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Precision Drilling Q3 was hit by North America slowdown in demand

CEO Kevin Neveu commented: "Precision's Q3 results reflect weakening North American customer demand, a muted Canadian seasonal recovery, continued reductions in dry gas and gas-liquids drilling and a pause in the rapid growth of oil directed drilling in the North Dakota Bakken. Despite these challenging market conditions, we continue to see customer demand through additional long-term contracts for upgrades of Precision's existing rigs and for Precision's newly introduced "rack and pinion" heavy oil well service rig. These additional customer commitments coupled with the 11 contracted new build Super Series drilling rigs deployed during the third quarter demonstrate our ability to seize market opportunities backed with firm customer commitments." But he adds, "PDS is seeing increased long-term contracts for upgraded and new rigs. Neveu says Canadian drilling activity was 29% lower than a year earlier in 3Q while the US rig count industrywide is down 10%, and 7% lower than mid-year. He attributes that to oil-and-gas producer slowing capital spending to stay within 2012 budgets."