Precision Drilling Corporation (NYSE:PDS) Q4 2022 Earnings Call Transcript

Carey Ford : I don’t know if I can give you a percentage. It’s a lot smaller dollar items. It’s AlphaAutomation systems. It’s EverGreen products. It could be walk-in systems and mud pumps and those types of things. Some are committed, some are expected. So they’re probably — over half of it would be committed.

Operator: Our next question comes from Kurt Hallead with the Benchmark Company.

Kurt Hallead : So Kevin, I’m kind of curious, looks like you got 19 rigs on contract as of — through September 14 as of December. So I guess, simple math would suggest you’ve got about 40 rigs in the U.S. market that could reprice during the second half of the year? Is that about ballpark?

Kevin Neveu : Yes, it sounds about right. You’re not a little bit faster than I am right now, but that sounds reasonable.

Kurt Hallead : Okay. And the — so Carey, you mentioned that the kind of incremental cash margin in the U.S. has increased by about $2,000 per day. So it seems like that could be a pretty good cadence for the rest of the year? Would that be kind of a good assumption on our part?

Carey Ford : I think per day, flat to slightly growing rig count then that’s a little bit more fuel to the fire for pushing day rates and margins.

Kurt Hallead : Right. I think what we’ve been hearing so far is got leading-edge rates are, I don’t know, 35,000 to 40,000 a day, sort of kind of average rates in the fourth quarter were around 32. So that leaves a lot of headroom for this repricing without even rate count going higher. Is that fair?

Kevin Neveu : Yes, we would agree.

Carey Ford : Yes, and that’s reflected in our Q1 guidance.

Kurt Hallead : Yes. Got you. All right. And then second question. So Kevin, you mentioned a pretty decent rig count for kind of second quarter seasonality what kind of visibility do you have on third quarter activity in Canada?

Kevin Neveu : It looks pretty good. And just that I know it, Canada’s been quite sensitive to a lot of macro issues. But certainly, our AC triple count will get back to that 30 range of 30 rigs, go down during Q2 but back up in Q3 for sure. And the activity we tend to have lined up has us in that mid- to upper 60s range very early in July. And it depends on how quickly our customers keep on whether it moves back into the 70s or not in Q3, we’ll have to see how that goes.

Operator: I’m not showing any further questions at this time. I’d like to turn the call back over to Lavonne for any closing remarks.

Lavonne Zdunich: Thank you, operator, and thank you for everyone who participated on today’s call. If you have any further questions, you can reach out to the Investor Relations team. Thank you, and have a good day.

Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.