Precision Drilling profit slips on high loonie

Calgary-based Precision Drilling Corp. says its third-quarter profit slipped to $61 million, from $72 million a year earlier, in part because of the stronger Canadian dollar.

U.S. drilling up 5% in 3rd quarter

Calgary-based Precision Drilling Corp. says its third-quarter profit slipped to $61 million, from $72 million a year earlier, in part because the stronger Canadian dollar ate into U.S. income.

Canada's largest independent oil and gas drilling company said Thursday it booked a lower gain on foreign exchange, compared with the same period a year ago.

Precision Drilling 1-year stock chart

The firm has extensive operations in the U.S.

Earnings amounted to 21 cents a share, well ahead of analyst estimates of nine cents per share, according to Thomson Reuters.

Last year in the third quarter, it had posted a profit of 25 cents a share.

In its most recent quarter, the firm made a foreign exchange gain of $18 million. That compared with the $63-million gain made a year ago after it converted foreign income into Canadian dollars.

Revenue increased to $359 million from $253 million.

Precision shares closed up 18 cents to $7.70 Thursday on the Toronto Stock Exchange.

CEO Kevin Neveu said oil-related drilling activity has continued to grow.

"The strong customer demand for high-performance rigs targeting oil has led the rig count higher and continues to provide an encouraging outlook for Precision," he said in a release.

U.S. drilling up

On average, Precision had five per cent more rigs active in the U.S. in the most recent quarter, compared with the preceding three months, and 76 per cent more operating than in the same period a year earlier.

"If low natural gas prices persist," he said, "there is the potential for further regional pullback in gas-related activity. However, we would expect most of these rigs to be absorbed by oil and natural gas liquids-rich drilling activity."

Earlier this month, the Canadian company took part in the dramatic rescue of 33 Chilean miners who survived 69 days deep underground.

It was one of three firms drilling a rescue bore and, in the end, another company's equipment broke through first.

With files from The Canadian Press