Precision Drilling re-hires 1,000 workers amid increased oil patch activity

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CALGARY, A.B. – In a sign that oilfield activity levels are beginning to recover after a two year downturn, Precision Drilling Corp. has brought back 1,000 employees, as well as started increasing the price it charges for its specialized rigs.

According to an article in the Financial Post, Precision’s President and CEO Kevin Neveu said during an earnings call on Friday that the company was in “the early stages of this rebound” and had reactivated 53 rigs in North America. Neveu added that the company also hired 1,000 employees, the majority of whom had previously been employed by Precision.

The Calgary-based company said it would be hiking prices for its larger, deeper-reaching “super triple” rigs as demand begins to  increase.

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Activity in the oil patch has slowed dramatically, and tens of thousands have lost their jobs in Alberta, Sasktachewan, and Northeast BC since crude prices began their dramatic fall more than two years ago, with very few signs of a rebound. But Neveu said Precision has more than doubled its activity levels since the downturn’s lowpoint, which he felt was the second quarter of this year.

AltaCorp Capital analyst Aaron MacNeil said the Canadian drilling industry is bi-furcated between large and small rigs. He added that Precision is well-positioned in the market for the larger, more automated rigs and has been able to book new contracts and better prices for those rigs next year.

Neveu cautioned that while oilfield activity levels have improved and were approaching 2015 levels, the company’s third quarter results demonstrate how tough the oil and gas industry can be.

Precision posted a $47 million net loss in the third quarter, less than the $86.7 million net loss it posted in the same period a year ago. The loss amounted to 16 cents per share compared with 30 cents a year ago.

The company’s revenues also declined 44 per cent to $201.8 million in the third quarter, compared with $364 million in the same period in 2015.

Story courtesy the Financial Post:

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