UPDATE 2-Precision Drilling posts Q2 loss on forex, charges

* Q2 loss C$0.24 vs yr-ago EPS C$0.22

* Revenue up 25 pct

* Says 2010 activity to exceed 2009 levels
(Adds details)

July 22 (BestGrowthStock) – Precision Drilling Corp (PD.TO: ),
Canada’s biggest oil and gas well drilling firm, reported a
quarterly loss, hurt by charges and foreign exchange losses,
but said activity levels for the rest of 2010 will exceed those
in 2009.

The demand for energy is rising as the global economies are
starting to improve and move out of the bottom of the
recession, the company said.

Customers are increasing drilling programs due to more
liquidity in the capital markets and higher oil commodity
prices, it added.

Drilling in Canada so far this year is outpacing the
drilling activity of 2009, while in the United States,
utilization has improved, the company said.

For 2010, Precision expects to have an average of about 78
rigs under term contract, with 41 rigs contracted in the United
States, 36 in Canada and one in Mexico.

It sees 2010 capital expenditures of about C$189 million.

Precision, which converted back to a corporate format last
month in advance of a Canadian government deadline ending the
tax-advantaged trust structure next year, said it expects to
have an average of 24 rigs in Canada under term contract in
2011.

For the second quarter ended June 30, the company posted a
net loss of C$66.5 million ($63.9 million), or 24 Canadian
cents a share, compared with net income of C$57.5 million, or
22 Canadian cents a share, a year ago.

The latest quarter results included a foreign exchange loss
of C$26 million and finance charges of C$52 million, the
company said.
Precision was expected to post a profit of 3 Canadian cents
per share, the average of analysts’ forecasts compiled by
Thomson Reuters I/B/E/S.

In the second quarter, increased drilling activity led to a
25 percent rise in revenue to C$261.8 million.

Precision, whose average active rig count in the second
quarter was up 14 percent sequentially, said spot market
dayrates on its Tier I and Tier II rigs have been improving
sequentially.

The company has been coping with weak demand for drilling
services as natural gas prices remain low and new technology
that uses one well, rather than several, to produce gas from a
large area.

Precision shares closed at C$7.80 on Wednesday on the
Toronto Stock Exchange and have climbed 43 percent over the
past 12 months.

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($1=1.048 Canadian Dollar)
(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by
Anne Pallivathuckal)

UPDATE 2-Precision Drilling posts Q2 loss on forex, charges