Precision Drilling Corporation : International Exploration & Production Spending to Rise 10% in 2013
02/15/2013| 10:50am US/Eastern
The ShinesRooms.com Provides Stock Research onPrecision Drilling Corp. and Helix Energy Solutions Group Inc.
New York City, New York -- Oil and gas equipment & services industry faced a challenging 2012 due to the uncertain macroeconomic environment. A sharp decline in natural gas prices last year led to natural gas rigs falling to their lowest levels in a decade. However, the improving economic outlook, especially in the U.S. and China, is likely to result in a rise in exploration & production (E&P) spending from oil and gas companies. This augurs well for oil and gas equipment & services companies such as Precision Drilling Corp. (NYSE: PDS), and Helix Energy Solutions Group Inc. (NYSE: HLX).
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After a tough 2012, oil and gas equipment & services companies are likely to benefit from an expected rise in E&P spending. Recently, Schlumberger CEO Paal Kibsgaard said that international E&P spending is expected to increase 10% in 2013. Kibsgaard sees strong activity outlook for the U.S. Gulf of Mexico.
The global economic outlook has improved significantly from last year, following encouraging data from the world’s two biggest oil consumers, U.S. and China. The Eurozone remains a worry, though. On Thursday, data showed that the region’s economy contracted more than forecast in the fourth quarter of 2012. However, the Eurozone economy is expected to improve in the second half of the year as concerns over the region’s debt crisis continue to ease. As a result, oil demand could rise this year, which should boost capital spending from oil and gas companies.
On Thursday, Canada-based Precision Drilling reported its quarterly results for the fourth quarter and full year 2012. In the fourth quarter, Precision’s revenue and adjusted EBITDA rose on a sequential basis due to higher day rates and margins in the U.S. and Canada, coupled with increased activity levels in Canada. Revenue for the fourth quarter of 2012 was $534 million, while adjusted EBITDA for the quarter was $177 million. Our free research report onPrecision Drilling Corp.can be downloaded upon registration at
Kevin Neveu, President and CEO of Precision Drilling, said that while 2012 finished with softening demand for the company’s services in its Canadian and U.S. markets, he is pleased that the company continues to see excellent opportunities to deploy its High Performance, High Value rigs internationally, expanding its breadth in the Arabian Gulf and with integrated service providers in Mexico.
Neveu added that like most, the company remains cautious on its outlook for near-term energy services growth in North America, but remains a firm believer in the long-term opportunity for drilling and development of unconventional hydrocarbon resources.
Precision, citing industry sources, noted that so far this year, the U.S. active land drilling count was down approximately 13% from the same point in the prior year. The company noted that although it has seen year-over-year decline in rig utilization, continued demand for Tier 1 assets has supported day rates charged to customers in Canada and the U.S.
Investors are now waiting for Helix Energy’s financial results for the fourth quarter, which will be released on Thursday, February 21, 2013.Helix Energy Solutions Group Inc.free research is available today at
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