Precision Drilling reports Q1 loss, cites cutback by oilfield clients
Precision Drilling Corp. reported a loss of $19.9 million in its latest quarter compared with a profit of $24.0 million a year ago.
The Calgary-based oilfield services company said revenue for the quarter ended March 31 totalled $301.7 million, down from $512.1 million in the first quarter of 2015, mainly due to lower drilling activity in the U.S., Canada and internationally.
Revenue from its contract drilling services and completion and production services segments both fell by 39 per cent and 57 per cent, respectively, it said.
“Customer demand took another leg down during the first quarter of the year,” president and CEO Kevin Neveu said on a conference call with analysts Monday. “With WTI oil price falling into the $20s in the first weeks of 2016, customers in all markets responded by further trimming spending, reducing drilling plans and well servicing activities …
“The situation is rather black and white these days, and more black than white. The Canadian winter drilling season was the weakest in decades.”
During the quarter, Precision Drilling said it received $23 million in one-time contract cancellation payments in connection with five contracts. The company said it has been hit by a total of nine contract cancellations since the start of the downturn, which began in late 2014.