A Precision Drilling rig working for Baytex near Maidstone a few years ago. Photo by Brian Zinchuk
CALGARY —
The completion of the Trans Mountain pipeline expansion is leading to a boom in demand for drilling services, said Precision Drilling chief executive Kevin Neveu.
The contract driller is seeing demand exceed its expectations, he said on an earnings call Thursday, as the expansion of the crude oil pipeline to the West Coast approaches a May 1 start of commercial operations.
“Do we see customer interest increasing in anticipation of the Trans Mountain start up? The answer is resoundingly yes.”
The company has 48 rigs currently operating where last year it had 38, and expects demand to continue. It also expects a boost to well servicing contracts.
“We see this momentum continuing throughout the summer and exceeding our prior view on Canadian rig demand,” said Neveu.
The growth is helping offset a retreat in the U.S., where activity is more muted by weak natural gas prices and operator consolidation, he said.
The company reported 38 active drilling rigs in the U.S. for its first quarter compared with 60 for the first quarter of 2023.
In Canada, Precision averaged 73 active drilling rigs for the quarter, compared with 69 a year earlier.
- 0079 Ministry of Energy Business_incentive PO0079 Ministry of Energy Business_incentive PO
- 0078 LHOS 20240078 LHOS 2024
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0053 Kingston Midstream Westspur Alameda0053 Kingston Midstream Westspur Alameda
- 0076 Latus only0076 Latus only
- 0073 SaskWorks-Pipeline Online0073 SaskWorks-Pipeline Online
- 0063 Turnbull Excavating hiring crusher0063 Turnbull Excavating hiring crusher
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0058 Royal Helium Steveville opens anonymous rocket0058 Royal Helium Steveville opens anonymous rocket
- 0055 Smart Power Be Smart with your Power office0055 Smart Power Be Smart with your Power office
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0046 City of Estevan This is Estevan0046 City of Estevan This is Estevan
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0011
- 0006 JK Junior
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001
The decline in U.S. activity helped lead its first-quarter profit to come in at $36.5 million, down from $95.8 million a year ago.
The company says the profit amounted to $2.53 per diluted share for the quarter ended March 31, down from $5.57 per diluted share the same time last year.
Revenue totalled $527.8 million, down from $558.6 million in the first quarter of 2023.
The company is focused on cost reductions, paying down debt and returning profits to shareholders, said Neveu.
Precision is also investing in automated rig technology that could mean future rises in demand won’t lead as much to booms in employment.
The system has several more months ahead of field hardening before it’s commercially ready, but so far it’s working better than expected, said Neveu.
“We’ll eliminate human work from the red zone on the drill rig floor and in the mast, while ensuring our customers safe, consistent, predictable and highly efficient rig floor performance.”
This report by The Canadian Press was first published April 25, 2024.
Companies in this story: (TSX:PD)
News from © The Canadian Press, 2024. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Canadian Press
- 0079 Ministry of Energy Business_incentive PO0079 Ministry of Energy Business_incentive PO
- 0078 LHOS 20240078 LHOS 2024
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0053 Kingston Midstream Westspur Alameda0053 Kingston Midstream Westspur Alameda
- 0076 Latus only0076 Latus only
- 0073 SaskWorks-Pipeline Online0073 SaskWorks-Pipeline Online
- 0063 Turnbull Excavating hiring crusher0063 Turnbull Excavating hiring crusher
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0058 Royal Helium Steveville opens anonymous rocket0058 Royal Helium Steveville opens anonymous rocket
- 0055 Smart Power Be Smart with your Power office0055 Smart Power Be Smart with your Power office
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0046 City of Estevan This is Estevan0046 City of Estevan This is Estevan
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0011
- 0006 JK Junior
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001