Debt Reduction Precision Drilling repays $205-million in debt in 2019 2020-01-07 07:17 ET - News Release Mr. Carey Ford reports PRECISION DRILLING ANNOUNCES UPDATES ON DEBT REPAYMENT, SHARE REPURCHASES, LIQUIDITY AND 2020 CAPITAL EXPENDITURE PLAN Precision Drilling Corp. has provided information on the following: 1) year-end and 2020 debt repayment updates and progress on long-term debt reduction targets; 2) year-end progress on share repurchases; 3) year-end cash balance and extension of revolving credit facility; and 4) revised 2020 capital expenditure plan. Debt Repayment Update Following additional open market repurchases and redemptions of its senior notes in the fourth quarter, Precision's 2019 debt repayments totaled $205 million, exceeding its recently increased 2019 annual target of $200 million. To date in 2020, Precision has redeemed $32 million of its 2021 senior notes and reaffirms its 2020 targeted debt reduction range of $100 million to $150 million, which includes the remaining balance of the 2021 senior notes. Precision has paid down $412 million in debt since the beginning of 2018, exceeding the low end of the 4-year debt reduction target range of $400 million to $600 million, in just over two years. The Company plans to continue reducing debt levels to reach its targeted leverage ratio of below two-times net debt to Adjusted EBITDA. As of January 7, 2020, the amounts outstanding under Precision's senior notes are as follows: US$66 million {&#A A ; –} 6.5% senior notes due December 15, 2021 US$345 million {&#A A ; –} 7.75% senior notes due December 15, 2023 US$308 million {&#A A ; –} 5.25% senior notes due November 15, 2024 US$370 million {&#A A ; –} 7.125% senior notes due January 15, 2026 Share Repurchases Update As of 2019 year-end, Precision has repurchased and cancelled 16.5 million shares for $26 million. These repurchases were funded from cash flow and account for 5.7% of the Company's available public float. Precision is currently approved to buy back up to 29.2 million shares, representing 10% of its public float, by August 26, 2020. Liquidity Update Precision anticipates a reported 2019 year-end cash balance of approximately $75 million and in the fourth quarter completed a one-year extension of its US$500 million revolving credit facility, now maturing November 2023. Excluding letters of credit, the Company's revolving credit facility remains undrawn, and with the year-end cash balance, Precision has access to over $700 million in liquidity. Capital Expenditure Plan Update Due to a change in Precision's estimate of rig componentization, certain costs that were previously classified as operating expenses will now be classified as maintenance capital. For 2020, this change is expected to decrease operating expenses and increase maintenance capital by an estimated $25 million with no impact on cash flow. As a result, Precision's previously communicated 2020 capital expenditure plan of $60 million to $80 million is now expected to be $85 million to $105 million. Regarding the above announcements, Precision's CFO, Carey Ford stated: "Precision's proven ability to generate free cash flow has allowed the Company to accelerate both its short and long-term debt reduction targets. Since 2018, we have reduced our debt by $412 million and used $26 million to repurchase our shares, totaling $438 million used to strengthen our balance sheet and return capital to shareholders. Precision remains well positioned to continue reducing debt, while maintaining financial flexibility to manage customer spending cycles, address the most attractive growth opportunities and opportunistically repurchase our shares. We are firm in our belief that these efforts are the most productive means to create shareholder value in the current market environment."