UPDATE 2-Precision Drilling expects busy winter season

* Q3 EPS C$0.21 vs C$0.25 in year-before quarter

* Profit tops forecasts

* Sees demand rising

* Shares rise 2.4 pct
(Adds details)

By Scott Haggett

CALGARY. Alberta, Oct 21 (BestGrowthStock) – Precision Drilling
Corp (PD.TO: ), Canada’s largest oil- and gas-well drilling
company, said on Thursday robust oil prices and new shale-gas
discoveries will lead to a busy winter drilling season and high
demand for its rigs.

It made the forecast as it posted an 18 percent rise in
quarterly operating earnings.

The company, which supplied a drilling rig to the effort
that rescued 33 trapped Chilean miners last week, said it
expects strong oil-company demand for rigs will support higher
rental rates for its units in both Canada and the United
States. It slashed rates when drilling collapsed during the
financial crisis.

“All indications are for a strong rig demand driven by oil
activity,” Kevin Neveu, Precision’s chief executive, said on a
conference call. “We expect peak activity in the first quarter
likely will exceed 2010’s first quarter and this year we have
not been caught out with depressed pricing.”

Drilling activity in Canada and the United States has risen
from recessionary lows as petroleum companies look to tap
unconventional natural gas deposits such as shale fields, while
oil prices are relatively strong.

Neveu said demand for the company’s rigs was strongest in
the Bakken oil field, which lies under Montana, North Dakota
and Saskatchewan, while demand for rigs from companies tapping
shale-gas deposits in Texas and Pennsylvania was also strong.

NET INCOME DROPS

Precision said third-quarter net earnings fell 15 percent
to C$61.1 million, ($59.84 million), or 21 Canadian cents a
share, from C$71.7 million, or 25 Canadian cents, in the third
quarter of 2009. The 2009 quarter was bolstered by a C$63
million foreign exchange gain.

The most recent quarter included a C$18 million gain.

The company was expected to post a profit of 9 Canadian
cents per share, according to the average of analysts’
estimates compiled by Thomson Reuters I/B/E/S.

Excluding the C$18 million gain and based on 284.3 million
shares outstanding, Precision’s earning per share were 15
Canadian cents, beating the 9 Canadian cent expectation.

“Partially driving the beat was lower than expected income
taxes,” Chad Friess, an analyst at UBS, said in a note to
clients.

Operating earnings were C$65 million, compared with C$55
million in the year-before quarter.

Precision, which converted its business from a trust to a
corporation earlier this year, said revenue rose 42 percent to
C$359.15 million from C$253.3 million a year earlier.

Precision Drilling expects to have an average of about 96
rigs committed under term contracts in North America in the
fourth quarter.

Precision shares rose 18 Canadian cents to C$7.70 on the
Toronto Stock Exchange on Thursday.

($1=$1.03 Canadian)
(Additional reporting by Aftab Ahmed in Bangalore; editing by
Peter Galloway)

UPDATE 2-Precision Drilling expects busy winter season