Dallas, Texas 12/10/2014 (FINANCIALSTRENDS) – Precision Drilling Corp (USA) (NYSE:PDS) recently announced that it estimated $493 million in planned capital expenditures during FY15. It includes $474 million in the Contract Drilling Services and remaining $19 million in the Completion and Production Services.
The company plans to use $361 million for expansion capital and $20 million to upgrade existing rigs. It estimates to spend $112 million for sustaining and infrastructure expenditures.
The company also reduced its FY14 guidance for capital expenditures by $23 million to $885 million. It noted that carry forward expenditures of $350 million have been included in the FY15 capital expenditure guidance.
Planned Capital Spending
Precision Drilling Corp (USA) (NYSE:PDS) noted that the 2015 plan includes the completion of the rig upgrades contracted previously in 2014.
The company’s expansion capital plan aims at completion and deployment of previously announced 16 new build drilling rigs. It includes 16 Super Triple rigs of which 15 are planned for deployment in the U.S. during 1H15 and one in Kuwait late in 2Q15.
Sustaining and infrastructure capital plan is based on the consideration of currently anticipated activities for 2015 and planned infrastructure projects. The company is expecting to complete construction of the training rig at its Alberta facility.
Kevin A. Neveu, CEO of Precision Drilling Corp (USA) (NYSE:PDS), said that the FY15 capital spending plan underscores the management commitment of support the company’s ‘High Performance, High Value’ service offering. By the end of 1H15, the company’s fleet of Tier 1 Super Series drilling rigs will increase to 238 vessels, all set to deliver maximum efficiency across any commodity price environment.
Robert J. McNally, CFO at Precision Drilling, expressed confidence in the company’s efficient and flexible capital structure with strong liquidity position, cash balance and undrawn borrowings from revolving credit facility. The management is considering potential alternatives for using excess cash and ensuring capital structure efficiency.