Precision Drilling Corporation PDS – the largest drilling contractor of Canada − declared the closure of its $400 million notes offering. The notes, expected to mature in 2024, were issued to a small number of select investors and carried an interest of 5.250%. The company previously declared that the offering's net proceeds will be utilized for normal corporate activities and manufacturing new rigs.
Calgary, Canada-based Precision Drilling primarily provides drilling services to its customers by its technologically advanced and versatile drilling fleet. The company also offers coil tubing services. During the first quarter 2014, the company reported earnings per share of 32 cents, which failed to beat the Zacks Consensus Estimate. Significant hike in operating expenses hampered the results.
Last week, Precision Drilling entered into a deal with one of its Middle East customers. Per the contract, Precision Drilling is expected to deploy a new-build rig of 1,500 horsepower capacity by mid 2015. Excluding this contract, Precision Drilling sent eight rigs altogether in the Middle East since mid 2012.
Precision Drilling currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the oil and gas drilling sector like Pioneer Energy Services Corporation PES, Parker Drilling Co. PKD and Patterson-UTI Energy Inc. PTEN. Pioneer Energy Services sports a Zacks Rank #1 (Strong Buy), while Parker Drilling and Patterson-UTI Energy carry a Zacks Rank #2 (Buy).
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