Canada’s oil drillers boosting capital spending as industry activity improves
Canada’s drillers boosting capital spending as industry activity improves
August 9, 2017
Ensign Energy Services has joined other Canadian oilfield services companies announcing higher capital spending programs as North American activity levels improve.
Ensign cited “cautious optimism” about commodity prices and stronger demand for oilfield services this week, boosting its 2017 capital budget to the $90-to-$95 million range from $61 million.
The increase will fund construction of one new 1500-series, ADR (automated drilling rig) for the United States, one new series-1,000 ADR for Canada, the purchase of a “new heavy-Permian type” service rig and enhancements to the company’s super-spec fleet.
Both the new ADR 1500 rig and the new ADR 1000 are expected to go to work in the third quarter.
The drilling contractor said that the process of converting its drilling fleet to high-specification, high-quality ADR drilling rigs is delivering greater market share in all areas of its business.
Ensign’s revenue was 32 per cent higher in the second quarter than last year’s figure and 11 per cent higher in the year to date. It also narrowed its net loss in the quarter to $33.81 million.
Similarly strong second quarter results prompted both Precision Drilling and pressure-pumping company Calfrac to boost their capital spending programs.
Precision Drilling has increased capital spending to $138 million for this year, up from $119 million planned previously, based on stronger North American activity levels and higher day rates in its international drilling division.
Precision’s total revenue in the second quarter jumped 68 per cent to $276 million from $164 million a year ago.
“Demand for our Pad Walking Super Triple rigs remains strong in all of our North American markets,” said Kevin Neveu, Precision’s chief executive, in a statement.
Precision also reported a 120 per cent jump in its Q2 drilling rig utilization days in Canada. In the United States, the increase was 143 per cent.
Calfrac also responded to the ramp up in industry activity recently by boosting its capital budget to $65 million from $45 million.
In the second quarter, Calfrac’s revenue more than doubled to $325.34 million from $150.61 million in last year’s period.
Calfrac also narrowed its net loss in the quarter to $20.35 million as it rode the wave of stronger activity in Canada and the United States, management said.