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Precision Drilling second-quarter loss surges as pandemic weakens demand for oil

Trainees Dan Brook and Bradley Williams are directed by instructor Clint Dyck while training to lay down drill pipe on a rig floor, at Precision Drilling in Nisku, Alta., on January 20, 2016.
Trainees Dan Brook and Bradley Williams are directed by instructor Clint Dyck while training to lay down drill pipe on a rig floor, at Precision Drilling in Nisku, Alta., on January 20, 2016. THE CANADIAN PRESS/Jason Franson

Precision Drilling Corp. says its second-quarter loss surged while revenues plummeted as the COVID-19 pandemic caused demand and prices for oil to dwindle.

The drilling company says it lost $48.9 million or 18 cents per share for the three months ended June 30, compared with a $13.8-million, five cents per share loss a year earlier.

Read more: Precision Drilling reports $5.3M Q1 loss, warns of drop in demand well into 2021

Revenues for the three months ended June 30 decreased 47 per cent to $189.8 million, from $359.4 million in the second quarter of 2019.

The results were in line with expectations, according to financial markets data firm Refinitiv.

Oil price drop to historic lows amid COVID-19 pandemic
Oil price drop to historic lows amid COVID-19 pandemic

Precision says its Canadian market share was 36 per cent in the quarter with a third-quarter seasonal rebound expected to be “muted with limited visibility into long-term customer demand.”

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Precision says deeper cost-cutting than was previously announced should lead to an additional $14 million in annualized savings.

Read more: Plunging oil prices point to ‘deep collapse’ in sector, drilling firm CEO warns

Total savings, capital expenditure reductions and the Canadian wage subsidy program will reduce 2020 cash outflows by up to $150 million, above its $100-million previous target.

“Our actions have further strengthened and positioned the company both financially and competitively for an eventual industry recovery,” stated president and CEO Kevin Neveu.

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