Highlights

  • Precision Drilling reported a 6.8% increase in net revenue for Q3FY24, reaching CAD 477.1 million
  • Net earnings nearly doubled, rising 98.5% to CAD 39.1 million in Q3FY24
  • On October 29, 2024, Precision Drilling announced forming a joint partnership with Indigenous partners in British Columbia

Precision Drilling Corporation (TSX:PD) offers contract drilling and completion and production services in Canada, specifically to oil and natural gas exploration and production companies. It has a market cap of CAD 1.18 billion.

The company reported an increase in drilling rig utilization days in both the Canadian and International segments for the third quarter of 2024, (Q3FY24), compared to the previous corresponding period. Additionally, the company posted better financial results with sequentially increasing margins and cash flows.

In Q3FY24, the company’s net revenue increased by 6.8%, reaching CAD 477.1 million compared to CAD 446.7 million in the prior corresponding period (pcp). Operating income for Q3FY24 rose by 24.4% YoY, reaching CAD 142.4 million, compared to CAD 114.5 million. This improvement was driven by higher revenue, although it was partially impacted by increased expenses. During the reported period, earnings before income taxes rose by 92%, reaching CAD 53.0 million versus CAD 27.6 million in pcp. Net earnings nearly doubled, rising by 98.5% to CAD 39.1 million, compared to CAD 19.7 million in the pcp.

Recent Business Update

On October 29, 2024, the company announced the formation of a joint alliance with indigenous partners. It is aimed at offering well-servicing operations in northeast British Columbia. In another update, the company reported a 21% increase in international revenue for the third quarter compared to the previous year. The company generated USD 35 million in contract drilling revenue, up from USD 29 million in 2023.

Company Outlook

The company has maintained a positive outlook as the next wave of LNG projects in the U.S. is expected to add about 12 bcf/d of export capacity in the next three years. This increase will support additional natural gas drilling activity in the U.S.

Top 10 Shareholders

The top 10 shareholders of Precision Drilling collectively own about 35.49% shares of the company. Ninepoint Partners LP holds the largest stake at approximately 8.18%. National Bank of Canada follows with a stake of around 5.16%.

Stock Information

The stock price of PD has decreased by approximately 2.35% over the past week and 3.75% over the past month. At present, the stock is trading below the average of its 52-week high of CAD 109.20 and its 52-week low of CAD 67.46. As of December 09, 2024, the stock’s closing price is CAD 85.68.

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 December 9, 2024. The reference data in this report has been partly sourced from EODHD/Others.