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Precision Drilling, one of the largest drilling companies in Canada has re-hired 1000 employees and started increasing its prices for specialized rigs. This is a sign oilfield activity levels are starting to recover.
Kevin Neveu, the President & CEO said at a recent earnings call that the company was starting to rebound and had reactivated fifty-three of their rigs around North America. He said that they were encouraged by the improvement in the sentiment of their customers and the increase in market share and activity subsequently.
As demand increases, Precision said they were going to hike prices for their deeper-reaching rigs as demand increases.
Oilfield activity has slowed down recently, and thousands of people in Alberta have lost jobs since crude prices started falling a couple of years ago. But, Precision has managed to double their activity levels since then.
They have thirty-seven rigs in the United States right now, and activity is up by 70% from the second quarter. The industry standard is around 35% for the same period.
Neveu did say that even though oilfield activities have improved and they are nearing their 2015 levels, the results of the third quarter show just how unforgiving and brutal the business can be.
Precision posted a net loss of $47 million in this quarter which is lower than the $86.7 million they lost in the same period in 2015. The loss was around 16 cents a share as opposed to 30 cents a share from last year.
The revenues of the company declined by 44% as well to $201.8 million as compared to $364 million from 2015.
Oilfield activity levels should recover this winter with more rigs operational as opposed to last year.
Precision has increased their capital budget for the rest of 2016 by $20 million. They are now planning on spending $222 million in total over the year.