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.
Precision Drilling Corporation (“Precision” or
the “Company”) (TSX:PD; NYSE:PDS) is pleased to announce that it
has successfully extended its Senior Credit Facility and with
strong cash flow generation during the first half of the year, it
is well on track to meet its 2024 debt reduction and share
repurchase targets.
Senior Credit Facility Extension
On June 28, 2024, Precision extended its Senior
Credit Facility’s maturity date, revised the available borrowing
capacity, and amended certain terms. The maturity date was extended
to June 28, 2027, and the size was revised to US$375 million
(previously US$447 million), which includes an accordion feature to
increase the facility to US$750 million.
2024 Debt Repayment and Share Repurchase
Progress
Since the beginning of the year, Precision has
reduced debt by $103 million, marking significant progress toward
its 2024 debt reduction target of $150 million to $200 million.
Second quarter debt repayments included the redemption of US$56
million of 2026 unsecured senior notes and the repayment of $25
million of real estate credit facilities that were due in 2026 and
2028. As at June 30, 2024, Precision’s outstanding debt obligations
include:
- US$217 million – 7.125% unsecured
senior notes due January 15, 2026
- US$400 million – 6.875% unsecured
senior notes due January 15, 2029
- US$8 million real estate credit
facility due in 2025
With strong cash flow generation during the
second quarter, Precision also returned $24 million to shareholders
through share repurchases under its Normal Course Issuer Bid. For
the first six months of the year, Precision has repurchased 369,309
common shares for $34 million, representing 3% of its outstanding
common shares.
CFO Quote
Carey Ford, Precision’s CFO, commented, “Today’s
announcement marks another step in strengthening our balance sheet
and returning capital to shareholders. Our organization has
been intensely focused on cost management, capital discipline, and
cash flow generation and our results are a testament to the efforts
of all Precision employees. For 2024 we are committed to
repaying $150 million to $200 million in debt and returning 25% to
35% of free cash flow before debt repayments to shareholders
through share repurchases. Precision’s longer-term balance
sheet goal is to reduce debt by $600 million between 2022 and 2026
and achieve a Net Debt to Adjusted EBITDA ratio(1) of below 1.0
times by the end of 2025. Since the beginning of 2022, we have
reduced debt by approximately $360 million and expect to be well
over $400 million by the end of this year.”
(1) Net Debt to Adjusted EBITDA ratio is a
Non-GAAP measure. Please refer to Precision’s 2023 Annual Report
for more information.
About Precision
Precision is a leading provider of safe and
environmentally responsible High Performance, High Value services
to the energy industry, offering customers access to an extensive
fleet of Super Series drilling rigs. Precision has commercialized
an industry-leading digital technology portfolio known as AlphaTM
that utilizes advanced automation software and analytics to
generate efficient, predictable, and repeatable results for energy
customers. Our drilling services are enhanced by our EverGreenTM
suite of environmental solutions, which bolsters our commitment to
reducing the environmental impact of our operations. Additionally,
Precision offers well service rigs, camps and rental equipment all
backed by a comprehensive mix of technical support services and
skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta,
Canada and is listed on the Toronto Stock Exchange under the
trading symbol “PD” and on the New York Stock Exchange under the
trading symbol “PDS”.
Cautionary Statement Regarding Forward-Looking
Information and Statements
Certain statements contained in this report,
including statements that contain words such as "could", "should",
"can", "anticipate", "estimate", "intend", "plan", "expect",
"believe", "will", "may", "continue", "project", "potential" and
similar expressions and statements relating to matters that are not
historical facts constitute "forward-looking information" within
the meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995 (collectively, "forward-looking
information and statements").
In particular, forward-looking information and
statements include, but are not limited to, the following:
- anticipated Net
Debt to Adjusted EBITDA ratio;
- 2024 debt
reduction and share repurchase targets; and
-
our future debt reduction and shareholder capital return
plans.
These forward-looking information and statements
are based on certain assumptions and analysis made by Precision in
light of our experience and our perception of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. These include,
among other things:
- the fluctuation
in oil prices may pressure customers into reducing or limiting
their drilling budgets;
-
the status of current negotiations with our customers and
vendors;
-
customer focus on safety performance;
-
existing term contracts are neither renewed nor terminated
prematurely;
-
continued market demand for Super Spec rigs;
-
our ability to deliver rigs to customers on a timely basis;
-
the general stability of the economic and political environments in
the jurisdictions where we operate; and
-
the impact of an increase/decrease in capital spending.
Undue reliance should not be placed on
forward-looking information and statements. Whether actual results,
performance or achievements will conform to our expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from our expectations. Such risks and uncertainties include, but
are not limited to:
- the business, operational and/or
financial performance or achievements of Precision may be
materially different from that currently anticipated;
-
volatility in the price and demand for oil and natural gas;
-
fluctuations in the level of oil and natural gas exploration and
development activities;
-
fluctuations in the demand for contract drilling, well servicing
and ancillary oilfield services;
-
our customers’ inability to obtain adequate credit or financing to
support their drilling and production activity;
-
changes in drilling and well servicing technology, which could
reduce demand for certain rigs or put us at a competitive
advantage;
-
shortages, delays and interruptions in the delivery of equipment
supplies and other key inputs;
-
liquidity of the capital markets to fund customer drilling
programs;
-
availability of cash flow, debt and equity sources to fund our
capital and operating requirements, as needed;
-
the impact of weather and seasonal conditions on operations and
facilities;
-
competitive operating risks inherent in contract drilling, well
servicing and ancillary oilfield services;
-
ability to improve our rig technology to improve drilling
efficiency;
-
general economic, market or business conditions;
-
the availability of qualified personnel and management;
-
a decline in our safety performance which could result in lower
demand for our services;
-
changes in laws or regulations, including changes in environmental
laws and regulations such as increased regulation of hydraulic
fracturing or restrictions on the burning of fossil fuels and GHG
emissions, which could have an adverse impact on the demand for oil
and natural gas;
-
terrorism, social, civil and political unrest in the foreign
jurisdictions where we operate;
-
fluctuations in foreign exchange, interest rates and tax rates;
and
-
other unforeseen conditions which could impact the use of services
supplied by Precision and Precision’s ability to respond to such
conditions.
Readers are cautioned that the forgoing list of
risk factors is not exhaustive. Additional information on these and
other factors that could affect our business, operations or
financial results are included in reports on file with applicable
securities regulatory authorities, including but not limited to
Precision’s Annual Information Form for the year ended December 31,
2023, which may be accessed on Precision’s SEDAR+ profile at
www.sedarplus.ca or under Precision’s EDGAR profile
at www.sec.gov. The forward-looking information and statements
contained in this news release are made as of the date hereof and
Precision undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, except as required by
law.
Additional Information
For further information, about Precision, please
visit our website at www.precisiondrilling.com or contact:
Lavonne Zdunich, CPA, CAVice President, Investor
Relations403.716.4500
Precision Drilling Corporation800, 525 - 8th
Avenue S.W.Calgary, Alberta, Canada T2P 1G1Website:
www.precisiondrilling.com
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