Precision Drilling Trust ("Precision" or the "Trust") /quotes/comstock/11t!e:pd.un (CA:PD.UN 7.73, +0.09, +1.18%) /quotes/comstock/13*!pds/quotes/nls/pds (PDS 7.80, +0.15, +1.96%) reported a 30% revenue increase and a 28% rise in earnings before interest, taxes, loss on asset decommissioning, depreciation and amortization and foreign exchange ("EBITDA") for the first quarter of 2010 over the fourth quarter of 2009. These increases are due to increased activity levels during the first quarter of this year compared with the fourth quarter of 2009.
Revenue for the first quarter of 2010 totaled $373 million compared to $448 million for the first quarter of 2009. EBITDA was $118 million for the first three months of 2010, a decrease of $51 million from the same period of 2009. Precision reported net earnings of $62 million or $0.22 per diluted unit for the quarter ended March 31, 2010, an increase of $5 million or 8% compared to $57 million or $0.28 per diluted unit in the first quarter of 2009. Pre-tax earnings in the first quarter of 2010 were increased by $20 million for foreign exchange gains or $0.05 per diluted unit after tax. Results are lower in the first quarter of 2010 compared with the first quarter of 2009 because of lower average drilling revenue per day in both Canada and the United States partially offset by higher Canadian utilization.
Kevin Neveu, Precision's President and Chief Executive Officer stated: "First quarter 2010 winter drilling season activity levels in Canada exceeded our expectations and we are pleased to note that Precision was the most active land driller in North America during the fourth quarter of 2009 and the first quarter of 2010. Late last year our expectations for activity levels during the winter season in Canada were on par with the first quarter of 2009. However, as the quarter unfolded, activity increased and Precision averaged 38% more rigs working in the first quarter of 2010 than during the same period in 2009. This increase was led by an increase in oil related activity. As pricing for Precision's services are negotiated prior to the winter drilling season, rates for Canadian drilling services for the 2010 quarter were approximately 16% below 2009 levels."
"In the United States, activity levels continue to gradually improve, again with oil related activity leading the way. Precision's active rig count in the first quarter of 2010 was up 19% over the fourth quarter of last year. Dayrates in the United States drilling markets have modestly improved from the bottom of the cycle in mid 2009."
"We are now in the middle of spring break-up in Canada and as such Precision's Canadian active rig count is down to 33. With over half of the wells drilled by Precision in Canada being directed toward oil over the last two quarters, we are encouraged and believe that the remainder of 2010 activity levels will exceed those in 2009. In the United States, Precision's active rig count is currently 87 and we expect our rig count to continue to increase. If the recent decline in and the generally negative outlook for natural gas prices persists, there is the potential for a pullback in gas related activity."
"Precision is poised to seize market opportunities and as such has signed term contracts with two customers to build two new Super Single(R) rigs for deployment in Canada later this year. We are also in discussion with customers on potential new build opportunities for rigs in both the United States and Canada for heavy oil drilling and resource plays such as the Marcellus, Bakken, Horn River and the Eagle Ford," concluded Mr. Neveu.
Source: marketwire Press Release