CALGARY – Precision Drilling Corp. (TSX:PD) is writing down the value of its assets and planning for a much smaller capital spending budget next year, the company said Thursday as it reported a 38 per cent decline in third-quarter revenue.
The Calgary based company reported an $87 million net loss, or 30 cents per share, for the three months ended Sept. 30, as revenue dropped to $364 million from $584.5 million in last year’s third quarter when the oil and gas industry was booming.
Precision Drilling said it has taken $74 million million of asset writedowns, cutting 25 cents per share from its net earnings, and that it will reduce capital spending substantially in 2016.
It has cut its 2015 capital spending plan to $531 million, down $15 million from the previous estimate in July, and is projecting only $180 million in capital spending for 2016.
This year’s third-quarter loss contrasted with a net profit of $52.8 million or 18 cents per share in the third quarter of 2014, which was prior to a collapse in oil and gas prices that began in late November.
Precision Drilling says this year’s third quarter recorded a $73-million pre-tax write down of the value of property, plant and equipment of its Canadian well service assets, and $24 million of other writedowns before taxes.