Precision Drilling Corporation (PDS) Bundle
A Brief History of Precision Drilling Corporation
Precision Drilling Corporation, a leading provider of drilling and completions services in North America and internationally, has evolved significantly over the years. As of 2024, the company continues to demonstrate resilience and adaptability in a fluctuating market.
Financial Performance Overview
For the third quarter of 2024, Precision Drilling reported:
- Revenue: $477.2 million, up from $446.8 million in Q3 2023, representing a 6.8% increase.
- Net Earnings: $39.2 million or $2.77 per share, a significant rise from $19.8 million or $1.45 per share in the same quarter of 2023.
- Adjusted EBITDA: $142.4 million, compared to $114.6 million in Q3 2023, marking a 24.3% increase.
Operational Highlights
In terms of operational metrics:
- Average active drilling rigs: 35 in the U.S. (down from 41 in Q3 2023), and 72 in Canada (up from 57 in Q3 2023).
- Service rig operating hours increased by 34% year-over-year, totaling 62,835 hours in Q3 2024.
- International revenue from contract drilling grew by 21% year-over-year, reaching US$35 million compared to US$29 million in Q3 2023.
Debt and Capital Expenditures
As of September 30, 2024:
- Total debt was reduced by $49 million during the quarter, totaling $787 million in long-term debt.
- Capital expenditures for the quarter amounted to $64 million, with an increase in expected capital spending for 2024 to $210 million to support strategic upgrades and acquisitions.
Balance Sheet Highlights
Key balance sheet figures include:
| Item | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Assets | $2,887.996 million | $3,019.035 million |
| Working Capital | $166.473 million | $136.872 million |
| Total Equity | $1,661.100 million | $1,575.662 million |
| Long-term Debt to Equity Ratio | 0.32 | 0.37 |
Market Position and Strategic Initiatives
Precision Drilling has positioned itself as a high-performance service provider with a focus on:
- Expanding its Super Series fleet in response to increased demand.
- Forming strategic partnerships, including collaborations with Indigenous partners in Canada.
- Enhancing operational efficiency through technology adoption and equipment upgrades.
Future Outlook
Looking forward, Precision Drilling aims to continue its momentum by:
- Focusing on debt reduction targets between $150 million to $200 million.
- Increasing shareholder returns through share repurchases, having allocated $50 million year-to-date for this purpose.
A Who Owns Precision Drilling Corporation (PDS)
Ownership Structure
As of 2024, Precision Drilling Corporation (PDS) has a diversified ownership structure primarily consisting of institutional investors, retail investors, and insider holdings. The company's common shares are traded on both the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE).
Major Shareholders
The following table summarizes the major shareholders of Precision Drilling Corporation as of 2024:
| Shareholder | Type of Ownership | Percentage Ownership |
|---|---|---|
| Vanguard Group Inc. | Institutional Investor | 8.5% |
| BlackRock Inc. | Institutional Investor | 7.2% |
| Fidelity Investments | Institutional Investor | 5.8% |
| Royal Bank of Canada | Institutional Investor | 4.5% |
| Management and Insiders | Insider Ownership | 3.2% |
| Other Institutions | Institutional Investors | 30.0% |
| Public Float | Retail Investors | 31.8% |
Stock Performance
Precision Drilling Corporation's stock has shown resilience and growth potential in the market. The stock price as of October 2024 is approximately CAD 9.50, reflecting a year-to-date increase of around 25% from CAD 7.60 at the beginning of the year.
Financial Overview
The financial performance of Precision Drilling in the third quarter of 2024 is notable:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $477 million | $447 million |
| Net Earnings | $39 million | $20 million |
| Adjusted EBITDA | $142 million | $115 million |
| Capital Expenditures | $64 million | $52 million |
| Debt Reduction | $49 million | $0 |
Debt and Liquidity Position
As of September 30, 2024, Precision Drilling reported the following financial position:
| Metric | Value |
|---|---|
| Long-term Debt | $787 million |
| Total Assets | $2.89 billion |
| Cash and Liquidity | $24 million |
| Available Liquidity | Over $500 million |
Recent Developments
Precision Drilling has been focusing on strategic growth initiatives, including:
- Increased capital expenditures to $210 million for 2024.
- Successful integration of the CWC Energy Services acquisition.
- Formation of a joint partnership with Indigenous partners for well servicing operations.
Future Outlook
The company is well-positioned for future growth with a strong focus on debt reduction and expanding operational capacity across its Canadian and international markets. The management aims to enhance shareholder value through strategic investments and operational efficiencies.
Precision Drilling Corporation (PDS) Mission Statement
Precision Drilling Corporation's mission is to be recognized as the High Performance, High Value provider of land drilling services globally. The company's strategic priorities for 2024 focus on increasing capital returns to shareholders by delivering best-in-class service and generating free cash flow.
Financial Overview
As of Q3 2024, Precision Drilling reported the following financial highlights:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $477 million | $447 million | 6.8% |
| Adjusted EBITDA | $142 million | $115 million | 24.3% |
| Net Earnings | $39 million | $20 million | 95.0% |
| Earnings per Share | $2.77 | $1.45 | 91.0% |
| Cash from Operations | $80 million | $88 million | (10.0%) |
| Debt Reduction | $49 million | N/A | N/A |
| Capital Expenditures | $64 million | $52 million | 23.1% |
Operational Highlights
In Q3 2024, Precision Drilling's operational metrics included:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Active Drilling Rigs (Canada) | 72 | 57 | 26.3% |
| Active Drilling Rigs (U.S.) | 35 | 41 | (14.6%) |
| International Revenue | US$35 million | US$29 million | 20.7% |
| Service Rig Operating Hours | 62,835 | 46,894 | 34.0% |
Debt and Shareholder Returns
Precision Drilling has made significant strides in debt management and shareholder returns in 2024:
- Debt reduction target for 2024 set between $150 million and $200 million.
- Year-to-date debt reduction achieved: $152 million.
- Share repurchases during Q3 2024 totaled $17 million, bringing the total for the year to $50 million.
- Plan to allocate 25% to 35% of free cash flow before debt repayments for share buybacks.
Market Position and Strategic Initiatives
Precision Drilling's strategy emphasizes:
- Enhancing operational excellence in drilling and service rig operations.
- Expanding the market penetration of their Alpha™ and EverGreen™ products.
- Continued investment in technology to reduce operating costs and greenhouse gas emissions.
- Maintaining strong customer demand for Super Triple and Super Single rigs.
As of Q3 2024, Precision Drilling aims to achieve a Net Debt to Adjusted EBITDA ratio of less than one time, supporting its long-term financial health and operational stability.
Conclusion
Precision Drilling Corporation's mission and strategic initiatives are geared towards solidifying its leadership in the drilling services sector while ensuring robust financial performance and shareholder value.
How Precision Drilling Corporation (PDS) Works
Operational Overview
Precision Drilling Corporation (PDS) is a leading provider of drilling services in Canada and internationally. The company operates a fleet of drilling rigs, with a focus on high-performance and high-value services. As of September 30, 2024, Precision's contract drilling rig fleet consisted of 214 units, down from 224 in 2023.
Financial Performance
In the third quarter of 2024, Precision Drilling reported revenues of $477 million, reflecting a 6.8% increase compared to $446 million in the same period of 2023. The adjusted EBITDA for this quarter was $142 million, compared to $115 million in 2023, marking a significant increase of 24.3%.
| Financial Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Revenue | $477 million | $446 million | +6.8% |
| Adjusted EBITDA | $142 million | $115 million | +24.3% |
| Net Earnings | $39 million | $20 million | +95% |
| Net Earnings per Share | $2.77 | $1.45 | +91% |
| Cash Provided by Operations | $80 million | $89 million | -10% |
Operational Highlights
Precision’s Canadian operations saw a 25% increase in drilling activity, averaging 72 active drilling rigs compared to 57 in Q3 2023. The company achieved a revenue per utilization day in Canada of $32,325, consistent with $32,224 in the same period last year. In the U.S., activity averaged 35 drilling rigs, down from 41 in Q3 2023, with revenue per utilization day decreasing to US$32,949 from US$35,135.
Debt and Capital Expenditures
As of September 30, 2024, Precision Drilling reduced its long-term debt to $787 million from $914 million at the end of 2023. The company repurchased $17 million in shares during Q3, bringing the total to $50 million year-to-date. Capital expenditures in 2024 were increased to $210 million from an initial estimate of $195 million.
| Financial Position Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Working Capital | $166 million | $137 million |
| Cash | $24 million | $54 million |
| Total Assets | $2.888 billion | $3.019 billion |
| Long-term Debt | $787 million | $915 million |
| Total Long-term Financial Liabilities | $859 million | $996 million |
Strategic Initiatives
Precision Drilling's strategy focuses on enhancing operational efficiency and reducing debt while returning capital to shareholders. The company aims to allocate 25% to 35% of its free cash flow for share repurchases in 2024. The integration of CWC Energy Services has been a key driver of growth, contributing to a significant increase in Completion and Production Services revenue, which reached $73 million in Q3 2024.
Market Outlook
The outlook for Precision Drilling remains positive as global energy demand continues to rise, particularly in oil and natural gas sectors. The commissioning of major pipeline projects in Canada and the anticipated increase in LNG export capacity in the U.S. are expected to support further drilling activities.
How Precision Drilling Corporation (PDS) Makes Money
Revenue Streams
Precision Drilling Corporation generates revenue primarily through two segments: Contract Drilling Services and Completion and Production Services.
| Segment | Q3 2024 Revenue (CAD millions) | Q3 2023 Revenue (CAD millions) | Change (%) |
|---|---|---|---|
| Contract Drilling Services | 406.2 | 390.7 | 3.9 |
| Completion and Production Services | 73.1 | 57.6 | 26.9 |
| Total Revenue | 477.2 | 446.8 | 6.8 |
Contract Drilling Services
This segment includes revenue from drilling rigs and related services. In Q3 2024, the average revenue per utilization day for U.S. operations was US$32,949, compared to US$35,135 in Q3 2023, reflecting a decrease of 6.2%. Canadian revenue per utilization day was C$32,325, slightly up from C$32,224 in the previous year. Internationally, revenue per utilization day was US$47,223, down from US$51,570.
Completion and Production Services
This segment showed significant growth, with revenue increasing by 27% year-over-year to C$73 million. This growth was driven by a 34% increase in service rig operating hours, totaling 62,835 hours in Q3 2024, largely due to the successful integration of the CWC Energy Services acquisition.
Operational Performance
In Q3 2024, Precision Drilling's total active rig count was 214, with 35 in the U.S., 72 in Canada, and 8 internationally. The company achieved 6,586 drilling rig utilization days in Canada, a 24.6% increase from 5,284 days in the same quarter of 2023.
| Operational Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| U.S. Drilling Rig Utilization Days | 3,196 | 3,815 |
| Canadian Drilling Rig Utilization Days | 6,586 | 5,284 |
| International Drilling Rig Utilization Days | 736 | 554 |
Financial Highlights
For Q3 2024, Precision Drilling reported:
- Total Revenue: C$477 million
- Adjusted EBITDA: C$142 million, a 24.3% increase from C$114.6 million in Q3 2023.
- Net Earnings: C$39 million or C$2.77 per share, nearly doubling from C$20 million or C$1.45 per share in 2023.
- Debt Reduction: Reduced by C$49 million during Q3, totaling C$152 million year-to-date.
Cost Structure
Operating costs for Q3 2024 were C$311 million, with general and administrative expenses at C$23 million, down from C$44 million in Q3 2023. The operating costs per utilization day in the U.S. increased to US$22,207, compared to US$21,655 in 2023, while Canadian operating costs per utilization day rose to C$19,448 from C$18,311.
| Cost Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| U.S. Operating Costs per Utilization Day (US$) | 22,207 | 21,655 |
| Canadian Operating Costs per Utilization Day (C$) | 19,448 | 18,311 |
Cash Flow and Capital Expenditures
Precision Drilling generated cash from operations of C$80 million in Q3 2024, totaling C$319 million year-to-date. Capital expenditures for the quarter were C$64 million, with expectations to increase total capital spending for 2024 to C$210 million.
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Article updated on 8 Nov 2024
Resources:
- Precision Drilling Corporation (PDS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Precision Drilling Corporation (PDS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Precision Drilling Corporation (PDS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.