Please see our press release for additional disclosure on these non-GAAP measures. Our comments today will also include statements reflecting Precision’s views about events and their potential impact on the corporation’s business, operations, structure and financial results which are forward-looking statements.There are risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking information and statements. Please see our press release and other regulatory filings for more information on forward-looking statements and these risk factors. After I give a brief review of the second quarter operating results, Doug Strong will review the changes to Precision’s debt during the quarter and summarize our capital expenditure plans for 2010 as he transitions out of his role as CFO. Kevin Neveu will then provide an operations update on our outlook and after that, we will open up the call for questions. On June 1, 2010, as a result of a plan of arrangement approved by the holders of trust units of Precision Drilling Trust on May 11, the trust converted into Precision Drilling Corporation. More information is available in our press release and in our website at precisiondrilling.com under the investor center tab about this conversion. Precision reported the net loss of CAD67 million or CAD0.24 per share for the second quarter. These results include a CAD26 million foreign exchange loss related to our debt being U.S. dollar denominated. Also, with the financing amendment that Doug will detail in a minute, Precision had non-cash charges of CAD24 million during the quarter related to this amendment. For more on the quarter, please see the details in our press release. Also, during the quarter, Precision strengthened its term contract position. We now expect to average 78 rigs on term in 2010, up from 75 average rigs when we reported last quarter. For 2011, Precision increased four average rig years to 45, from 41 at our last report. Two of these are related to the new bill contracts and others are for the rigs that had been upgraded for the US Bakken.
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 Strong Thanks 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%.
This in combination with the $74 million repayment associated with non-consenting debt holders lowers annual debt service cost by over CAD15 million. Second, we were able to increase liquidity by $150 million by adding borrowing capacity in our secured facility revolver.Read the rest of this transcript for free on seekingalpha.com