CALGARY, Alberta, Feb. 12, 2025 (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, gain on acquisition, loss on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, loss on asset decommissioning, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending, Working Capital and Total Long-term Financial Liabilities. 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.
Financial Highlights and 2025 Capital Allocation Plans
Revenue in the fourth quarter was $468 million, an 8% decrease from 2023 as activity increases in Canadian drilling, well servicing, and international were more than offset by lower activity and day rates in the U.S.Adjusted EBITDA(1) was $121 million in the quarter and included $15 million of share-based compensation charges, $4 million for rig reactivation costs and $4 million of non-recurring charges. In 2023, fourth quarter Adjusted EBITDA was $151 million and included share-based compensation charges of $13 million.Net earnings attributable to shareholders was $15 million or $1.06 per share in the fourth quarter compared to $147 million or $10.42 per share as net earnings in 2023 included an income tax recovery of $69 million and a gain on acquisition of $26 million.In 2024, we invested $217 million into our fleet and infrastructure, including multiple contracted rig upgrades and the strategic purchase of drill pipe for use in 2025. We expect to invest $225 million into our fleet and infrastructure in 2025, which may fluctuate with activity levels and customer contract upgrade opportunities.For the year ended December 31, 2024, we achieved our annual debt reduction and return of shareholder capital targets, reducing debt by $176 million and repurchasing $75 million of common shares while building cash by $20 million. Precision has consistently met or exceeded its capital allocation goals since implementation in 2016.For 2025, we expect to reduce debt by at least $100 million in 2025 and have increased our long-term debt reduction target to $700 million and extended our debt reduction period to 2027. In 2025, we plan to increase direct shareholder returns to 35% to 45% of free cash flow, before debt repayments. To the extent excess cash is generated these allocations may be increased. Operational Highlights
Demand for our services continues to be strong and in 2024 our Canadian and international drilling rig utilization days increased 12% and 37%, respectively, while our well servicing rig operating hours increased 26% over 2023.In the fourth quarter, Canada’s activity averaged 65 active drilling rigs versus 64 in the same quarter last year. Our Super Triple and Super Single rigs remain in high demand and are nearly fully utilized. Canadian revenue per utilization day was $35,675, up from $34,616 in the fourth quarter of 2023.Our U.S. activity has remained relatively consistent since mid-2024. We averaged 34 drilling rigs in the fourth quarter with revenue per utilization day of US$30,991 versus 45 drilling rigs at US$34,452 in 2023’s fourth quarter.International activity increased 6% over the same period last year while revenue per utilization day was US$49,636 compared to US$49,872 in the fourth quarter of 2023.Service rig operating hours in the fourth quarter totaled 59,834, representing a 6% increase over the same quarter last year partially driven by the CWC Energy Services Corp. (CWC) acquisition in November of 2023. (1) See “FINANCIAL MEASURES AND RATIOS.”
Get the latest news
delivered to your inbox Sign up for The Manila Times newsletters By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.
MANAGEMENT COMMENTARY
“Through 2024 Precision demonstrated remarkable market resilience despite weaker than expected U.S. customer demand and late year customer budget exhaustion in Canada. We continued our long-term record of meeting or exceeding our capital allocation targets every year since 2016 with $176 million of debt reduction, $75 million of share buybacks, while increasing our cash balance by $20 million. In the fourth quarter, approximately $8 million of reactivation costs and non-recurring items impacted our financial results, along with slightly lower than expected Canadian customer demand. Despite these fourth quarter headwinds we continued investing in our core business lines, including purchasing approximately $18 million of drill pipe in advance of potential tariffs, investing $3 million to begin reactivating two idle Canadian Super Single rigs to meet demand in 2025, and upgrading one rig for Canadian heavy oil pad drilling opportunities.
Advertisement
“The outlook for Canada remains very strong given robust heavy oil activity following the startup of the Trans Mountain pipeline expansion in May 2024 and the imminent startup of LNG Canada in mid-2025. My enthusiasm is further underpinned by the pace of rig reactivations following the seasonal Christmas break and the stable winter activity we have experienced to date with 81 rigs working since mid-January. The uncertainty introduced by potential U.S. tariffs on Canadian oil and gas exports, has been tempered and we have not experienced any change in customer demand or their longer-term capital spending plans.
“In Canada, our drilling utilization days increased 12% over 2023 and our Super Triple and Super Single rigs, which represent approximately 80% of our Canadian fleet, are nearly fully utilized. Demand for our Super Triple fleet, which is the preferred rig for Montney drilling, is driven by robust condensate fundamentals and the startup of LNG Canada this year. Demand for our Super Single fleet is driven by increased activity in heavy oil targeted areas as customers are benefiting from improved commodity pricing, following the startup of Trans Mountain, and a softening Canadian dollar.
“Internationally, our drilling utilization days increased 37% in 2024 following the recertification and reactivation of four rigs in 2023. In 2024, we had eight rigs working on term contracts, five in Kuwait and three in the Kingdom of Saudi Arabia. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028, providing predictable cash flow for the next few years.
“In our Completion and Production Services business, our well servicing operating hours increased 26% over 2023 levels following the successful integration of CWC, where we achieved significant operating synergies. Our Completion and Production Services Adjusted EBITDA increased 30% year over year, which was slightly below our expectation due to late year customer budget exhaustion impacting our activity and rental business. I am very pleased with how we have transformed our Completion and Production Services business with two strategic tuck-in acquisitions. The High Arctic and CWC acquisitions more than doubled our Completion and Production revenue and Adjusted EBITDA since 2021 and solidified Precision as the premier well service provider in Canada.
Advertisement
“During the year, Precision generated $482 million of cash provided by operations, allowing us to meet our capital return targets and invest $217 million into our fleet and infrastructure, which included multiple drilling rig upgrades and the strategic purchase of drill pipe for use in 2025. We expect to invest approximately $225 million in 2025, which reflects a weaker Canadian dollar and includes expected customer funded upgrades across our North American operations, including approximately $30 million in US fleet upgrades for customers targeting extended reach laterals.
“With sustained free cash flow as a key differentiator of our business, we remain focused on reducing debt and increasing direct returns to shareholders. In 2025, we expect to reduce debt by at least $100 million, reinforcing our commitment to achieving a sustained Net Debt to Adjusted EBITDA ratio(1) of below 1.0 times. As we continue to realize the benefits of lower debt levels, we have increased our long-term debt reduction target by $100 million to $700 million and extended the debt reduction period by one year to 2027. In 2025, our goal is to increase our direct capital returns to shareholders by allocating 35% to 45% of free cash flow, before debt repayments, while continuing to move towards 50% of free cash flow thereafter, with excess cash potentially used to increase these allocations.
“I would like to thank our employees for their dedication and commitment to serving our customers, and our shareholders for their continued support. With positive long-term fundamentals associated with global oil and natural gas demand and particularly the unique fundamentals driving drilling activity in our core geographic markets, I am confident we will continue to drive shareholder value,” concluded Mr. Neveu.
(1) See “FINANCIAL MEASURES AND RATIOS.”
Advertisement
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights
Advertisement
For the three months ended
December 31,
For the year ended
December 31,
(Stated in thousands of Canadian dollars, except per share amounts) 2024 2023 % Change 2024 2023 % Change Revenue 468,171 506,871 (7.6) 1,902,328 1,937,854 (1.8)Adjusted EBITDA(1) 120,526 151,231 (20.3) 521,221 611,118 (14.7)Net earnings 14,930 146,722 (89.8) 111,330 289,244 (61.5)Net earnings attributable to shareholders 14,795 146,722 (89.9) 111,195 289,244 (61.6)Cash provided by operations 162,791 170,255 (4.4) 482,083 500,571 (3.7)Funds provided by operations(1) 120,535 145,189 (17.0) 463,372 533,409 (13.1) Cash used in investing activities 61,954 57,627 7.5 202,986 214,784 (5.5)Capital spending by spend category(1) Expansion and upgrade 21,565 24,459 (11.8) 52,066 63,898 (18.5)Maintenance and infrastructure 37,335 54,388 (31.4) 164,632 162,851 1.1 Proceeds on sale (8,570) (3,117) 174.9 (30,395) (23,841) 27.5 Net capital spending(1) 50,330 75,730 (33.5) 186,303 202,908 (8.2) Net earnings attributable to shareholders per share: Basic 1.06 10.42 (89.8) 7.81 21.03 (62.8)Diluted 1.06 9.81 (89.2) 7.81 19.53 (60.0)Weighted average shares outstanding: Basic 13,982 14,084 (0.7) 14,229 13,754 3.5 Diluted 13,987 15,509 (9.8) 14,234 15,287 (6.9) (1) See “FINANCIAL MEASURES AND RATIOS.”
Operating Highlights Advertisement
For the three months ended
December 31,
For the year ended
December 31,
2024 2023 % Change 2024 2023 % Change Contract drilling rig fleet 214 214 – 214 214 – Drilling rig utilization days: U.S. 3,084 4,138 (25.5) 12,969 17,961 (27.8)Canada 6,018 5,909 1.8 23,685 21,156 12.0 International 736 693 6.2 2,928 2,132 37.3 Revenue per utilization day: U.S. (US$) 30,991 34,452 (10.0) 32,531 35,040 (7.2)Canada (Cdn$) 35,675 34,616 3.1 Advertisement
TRY THE MANILA TIMES PREMIUM
FREE FOR 14 DAYS SUBSCRIBE NOW ALREADY A SUBSCRIBER? LOGIN HERE DOWNLOAD THE DIGITAL EDITION APP News Nation Regions World Sports Entertainment Lifestyle The Sunday Times Opinion Editorial Editorial Cartoon OP-ED Columns From our Readers Legal Advice Business Top Business Corporate News Foreign Business Sunday Business & IT Company Announcements Special Sections Special Features TMT Newswire Videos Podcasts Market Overview Weather Exam Results The Manila Times Home Delivery Subscription Subscribe to our Digital Edition The Manila Times College The Manila Times TV The Manila Times Forum The Manila Times Coffee Break The Manila Times Classifieds Subscribe Now Copyright © The Manila Times – All Rights Reserved. Advertise Contact Us About Us Privacy Policy Home My Library Podcasts Videos Games This website uses cookies. By continuing to browse the website, you are agreeing to our use of cookies. Read More. Close
