Precision Drilling Corporation Announces New International Contract
Awards and Update to 2014 Capital Expenditure Plan
CALGARY, ALBERTA--(Marketwired - Mar 24, 2014) -
(Canadian dollars, unless otherwise indicated)
Precision Drilling Corporation (TSX:PD)(NYSE:PDS) ("Precision"
or the "Corporation") announced today new international contract
awards and an update on its 2014 capital expenditure plan, which is
now $634 million.
International Contract
Award Summary
In the Middle East, we have signed a multi-year contract for a
Super Triple new build ST-2000 drilling rig that will be delivered
late in the fourth quarter of this year. In Mexico, we have signed
multi-year contracts for a total of six drilling rigs, including
re-contracting three existing 3,000 horsepower rigs working for a
major integrated project management (IPM) service provider and
contracting, as part of a consortium, for three 1,000 horsepower
rigs.
2014 Capital Plan
Update
The 2014 capital expenditure plan of $634 million is an increase
of $119 million from the plan announced during our February 14,
2014 fourth quarter and year end press release.
The updated 2014 plan includes $320 million for expansion
capital, $195 million for sustaining and infrastructure
expenditures, and $119 million to upgrade existing rigs. We expect
that the $634 million will be split $597 million in the Contract
Drilling segment and $37 million in the Completion and Production
Services segment.
Precision's expansion capital plan includes the completion and
deployment of twelve new build drilling rigs, eleven of which were
previously announced. In 2014, we now plan to deliver six new build
rigs to Canada, two new build rigs to the United States, three new
build rigs to international locations and one new build rig that
will only be completed once a firm customer contract is secured.
Additional expansion capital is allocated to equipment for
Completion and Production services and long-lead items.
The plan includes the cost to complete four rig upgrades
previously announced in 2013 and 11 to 15 additional rig upgrades
in 2014. The increase in the expected number of rig upgrades this
year is driven by strengthening customer demand for contracted rig
upgrades in both North America and internationally.
Sustaining and infrastructure expenditures are based on
currently anticipated activity levels, and include the cost to
consolidate and upgrade our operations facility in Nisku,
Alberta.
Quote from Precision's
CEO
"Today's international contract award announcements demonstrate
the effectiveness of our High Performance, High Value strategy in
our key international markets. These new contracts will grow our
share of the technically challenging portion of the market and
create scale benefits in our core geographic operating
regions."
"The interest in contracted upgrades in all of our markets also
is encouraging with greater customer demand in North America from
areas such as the Permian in West Texas and from LNG related
activity in deep basins in Canada potentially leading to contracted
new builds later in the year."
"We will continue to prudently deploy capital toward projects
generating attractive returns. Our footprint and customer base
affords us excellent opportunities to invest capital and our focus
remains on selecting the best projects producing returns on the
capital we deploy and returning value to shareholders in the form
of share price appreciation and dividends."
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", "propose", "plan", "expect", "believe",
"will", "may" 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 level, timing and planned uses
of capital expenditures, plans regarding the completion and
delivery of additional new build drilling rigs and rig upgrades,
and the potential growth in market share.
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 including
the performance of contracts in accordance with their terms, the
delivery of contracted rigs on a timely basis, strengthening
customer demand translating into the need for additional new build
rigs and upgrades, Precision's expectations regarding its
customers' capital budgets and geographical areas of focus and the
general economic, regulatory and political stability of the foreign
jurisdictions in which Precision operates.
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; general economic,
market or business conditions; and other unforeseen conditions
which could impact the use of services supplied by Precision.
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.
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 and 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".
Precision Drilling CorporationCarey FordVice President, Finance
and Investor
Relations403.716.4575403.716.4755www.precisiondrilling.com
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