Precision Drilling Corp (NYSE:PDS) shares are surging today after it reported fourth-quarter FY23 results.
Revenues fell 0.7% Y/Y to C$506.9 million in the quarter. Contract Drilling Services revenue declined 1.5% Y/Y to C$446.5 million, while Completion and Production Services revenue increased 5.4% Y/Y to C$62.5 million.
Drilling rig utilization days declined 25% Y/Y in the U.S. and 3% Y/Y in Canada, while international drilling rig utilization days grew 26% Y/Y.
Adjusted EBITDA increased to C$151.2 million from C$91.1 million in the quarter.
EPS stood at C$9.81, a significant increase from C$0.27 a year ago.
Operating cash flow came in at C$170.3 million from C$159.1 million the prior year quarter. Capital expenditures stood at C$79 million compared with C$57 million a year ago.
The company currently has 45 active rigs in the U.S., 64 in Canada and 8 internationally.
Kevin Neveu, President and CEO, said, “Internationally, we recertified and reactivated four Kuwait rigs in 2023 and now have eight active rigs working in the Kingdom of Saudi Arabia and Kuwait. With these additional rigs, we expect our activity to increase approximately 40% year over year and provide predictable future cash flow as the majority of these rigs are under five-year term contracts that extend into 2027 and 2028.”
Outlook: The company expects to reduce debt by C$150 million to C$200 million in 2024 and allocate 25% to 35% of free cash flow before debt repayments toward share repurchases.
Moreover, it plans to lower debt by another C$100 million by the end of 2026 and continue to shareholder capital returns of 50% of free cash flow.
Precision Drilling projects its average active international rig count to increase by around 40% Y/Y in the year.
Price Action: PDS shares are up 9.53% at $64.58 on the last check Tuesday.