CALGARY, ALBERTA--(Marketwired - Feb 13, 2014) -
(Canadian Dollars Except as Indicated)
This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release.
The Board of Directors of Precision Drilling Corporation ( PD.TO ) ( PDS ) ("Precision" or the "Corporation") has declared a first quarter dividend on Precision's common shares of $0.06 per share, payable on March 14, 2014, to shareholders of record on February 27, 2014. For Canadian income tax purposes, all dividends paid by Precision on its common shares are designated as "eligible dividends", unless otherwise indicated by the Corporation.
Net earnings this quarter were $68 million, or $0.24 per diluted share, compared to a net loss of $116 million, or $0.42 per diluted share, in the fourth quarter of 2012. In the fourth quarter of 2012, we recognized charges associated with asset decommissioning and a goodwill impairment that, combined, reduced net earnings by $179 million and net earnings per diluted share by $0.63.
Revenue this quarter was $567 million, or 6% higher than the fourth quarter of 2012, mainly because of higher international and U.S. drilling activity and higher pricing in Canadian contract drilling partially offset by lower turnkey activity in the United States.
Earnings before income taxes, finance charges, foreign exchange, impairment of goodwill, loss on asset decommissioning and depreciation and amortization ("adjusted EBITDA") this quarter were $198 million or 12% higher than the fourth quarter of 2012. Our adjusted EBITDA margin was 35% this quarter, compared to 33% in the fourth quarter of 2012. The increase in adjusted EBITDA margin was mainly due to increases in international and U.S. contract drilling activity and lower costs in U.S. contract drilling. Our activity for the quarter, as measured by drilling rig utilization days, increased 3% in the United States and 43% internationally, and decreased 1% in Canada compared to the fourth quarter of 2012.
For the year ended December 31, 2013, net earnings were $191 million or $0.66 per diluted share compared to net earnings of $52 million or $0.18 per diluted share in 2012. Revenue for the year was $2,030 million compared to $2,041 million in 2012. Adjusted EBITDA totaled $639 million for 2013 compared to $671 million in 2012, a decrease of 5%. Improved pricing in Canada and increased activity internationally were offset by lower activity levels in both the Contract Drilling and Completion and Production Services segments. Activity for Precision in 2013, as measured by drilling rig utilization days, decreased 6% in Canada and 13% in the United States compared to 2012, while international activity increased 70%.
Kevin Neveu, Precision's President and Chief Executive Officer, stated: "Precision's fourth quarter financial performance was a result of strengthening demand for our Tier 1 rigs, continued improvement in dayrates and excellent cost control by our drilling groups. Precision's High Performance, High Value strategy and our position as a preeminent driller for North America's unconventional resources is beginning to deliver the financial returns we expect."
"In the United States our activity bottomed in the second quarter at 77 rigs and today we are operating 95 rigs and our fourth quarter results reflect strengthening dayrates and margins. Our customers clearly recognize the efficiency and performance of Precision's Tier 1 rig fleet and we are pleased to see this value realized in our results."
"In our Canadian operations, Precision's focused investments are providing strong returns from new build and upgraded rigs for deeper unconventional drilling and pad drilling for heavy oil. These opportunities provide higher long-term returns compared to managing our business to meet short-term utilization targets. Fourth quarter activity was slightly lower than 2012, but Precision's increasing share of the Tier 1 market is driving dayrates, which continue to trend upwards with nearly a $1,000 per day increase year over year."
"The fourth quarter was the first time our international drilling division delivered results from as many as 12 rigs active, with modest startup expense drag, contributing to our results at a more normal run rate. We are optimistic about this division's performance in 2014 with the two ST-3000 rig deployments in Kuwait later this year. Additionally, the recent integrated project management awards could lead to several more rigs in Mexico for Precision."
"While our Completion and Production Services group continues to be challenged by low customer demand, I am pleased with our move into the northern U.S. during 2013. This geographic expansion leveraged our core completion and production capabilities, diversified our footprint, and continues to provide the opportunity to create value for a larger customer base."
"While 2013 may be seen as disappointing in some respects, as customer demand and activity waned for the first half of the year, the momentum that began to build in our third quarter and gained real traction for Precision in the fourth quarter, sets up a strong start to 2014. The consistently firm oil prices and the weather-driven improved natural gas prices should prove to be positive short-term catalysts. Furthermore, crude transportation debottlenecking and the potential for natural gas exports are encouraging long-term catalysts for Precision."
"With today's dividend announcement, Precision will have declared $89 million in dividend payments to shareholders in the past 14 months," concluded Mr. Neveu.
S ELECT FINANCIAL AND OPERATING INFORMATION
|(Stated in thousands of Canadian dollars, except where noted)||Three months ended |
|Year ended |
|2013||2012||% Change||2013||2012||% Change|
|Adjusted EBITDA (1)||197,744||177,026||11.7||638,833||670,792||(4.8||)|
|Adjusted EBITDA % of revenue||34.9||%||33.2||%||31.5||%||32.9||%|
|Net earnings (loss)||67,921||(116,339||)||n/m||191,150||52,360||265.1|
|Cash provided by operations||94,452||136,317||(30.7||)||428,086||635,286||(32.6||)|
|Funds provided by operations (1)||155,816||142,576||9.3||461,973||598,812||(22.9||)|