(Calgary) The completion of the Trans Mountain pipeline expansion is causing an explosion in demand for drilling services, says Kevin Neveu, CEO of Precision Drilling.
The drilling services company is seeing demand exceed its expectations, Neveu said Thursday during an earnings conference call, as the pipeline’s expansion to the West Coast nears the start of commercial operations on 1er may.
“Do we see customer interest increasing in anticipation of Trans Mountain starting up? The answer is definitely yes. »
The company currently has 48 platforms in operation, up from 38 last year, and expects demand growth to continue. She also expects an increase in well maintenance contracts.
“We expect this momentum to continue through the summer and exceed our previous forecasts for Canadian drilling demand,” Neveu said.
This growth helps to offset a decline in the United States, where activity is further hampered by low natural gas prices and the consolidation of operators, he said.
The company reported 38 active drilling rigs in the United States for its first quarter, compared to 60 for the first quarter of 2023.
In Canada, Precision averaged 73 active rigs for the quarter, compared to 69 a year earlier.
The decline in activity in the United States contributed to first-quarter profit of 36.5 million, down from 95.8 million a year ago.
Earnings were $2.53 per share for the quarter ended March 31, compared to $5.57 per share in the same period last year.
Revenue totaled 527.8 million, down from 558.6 million in the first quarter of 2023.
The company is focused on cutting costs, paying down debt and returning profits to shareholders, Neveu said.
Precision is also investing in automated platform technology, which could mean future increases in demand won’t lead to as much of a job boom.
The system still has several months before it is commercially ready, but so far it is working better than expected, Neveu said.