Precision Drilling Corp T.PD

Alternate Symbol(s): PDS

Energy Oil & Gas Drilling

Precision Drilling Inc is a Canada-based drilling company. The Company is engaged in the exploration and production of oil and natural gas. Its services include North American drilling, international drilling, oilfield equipment rentals, camp & catering services. The Company technology includes AlphaAutomation, AlphaApps, AlphaAnalytics and EverGreen.

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Precision Drilling Corp

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Post by retiredcfon Jul 08, 2024 8:59am

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Post# 36122446

RBC

July 8, 2024

Precision Drilling Corporation
On track to hit debt reduction and shareholder return targets

TSX: PD | CAD 93.99 | Outperform | Price Target CAD 122.00

Sentiment: Neutral

Our view: PD’s financial update shows it is on track to meet its 2024 debt reduction targets. YTD, the company has reduced debt by $103MM ($150-200MM target in 2024) and returned $34MM to shareholders through share repurchases. Given the update is in line with prior guidance and our expectations, we expect a neutral reaction to PD shares in today’s trading.

Key points:

• Extends senior credit facility to 2027. PD extended its senior credit facility maturity date to June 28, 2027, and revised its size to US$375MM (prior US$447MM) which includes an accordion feature to increase the facility size to US$750MM. We are not concerned about the reduced credit facility and availability given the company’s focus on debt repayment over the coming years.

• On track to meet 2024 debt repayment targets. PD announced that YTD it has reduced its debt by $103MM against its 2024 debt reduction target of $150-200MM. PD highlighted that during 2Q24 the company repurchased $24MM of shares through its NCIB, and $34MM in 1H24. PD continues to plan to return 25-35% of its FCF to shareholders this year.

• Maintains long-term debt reduction targets. PD continues to plan to repay $600MM debt from 2022-2026 and reach a net debt/EBITDA ratio of 1.0x by the end of 2025.