Precision Drilling Trust Q2 2010 Earnings Call Transcript
Current market conditions have Precision’s Canadian rig count at 77 working this morning with 20 rigs waiting to move to location once the ground dries. A year ago at this time, Precision was working 51 rigs in Canada. Oil drilling is leading the way in areas like the Cardium where Precision has 11 rigs running and the Viking where we have nine rigs running.
Today, we have 91 rigs working in the U.S. two in Mexico and one rig that is contracted but stacked that we are still receiving margin payments on. This last stacked contracted rig is expected to return to work in the next few weeks.
A year ago, in the U.S. we were working 52 rigs. So you can see the improvements in utilization that Precision has achieved. Kevin will detail some of the major resource plays that led to these improvements.
Now, I’m going t turn it over to Doug for his comments.Doug StrongThanks David. Precision’s financial position continued to strengthen in the second quarter of 2010 as the recovering customer demand experienced in Q1 carried through the second quarter, strengthened oil fundamentals, improved the capital markets and Precisions debt reduction focus over the past year led to favorable opportunities to enhance liquidity, reduced debt servicing cost and secured new rig build and upgrade opportunities with customers. These developments enhance future cash flow visibility and reinforced Precision’s brand promise to provide high performance, high valued customer service. Specifically Precisions pleased to highlight the following developments consistent with our team to seize market opportunities.First, we were able to amend our existing secured debt facility to lower current interest rate spreads on term loan B, on the term loan B by almost 3%. This was accomplished through 1.5% reduction in the LIBOR floor to 1.75% and a 1.45 reduction in the weighted average LIBOR margin to 5%.
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