Precision Drilling Says Rig Utilitization Rates Weak
Dow Jones
TORONTO (Dow Jones)--Precision Drilling Corp. (PDS), a big energy services company, said the utilization rate of its drilling rigs in Canada has been weaker than normal for this time of year, suggesting the company's earnings for this year could come under pressure.
After presenting at the Peters & Co. Canadian Energy Conference here, Dale Tremblay, Precision's chief financial officer, said the consensus among analysts is for Precision to earn between C$2.20 and C$2.50 a share this year, down from C$3.47 a share in 2001. He declined to comment on the estimates, but suggested that he wouldn't be surprised if analysts started to bring their estimates closer to the lower end of the range because of the relatively weak utilization rates.
During the presentation, Tremblay emphasized the company's ongoing efforts to expand internationally and build up its technology services group, which develops and manufactures specialty drilling tools, to help fuel growth.
Tremblay reiterated the company's target to generate annual revenue from this group of about C$1.5 billion by 2005, up from about C$700 million currently and C$150 million when Precision acquired the business in 2000.
If Precision achieves this revenue target, the technology group would represent the largest part of the company's operations on a revenue basis.
Tremblay also said that the company's contract to drill 240 wells for Mexican state oil company Pemex is going well with 201 wells already drilled. In addition, Tremblay said that Precision had won the mandate to drill another 50 wells on top of the original 240.
-By Ben Dummett; Dow Jones Newswires |
