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Highlights

  • PD’s Q2 2024 revenue rose to CAD 429.2 million, despite reduced U.S. activity.
  • Higher expenses decreased operating income to CAD 115.1 million and net earnings to CAD 20.7 million.
  • Upcoming U.S. LNG projects are expected to boost export capacity by 12 bcf/d.

Precision Drilling Corporation (TSX: PD) is a North American oil and gas service provider. The company specializes in contract drilling, completion, and production services, primarily catering to oil and natural gas exploration and production firms in Canada.

In Q2 2024, the company's net revenue saw a modest increase to CAD 429.2 million, compared to CAD 425.6 million in the previous corresponding period (pcp). This slight growth was tempered by reduced activity in the U.S. market. Additionally, the company faced higher general and administrative expenses, which contributed to a decrease in operating incometo CAD 115.1 million from CAD 142.0 million in pcp.

As a result of the lower operating income, earnings before taxes also declined to CAD 31.2 million, down from CAD 45.6 million in the prior period. This decline in earnings before taxes led to a decrease in net earnings, which amounted to CAD 20.7 million compared to CAD 26.9 million in pcp.

Recent Business Update

According to the company's press release on July 30, 2024, service rig operating hours rose by 44% compared to pcp, reaching a total of 57,051 hours, primarily due to the CWC acquisition. Additionally, the company reduced its debt by CAD 103 million through the redemption of USD 56 million in 2026 unsecured senior notes and the repayment of CAD 26 million in Canadian Real Estate Credit Facilities.

Company Outlook

In the U.S., the forthcoming wave of LNG projects is anticipated to significantly boost export capacity by approximately 12 billion cubic feet per day (bcf/d) over the next three years. This expansion is expected to stimulate increased drilling activity for natural gas, further enhancing the industry's growth and operational momentum.

Top 10 Shareholders

The top 10 shareholders of Precision Drilling Corporation collectively account for approximately 41.24% of the company's total shareholding. Among these, Ninepoint Partners LP and National Bank of Canada are the largest stakeholders, holding significant portions of the company with stakes of around 9.13% and 5.03%, respectively.

Stock Information

 Over the past week, Precision Drilling Corporation's stock price has experienced a modest increase of approximately 0.56%. However, it has also seen a decline of 2.07% over the last month. Currently, the stock is trading above its average of 52-week high of CAD 109.20 and its 52-week low of CAD 67.46.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 19, 2024. The reference data in this report has been partly sourced from EODHD/Others.