373 | 81,327 | ||||||||||||
Cash provided by (used in) operations | 59,713 | (65,294 | ) | 135,174 | 8,142 |
(1) See “FINANCIAL MEASURES AND RATIOS.”
FINANCIAL MEASURES AND RATIOS
Non-GAAP Financial Measures | |
We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors. | |
Adjusted EBITDA | We believe Adjusted EBITDA (earnings before income taxes, loss (gain) on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), as reported in our Condensed Interim Consolidated Statements of Net Earnings (Loss) and our reportable operating segment disclosures, is a useful measure because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges. The most directly comparable financial measure is net earnings (loss). |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Adjusted EBITDA by segment: | |||||||||||||||
Contract Drilling Services | 131,701 | 118,599 | 468,302 | 260,202 | |||||||||||
Completion and Production Services | 14,118 | 14,788 | 39,031 | 26,166 | |||||||||||
Corporate and Other | (31,244 | ) | (13,826 | ) | (47,446 | ) | (65,853 | ) | |||||||
Adjusted EBITDA | 114,575 | 119,561 | 459,887 | 220,515 | |||||||||||
Depreciation and amortization | 73,192 | 69,448 | 218,823 | 207,662 | |||||||||||
Gain on asset disposals | (2,438 | ) | (8,238 | ) | (15,586 | ) | (22,152 | ) | |||||||
Foreign exchange | 363 | 1,344 | (894 | ) | 1,362 | ||||||||||
Finance charges | 19,618 | 22,521 | 63,946 | 64,294 | |||||||||||
Gain on repurchase of unsecured notes | (37 | ) | — | (137 | ) | — | |||||||||
Loss (gain) on investments and other assets | (3,813 | ) | (2,515 | ) | 6,075 | (3,738 | ) | ||||||||
Incomes taxes | 7,898 | 6,322 | 45,138 | 10,863 | |||||||||||
Net earnings (loss) | 19,792 | 30,679 | 142,522 | (37,776 | ) |
Funds Provided by (Used in) Operations | We believe funds provided by (used in) operations, as reported in our Condensed Interim Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances. The most directly comparable financial measure is cash provided by (used in) operations. |
Net Capital Spending | We believe net capital spending is a useful measure as it provides an indication of our primary investment activities. The most directly comparable financial measure is cash provided by (used in) investing activities. Net capital spending is calculated as follows: |
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Capital spending by spend category | ||||||||||||||||
Expansion and upgrade | 13,479 | 25,461 | 39,439 | 50,606 | ||||||||||||
Maintenance, infrastructure and intangibles | 38,914 | 25,642 | 108,463 | 76,335 | ||||||||||||
52,393 | 51,103 | 147,902 | 126,941 | |||||||||||||
Proceeds on sale of property, plant and equipment | (6,698 | ) | (22,337 | ) | (20,724 | ) | (32,033 | ) | ||||||||
Net capital spending | 45,695 | 28,766 | 127,178 | 94,908 | ||||||||||||
Business acquisitions | — | 10,200 | 28,000 | 10,200 | ||||||||||||
Proceeds from sale of investments and other assets | (10,013 | ) | — | (10,013 | ) | — | ||||||||||
Purchase of investments and other assets | 3,211 | 73 | 5,282 | 609 | ||||||||||||
Receipt of finance lease payments | (64 | ) | — | (64 | ) | — | ||||||||||
Changes in non-cash working capital balances | (4,551 | ) | (7,328 | ) | 6,774 | (6,881 | ) | |||||||||
Cash used in investing activities | 34,278 | 31,711 | 157,157 | 98,836 |
Working Capital | We define working capital as current assets less current liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position. Working capital is calculated as follows: |
September 30, | December 31, | ||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | |||||
Current assets | 477,396 | 470,670 | |||||
Current liabilities | 299,656 | 410,029 | |||||
Working capital | 177,740 | 60,641 |
Non-GAAP Ratios | |
We reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors. | |
Adjusted EBITDA % of Revenue | We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Condensed Interim Consolidated Statements of Net Earnings (Loss), provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges. |
Long-term debt to long-term debt plus equity | We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total shareholders’ equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication of our debt leverage. |
Net Debt to Adjusted EBITDA | We believe that the Net Debt (long-term debt less cash, as reported in our Condensed Interim Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication of the number of years it would take for us to repay our debt obligations. |
Supplementary Financial Measures | |
We reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors. | |
Capital Spending by Spend Category | We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles. |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements contained in this release, 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:
These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:
Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:
Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2022, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
(Stated in thousands of Canadian dollars) | September 30, 2023 | December 31, 2022 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 49,065 | $ | 21,587 | ||||
Accounts receivable | 393,286 | 413,925 | ||||||
Inventory | 35,045 | 35,158 | ||||||
Total current assets | 477,396 | 470,670 | ||||||
Non-current assets: | ||||||||
Income tax recoverable | 699 | 1,602 | ||||||
Deferred tax assets | 454 | 455 | ||||||
Property, plant and equipment | 2,238,680 | 2,303,338 | ||||||
Intangibles | 18,047 | 19,575 | ||||||
Right-of-use assets | 57,168 | 60,032 | ||||||
Finance lease receivables | 5,112 | — | ||||||
Investments and other assets | 10,645 | 20,451 | ||||||
Total non-current assets | 2,330,805 | 2,405,453 | ||||||
Total assets | $ | 2,808,201 | $ | 2,876,123 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 280,519 | $ | 392,053 | ||||
Income taxes payable | 3,197 | 2,991 | ||||||
Current portion of lease obligations | 13,650 | 12,698 | ||||||
Current portion of long-term debt | 2,290 | 2,287 | ||||||
Total current liabilities | 299,656 | 410,029 | ||||||
Non-current liabilities: | ||||||||
Share-based compensation | 28,360 | 60,133 | ||||||
Provisions and other | 7,331 | 7,538 | ||||||
Lease obligations | 55,143 | 52,978 | ||||||
Long-term debt | 963,827 | 1,085,970 | ||||||
Deferred tax liabilities | 70,149 | 28,946 | ||||||
Total non-current liabilities | 1,124,810 | 1,235,565 | ||||||
Shareholders’ equity: | ||||||||
Shareholders’ capital | 2,306,545 | 2,299,533 | ||||||
Contributed surplus | 74,389 | 72,555 | ||||||
Deficit | (1,158,751 | ) | (1,301,273 | ) | ||||
Accumulated other comprehensive income | 161,552 | 159,714 | ||||||
Total shareholders’ equity | 1,383,735 | 1,230,529 | ||||||
Total liabilities and shareholders’ equity | $ | 2,808,201 | $ | 2,876,123 | ||||
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Stated in thousands of Canadian dollars, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenue | $ | 446,754 | $ | 429,335 | $ | 1,430,983 | $ | 1,106,690 | ||||||||
Expenses: | ||||||||||||||||
Operating | 288,002 | 284,868 | 888,039 | 784,394 | ||||||||||||
General and administrative | 44,177 | 24,906 | 83,057 | 101,781 | ||||||||||||
Earnings before income taxes, loss (gain) on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals, and depreciation and amortization | 114,575 | 119,561 | 459,887 | 220,515 | ||||||||||||
Depreciation and amortization | 73,192 | 69,448 | 218,823 | 207,662 | ||||||||||||
Gain on asset disposals | (2,438 | ) | (8,238 | ) | (15,586 | ) | (22,152 | ) | ||||||||
Foreign exchange | 363 | 1,344 | (894 | ) | 1,362 | |||||||||||
Finance charges | 19,618 | 22,521 | 63,946 | 64,294 | ||||||||||||
Gain on repurchase of unsecured senior notes | (37 | ) | — | (137 | ) | — | ||||||||||
Loss (gain) on investments and other assets | (3,813 | ) | (2,515 | ) | 6,075 | (3,738 | ) | |||||||||
Earnings (loss) before income taxes | 27,690 | 37,001 | 187,660 | (26,913 | ) | |||||||||||
Income taxes: | ||||||||||||||||
Current | 2,047 | 958 | 4,008 | 2,563 | ||||||||||||
Deferred | 5,851 | 5,364 | 41,130 | 8,300 | ||||||||||||
7,898 | 6,322 | 45,138 | 10,863 | |||||||||||||
Net earnings (loss) | $ | 19,792 | $ | 30,679 | $ | 142,522 | $ | (37,776 | ) | |||||||
Net earnings (loss) per share: | ||||||||||||||||
Basic | $ | 1.45 | $ | 2.26 | $ | 10.45 | $ | (2.79 | ) | |||||||
Diluted | $ | 1.45 | $ | 2.03 | $ | 9.84 | $ | (2.79 | ) | |||||||
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net earnings (loss) | $ | 19,792 | $ | 30,679 | $ | 142,522 | $ | (37,776 | ) | |||||||
Unrealized gain on translation of assets and liabilities of operations denominated in foreign currency | 39,180 | 111,811 | 3,322 | 139,478 | ||||||||||||
Foreign exchange loss on net investment hedge with U.S. denominated debt | (24,616 | ) | (84,060 | ) | (1,484 | ) | (105,123 | ) | ||||||||
Comprehensive income (loss) | $ | 34,356 | $ | 58,430 | $ | 144,360 | $ | (3,421 | ) | |||||||
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Stated in thousands of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Cash provided by (used in): | ||||||||||||||||
Operations: | ||||||||||||||||
Net earnings (loss) | $ | 19,792 | $ | 30,679 | $ | 142,522 | $ | (37,776 | ) | |||||||
Adjustments for: | ||||||||||||||||
Long-term compensation plans | 11,577 | 411 | 9,200 | 34,847 | ||||||||||||
Depreciation and amortization | 73,192 | 69,448 | 218,823 | 207,662 | ||||||||||||
Gain on asset disposals | (2,438 | ) | (8,238 | ) | (15,586 | ) | (22,152 | ) | ||||||||
Foreign exchange | 1,275 | 773 | (13 | ) | 924 | |||||||||||
Finance charges | 19,618 | 22,521 | 63,946 | 64,294 | ||||||||||||
Income taxes | 7,898 | 6,322 | 45,138 | 10,863 | ||||||||||||
Other | — | (2 | ) | (220 | ) | 273 | ||||||||||
Loss (gain) on investments and other assets | (3,813 | ) | (2,515 | ) | 6,075 | (3,738 | ) | |||||||||
Gain on repurchase of unsecured senior notes | (37 | ) | — | (137 | ) | — | ||||||||||
Income taxes paid | (187 | ) | (220 | ) | (2,395 | ) | (3,023 | ) | ||||||||
Income taxes recovered | 4 | 10 | 7 | 10 | ||||||||||||
Interest paid | (35,500 | ) | (38,005 | ) | (79,702 | ) | (80,706 | ) | ||||||||
Interest received | 227 | 143 | 562 | 177 | ||||||||||||
Funds provided by operations | 91,608 | 81,327 | 388,220 | 171,655 | ||||||||||||
Changes in non-cash working capital balances | (3,108 | ) | (73,185 | ) | (57,904 | ) | (93,633 | ) | ||||||||
88,500 | 8,142 | 330,316 | 78,022 | |||||||||||||
Investments: | ||||||||||||||||
Purchase of property, plant and equipment | (51,546 | ) | (51,103 | ) | (146,378 | ) | (126,941 | ) | ||||||||
Purchase of intangibles | (847 | ) | — | (1,524 | ) | — | ||||||||||
Proceeds on sale of property, plant and equipment | 6,698 | 22,337 | 20,724 | 32,033 | ||||||||||||
Proceeds from sale of investments and other assets | 10,013 | — | 10,013 | — | ||||||||||||
Business acquisitions | — | (10,200 | ) | (28,000 | ) | (10,200 | ) | |||||||||
Purchase of investments and other assets | (3,211 | ) | (73 | ) | (5,282 | ) | (609 | ) | ||||||||
Receipt of finance lease payments | 64 | — | 64 | — | ||||||||||||
Changes in non-cash working capital balances | 4,551 | 7,328 | (6,774 | ) | 6,881 | |||||||||||
(34,278 | ) | (31,711 | ) | (157,157 | ) | (98,836 | ) | |||||||||
Financing: | ||||||||||||||||
Issuance of long-term debt | 23,600 | 50,360 | 162,649 | 144,889 | ||||||||||||
Repayments of long-term debt | (49,517 | ) | (34,475 | ) | (288,538 | ) | (118,586 | ) | ||||||||
Repurchase of share capital | — | (5,010 | ) | (12,951 | ) | (10,010 | ) | |||||||||
Issuance of common shares from the exercise of options | — | — | — | 6,162 | ||||||||||||
Lease payments | (2,410 | ) | (1,777 | ) | (6,413 | ) | (5,186 | ) | ||||||||
(28,327 | ) | 9,098 | (145,253 | ) | 17,269 | |||||||||||
Effect of exchange rate changes on cash | 251 | 2,878 | (428 | ) | 3,005 | |||||||||||
Increase (decrease) in cash | 26,146 | (11,593 | ) | 27,478 | (540 | ) | ||||||||||
Cash, beginning of period | 22,919 | 51,641 | 21,587 | 40,588 | ||||||||||||
Cash, end of period | $ | 49,065 | $ | 40,048 | $ | 49,065 | $ | 40,048 | ||||||||
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
(Stated in thousands of Canadian dollars) | Shareholders’ Capital | Contributed Surplus | Accumulated Other Comprehensive Income | Deficit | Total Equity | |||||||||||||||
Balance at January 1, 2023 | $ | 2,299,533 | $ | 72,555 | $ | 159,714 | $ | (1,301,273 | ) | $ | 1,230,529 | |||||||||
Net earnings for the period | — | — | — | 142,522 | 142,522 | |||||||||||||||
Other comprehensive income for the period | — | — | 1,838 | — | 1,838 | |||||||||||||||
Settlement of Executive Performance and Restricted Share Units | 19,206 | — | — | — | 19,206 | |||||||||||||||
Share repurchases | (12,951 | ) | — | — | — | (12,951 | ) | |||||||||||||
Redemption of non-management directors share units | 757 | — | — | — | 757 | |||||||||||||||
Share-based compensation expense | — | 1,834 | — | — | 1,834 | |||||||||||||||
Balance at September 30, 2023 | $ | 2,306,545 | $ | 74,389 | $ | 161,552 | $ | (1,158,751 | ) | $ | 1,383,735 |
(Stated in thousands of Canadian dollars) | Shareholders’ Capital | Contributed Surplus | Accumulated Other Comprehensive Income | Deficit | Total Equity | |||||||||||||||
Balance at January 1, 2022 | $ | 2,281,444 | $ | 76,311 | $ | 134,780 | $ | (1,266,980 | ) | $ | 1,225,555 | |||||||||
Net loss for the period | — | — | — | (37,776 | ) | (37,776 | ) | |||||||||||||
Other comprehensive income for the period | — | — | 34,355 | — | 34,355 | |||||||||||||||
Share options exercised | 8,843 | (2,681 | ) | — | — | 6,162 | ||||||||||||||
Share repurchases | (10,010 | ) | — | — | — | (10,010 | ) | |||||||||||||
Share-based compensation reclassification | 14,083 | (219 | ) | — | — | 13,864 | ||||||||||||||
Share-based compensation expense | — | 646 | — | — | 646 | |||||||||||||||
Balance at September 30, 2022 | $ | 2,294,360 | $ | 74,057 | $ | 169,135 | $ | (1,304,756 | ) | $ | 1,232,796 | |||||||||
2023 THIRD QUARTER RESULTS 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, October 26, 2023.
To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.
https://register.vevent.com/register/BId053b471716a4107bc5fb11e4c46d7b5
The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months.
https://edge.media-server.com/mmc/p/vzdcuqii
About Precision
Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”.
For further information, please contact:
Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500
800, 525 - 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com
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