In a recent operations update, Precision Drilling announced that it is continuing to experience increased demand for its drilling services, Alpha technologies and EverGreen solutions into 2022.
In Q4 2021, Precision had an average 52 rigs active in Canada, 45 in the US and 6 in the rest of the world. As of 6 January, the company has 66 rigs active in Canada and 50 in the US, representing increases of 38% and 61%, respectively, from the same date in 2021. Precision expects average drilling activity in Canada to be up approximately 40% compared with 2021, while average US activity is expected to increase 60% year-over-year.
Precision exited 2021 with 47 AC Super Triple Alpha rigs equipped with its AlphaAutomation platform. These 47 rigs marked a 26% increase from the beginning of 2021. The company’s paid AlphaApp days in Q4 2021 increased 50% compared to Q3 2021 440% compared to Q4 2020. Precision added four new Alpha customers in Q4 2021.
Precision’s EverGreen suite of environmental solutions expects three battery energy storage system deployments in Q1 2022, with several additional pending commitments by mid-year. In addition, the company expects to have eight integrated power and emissions monitoring systems deployed by the end of Q1 2022.
The company also provided an update on its debt repayment. Precision reduced total debt by $115 million in 2021, exceeding the midpoint of its annual debt reduction goal of $100-125 million. Since the beginning of 2018, Precision has paid down approximately $665 million of debt.
“We expect to continue to generate strong free cash flow over the next several years by maximizing our operating leverage in an increasing activity environment, bolstered by Precision’s global scale, high-quality, digitally-enabled Super Series fleet and lean fixed cost structure,” said Precision CFO Carey Ford. “In addition to continued debt reduction progress and disciplined high-return investments in our rig fleet, we believe Precision’s existing debt structure and reduced interest expense position the company to increase shareholder value through allocating a higher percentage of free cash flow to the return of capital to shareholders.”