Latest news with #PrecisionDrilling
Global News
25-04-2025
- Business
- Global News
Precision Drilling trims 2025 capital budget because of market uncertainty
Precision Drilling is trimming its planned 2025 capital spending due to market uncertainty and a possible dip in demand from the oil and gas producers that contract its rigs. Chief executive Kevin Neveu says Precision expects to spend $200 million this year, a reduction of $25 million from its earlier forecast. That includes an $8-million drop in upgrade spending that acted as a 'placeholder' in Precision's budget for potential projects in its U.S. or international segments. Neveu says if either of those markets rebound this year, Precision would consider ramping that spending back up — but only if the financial returns and contract terms pass muster. The rest of the spending cuts were to be for maintenance capital, which Precision had earmarked to take advantage of year-end vendor discounts. Story continues below advertisement Precision has cut some staff as it exited its well servicing business in North Dakota, where it had 10 rigs. 'We originally entered this market to provide services to Canadian customers operating in North Dakota. And for several years, this business performed well,' Neveu told analysts on a conference call Thursday. 'When our Canadian customers exited the market, we were left competing with local mom-and-pop service providers for highly price-sensitive customers. And although last year was a positive cash flow year for this segment, we did not achieve our target of return on capital.' 1:54 Alberta Drilling Accelerator test site aims to support new oil and gas technologies Six service rigs are being moved back to Canada from North Dakota, while the rest are to be sold in the U.S., he added. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Neveu said the sense he's getting from customers is that they should be able to keep operating with West Texas Intermediate crude prices at their current levels just above US$60 a barrel – but it's more tenuous for U.S. players than for Canadian ones. Story continues below advertisement He cautioned that the information Precision gets from customers is 'designed to create some pricing tension with us' and so may not provide the full picture. 'But it does feel like in the U.S. oily basins, low US$60s, high US$50s is probably stable. Get below kind of high US$50, and the uncertainty level increases,' he said. In Canada, which has seen the discount on its heavy crude narrow with the opening of the Trans Mountain pipeline expansion to the B.C. coast, crude would have to dip to around US$50 'before our customers get too nervous about activity,' he said. 0:32 Trans Mountain startup will boost Canadian oil production to all-time high: Deloitte Neveu's comments come a day after Precision reported first-quarter net earnings attributable to shareholders of $34.5 million, or $2.20 per diluted share, down from $36.5 million or $2.53 per diluted share a year earlier. Story continues below advertisement Revenues were $496.3 million during the first three months of 2025, down from $527.8 million.
Winnipeg Free Press
24-04-2025
- Business
- Winnipeg Free Press
Precision Drilling trims 2025 capital budget amid market uncertainty
CALGARY – Precision Drilling is trimming its planned 2025 capital spending due to market uncertainty and a possible dip in demand from the oil and gas producers that contract its rigs. Chief executive Kevin Neveu says Precision expects to spend $200 million this year, a reduction of $25 million from its earlier forecast. That includes an $8-million drop in upgrade spending that acted as a 'placeholder' in Precision's budget for potential projects in its U.S. or international segments. Neveu says if either of those markets rebound this year, Precision would consider ramping that spending back up — but only if the financial returns and contract terms pass muster. The rest of the spending cuts were to be for maintenance capital, which Precision had earmarked to take advantage of year-end vendor discounts. Precision has cut some staff as it exited its well servicing business in North Dakota, where it had 10 rigs. 'We originally entered this market to provide services to Canadian customers operating in North Dakota. And for several years, this business performed well,' Neveu told analysts on a conference call Thursday. 'When our Canadian customers exited the market, we were left competing with local mom-and-pop service providers for highly price-sensitive customers. And although last year was a positive cash flow year for this segment, we did not achieve our target of return on capital.' Six service rigs are being moved back to Canada from North Dakota, while the rest are to be sold in the U.S., he added. Neveu said the sense he's getting from customers is that they should be able to keep operating with West Texas Intermediate crude prices at their current levels just above US$60 a barrel — but it's more tenuous for U.S. players than for Canadian ones. He cautioned that the information Precision gets from customers is 'designed to create some pricing tension with us' and so may not provide the full picture. 'But it does feel like in the U.S. oily basins, low US$60s, high US$50s is probably stable. Get below kind of high US$50, and the uncertainty level increases,' he said. During Elections Get campaign news, insight, analysis and commentary delivered to your inbox during Canada's 2025 election. In Canada, which has seen the discount on its heavy crude narrow with the opening of the Trans Mountain pipeline expansion to the B.C. coast, crude would have to dip to around US$50 'before our customers get too nervous about activity,' he said. Neveu's comments come a day after Precision reported first-quarter net earnings attributable to shareholders of $34.5 million, or $2.20 per diluted share, down from $36.5 million or $2.53 per diluted share a year earlier. Revenues were $496.3 million during the first three months of 2025, down from $527.8 million. This report by The Canadian Press was first published April 24, 2025. Companies in this story: (TSX: PD)
Yahoo
10-04-2025
- Business
- Yahoo
Raymond James downgrades Precision Drilling to Outperform on estimate cuts
Raymond James downgraded Precision Drilling (PDS) to Outperform from Strong Buy with a price target of C$124, down from C$141. The firm brought down its U.S. active rig count, day rate, and day margin estimates, and now sit below consensus for Precision Drilling. The analyst acknowledges the headwinds drilling faces in a lower commodity price environment, and the risk that commodity prices move lower, but it believes Precision shares have 'been aggressively punished.' Investors are more than compensated for the 'extra risk' at this share price, the analyst tells investors in a research note. Discover outperforming stocks and invest smarter with Top Smart Score Stocks. Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on PDS: Disclaimer & DisclosureReport an Issue Precision Drilling downgraded to Outperform from Strong Buy at Raymond James Precision Drilling Announces Virtual-Only Shareholder Meeting for 2025 Precision Drilling Announces 2025 Shareholder Meeting and Highlights 2024 Success Precision Drilling to Announce Q1 2025 Results and Host Conference Call Precision Drilling Files 2024 Annual Disclosure Documents Sign in to access your portfolio
Yahoo
03-03-2025
- Business
- Yahoo
Trump's tariffs threat hits Canada's oil and gas drillers
By Amanda Stephenson CALGARY (Reuters) - Canada's oilfield drilling and services sector is already showing signs of slowing due to U.S. President Donald Trump's threatened tariffs, triggering fears that an expected industry rebound could stall if such levies go forward. Employment levels in the Canadian drilling sector collapsed between 2014 and 2020 due to sustained low oil prices and reduced production during the COVID-19 pandemic. Activity has improved since 2020, but Trump's threat to impose a 10% tariff on the 4 million barrels per day (bpd) of Canadian crude imported into the U.S. could upend that, industry representatives said. When volatility affects oil markets, oilfield service companies are often the first hit as their oil producer customers look to delay or defer spending. Precision Drilling , Canada's largest drilling rig operator, saw a steeper-than-expected slowdown in its Canadian well servicing segment in the fourth quarter of 2024. "It seems that some of the tariff uncertainty slowed down customer decision-making," said CEO Kevin Neveu during a conference call last month. A TD Cowen report from February predicted Canadian oil producers will "err on the side of conservatism" due to uncertainty over tariffs. Analysts at the bank reduced their 2025 Canadian rig count forecast by about 5% as a result, to average 175 active rigs versus a prior projection of 185. TD Cowen also downgraded its recommendation for two Canadian drilling stocks — Precision Drilling and Ensign Energy Services — from "buy" to "hold." "I know that certainly the anxiety level is rising," said Mark Scholz, president of the Canadian Association of Energy Contractors (CAOEC), in an interview. "Any sort of investment reduction will have an immediate and very, very quick effect on our industry." Scholz emphasized the slowdown thus far has been small, involving "just a handful" of rigs. He attributed it to uncertainty within the broader Canadian oil industry about the timing, duration and market impacts of tariffs. While a 10% tariff on Canadian oil is not likely to immediately impact most oil producers' plans, at least near-term, smaller companies could get hit, warned Dane Gregoris, managing director with Enverus Intelligence Research. "A lot of (oil company) budgets are pretty set up at this point and disclosed. They might be hitting the low-end of their (forecast) ranges, but I can't imagine massive changes to capital budgets," he said. Still, there are other concerns among producers, including the possibility of retaliatory tariffs by Canada, which would raise the prices of inputs and drilling rig equipment imported from the U.S., said Gurpreet Lail, president of industry group Enserva. Sand, for example, is among the items the Canadian government has identified on its list of proposed counter-tariffs. Sand is used heavily by the oil and gas industry in the hydraulic fracturing, or fracking, process. If tariffs do come into effect, said Lail, it will likely mean job losses in a sector that still has not recovered to where it was a decade ago. Last year, total employment in Canada's drilling sector was approximately half what it was in 2014. CAOEC's November 2024 forecast had projected 2025 would see the sector's highest level of employment in ten years, but Lail said that is now in doubt. "We thought we had finally seen a light coming at the end of the tunnel here, and people were getting back to work," she said. "But this is not good news." Sign in to access your portfolio
Reuters
03-03-2025
- Business
- Reuters
Trump's tariffs threat hits Canada's oil and gas drillers
CALGARY, March 3 (Reuters) - Canada's oilfield drilling and services sector is already showing signs of slowing due to U.S. President Donald Trump's threatened tariffs, triggering fears that an expected industry rebound could stall if such levies go forward. Employment levels in the Canadian drilling sector collapsed between 2014 and 2020 due to sustained low oil prices and reduced production during the COVID-19 pandemic. Activity has improved since 2020, but Trump's threat to impose a 10% tariff on the 4 million barrels per day (bpd) of Canadian crude imported into the U.S. could upend that, industry representatives said. When volatility affects oil markets, oilfield service companies are often the first hit as their oil producer customers look to delay or defer spending. Precision Drilling ( opens new tab, Canada's largest drilling rig operator, saw a steeper-than-expected slowdown in its Canadian well servicing segment in the fourth quarter of 2024. "It seems that some of the tariff uncertainty slowed down customer decision-making," said CEO Kevin Neveu during a conference call last month. A TD Cowen report from February predicted Canadian oil producers will "err on the side of conservatism" due to uncertainty over tariffs. Analysts at the bank reduced their 2025 Canadian rig count forecast by about 5% as a result, to average 175 active rigs versus a prior projection of 185. TD Cowen also downgraded its recommendation for two Canadian drilling stocks — Precision Drilling and Ensign Energy Services ( opens new tab — from "buy" to "hold." "I know that certainly the anxiety level is rising," said Mark Scholz, president of the Canadian Association of Energy Contractors (CAOEC), in an interview. "Any sort of investment reduction will have an immediate and very, very quick effect on our industry." Scholz emphasized the slowdown thus far has been small, involving "just a handful" of rigs. He attributed it to uncertainty within the broader Canadian oil industry about the timing, duration and market impacts of tariffs. While a 10% tariff on Canadian oil is not likely to immediately impact most oil producers' plans, at least near-term, smaller companies could get hit, warned Dane Gregoris, managing director with Enverus Intelligence Research. "A lot of (oil company) budgets are pretty set up at this point and disclosed. They might be hitting the low-end of their (forecast) ranges, but I can't imagine massive changes to capital budgets," he said. Still, there are other concerns among producers, including the possibility of retaliatory tariffs by Canada, which would raise the prices of inputs and drilling rig equipment imported from the U.S., said Gurpreet Lail, president of industry group Enserva. Sand, for example, is among the items the Canadian government has identified on its list of proposed counter-tariffs. Sand is used heavily by the oil and gas industry in the hydraulic fracturing, or fracking, process. If tariffs do come into effect, said Lail, it will likely mean job losses in a sector that still has not recovered to where it was a decade ago. Last year, total employment in Canada's drilling sector was approximately half what it was in 2014. CAOEC's November 2024 forecast had projected 2025 would see the sector's highest level of employment in ten years, but Lail said that is now in doubt. "We thought we had finally seen a light coming at the end of the tunnel here, and people were getting back to work," she said. "But this is not good news."
